THOMAS J. DAVIDSON, Plff. in Err.,

v.

W. L. LANIER, Curator of Jno. J. McMahon, Deceased.

(See S. C. 4 Wall. 447-458.)

Writ of error need not be allowed by a judge error in date of citation-second writ of error and citation not served does not prejudice first judge need not approve appeal bond in writing-writ of error not a nullity for want of sufficient security-contract to promote illegal banking, void-right of holder of bill of exchange signed and indorsed in blank to fill blanks-limit to his authority-author: ity of drawee to fill such bill-enforcement by holder with knowledge.

It is not necessary that a writ of error be allowed by any judge; it is enough that it was issued and served by a copy lodged with the clerk of the court to which it was directed.

Where the citation was dated before the date of the judgment, but it is clear that it was issued after its rendition, the date is a mere clerical error. The fact that another writ of error and another citation, not served, were issued, cannot prejudice the writ and citation which were duly tssted and served.

The judiciary act does not, in terms, require that the judge shall put his approval of the appeal bond in writing, nor can a writ of error be treated as a nullity, because sufficient security is not given. A contract, in consideration of aid in promoting the objects and effecting the purposes of an illegal banking company, is invalid.

The holder of a bill of exchange, signed and indorsed in blank, has not unlimited authority to fill it up at pleasure, and bind the signer and indorser by his act.

The delivery of a bill of exchange signed and indorsed in blank, only authorizes the receiver, as between himself and the drawer and indorser, to fill it up in conformity with the authority given him. If there has been no agreement, the authority is general; if there has, it must be pursued.

The burden of proof that there was an agreement, and that its terms have been violated, is, in such a case, upon the defendant; but if he can make the proof, it will avail him.

No person, unless authorized, either directly or by just inference from the nature of the transaction, can fill up a blank bill for his own benefit.

Nor can such a bill be enforced against the drawer and indorser in favor of anyone who takes it in bad faith; that is, with knowledge that it has been filled up without authority or in fraud.

Subject to the limitations just stated, the delivery of a signature in blank is, in general, an authority to the holder to fill it up as he thinks proper.

A drawee has no right to fill up a blank bill and hold the drawers and indorsers, without any other authority than such as is implied in the fact that the bill was sent to him by the last indorser, with the consent of the other indorser and of the draw

ers.

This fact implies no such authority. The only inference to be drawn from the circumstance that a bill was sent to the drawee in blank, is that it was sent to him for acceptance.

[No. 51.]

Submitted Dec. 11, 1866. Decided Jan. 14, 1867.

NOTE.-Negotiable paper executed in blank. Blanks filled in negotiable paper. Rights of bona fide holders-see note to Bank of Pittsburgh V. Neal, 16 L. ed. U. S. 323, and note, 35 L. R. A. 467.

States for the Northern District of Missis

sippi.

The case is stated by the court.

Mr. Reuben Davis for plaintiff in error. Mr. R. J. Brent, for defendant in error: I. On motion to dismiss.

The grounds for the dismissal of this case,

are:

1st. Because the writ of error is not "allowed" by the judge.

Yeaton v. Lenox, 7 Pet. 221.

2d. Because the citation certified as part of the record, and dated June 7, 1860, was never served, and is therefore to be taken as no citation.

Lloyd v. Alexander, 1 Cranch, 365.

Nor can a copy of the citation be regarded.
Wilson v. Daniel, 3 Dall. 401.

3. The citation returned here as the original, which was served Sept. 14, 1860, is on its face tested April 16, 1860, nearly two months prior to the judgment which it claims to bring up.

This citation, when served, notified the defendant in error to appear and answer a writ of error filed at its date, April 16, 1860. No such writ of error had then been filed, in this case, nor indeed had the judgment been rendered.

On April 16, 1860, when this citation bears date, there was a judgment in the same court, dated Dec. 5, 1859, being the judgment in another case (next case, No. 52), and it is properly described in this citation. The defendant in error, when served with this citation, would naturally suppose from its date that it was intended to relate to the only judgment then existing.

This court has not the power to amend any proceeding on which its jurisdiction depends, even if it be a clerical misprision manifestly. Hodge v. Williams, 22 How. 88, 89, 16 L. ed. 237.

4. The appeal bond returned in this case was designed to be a supersedeas, from the amount of its penalty.

See 22d of judiciary act.

But here it does not appear that the judge approved the bond, or exercised any judgment touching the security.

In the case of a supersedeas appeal bond, where it does not appear to have been taken or approved by the judge, the writ of error must be dismissed.

Boyce v. Grundy, 6 Pet. 777.

II. On the merits,-if the motion to dismiss does not prevail.

The suit below was for money paid, etc., and the evidence shows that the defendant in error paid large amounts in taking up bills of exchange drawn on him by the plaintiff in error, and his associates.

The whole defense rested on the statute of Tennessee.

The place of performance of McMahon's contract was Louisiana, and its validity is to be tested by the laws of Louisiana, and not of Tennessee.

Story, Confl. of L. § 239; Bell v. Bruen, 1 How. 169; Fox v. United States, 6 Pet. 172.

The contract to pay for money advanced upon personal security is valid, although the occasion for this contract arose out of the illegal act.

Armstrong v. Toler, 11 Wheat. 258; McBlair ▼. Gibbes, 17 How. 232, 16 L. ed. 132. Especially see the cases of Catts v. Phalen, 2 How. 376; Groves v. Slaughter, 15 Pet. 449.

Mr. Chief Justice Chase delivered the opinion of the court:

A statute of Tennessee, enacted in 1827, and entitled, "An act to Suppress Private Banking," made it penal to erect, establish, institute, or put in operation, or to issue any bills or notes for the purpose of erecting, establishing, or putting in operation any banking institution, association, or concern.

In January, 1856, this act being in force, several persons, of whom one Richard M. Kirby seems to have been the principal, undertook to establish a banking association or company in Memphis, under a cover of a charter granted by the state of Arkansas, for a corpo ration styled "The Cincinnati & Little Rock Slate Company." Their object was to issue bills for circulation as money, and use them in the cotton trade.

About the time of the organization of the company, Kirby visited McMahon, of whose estate the defendant in error is surety, at New Orleans, and exhibited the charter and explained the views of the company; whereupon McMahon agreed to act as its treasurer and financial agent.

In pursuance of this arrangement, circulating 449*] notes of the company to the amount of $12,000 were sent to McMahon, who used them, as far as he could, for currency. He also made advances to the company by accepting and paying bills drawn on him, and the result be came its creditor in a sum some what exceeding $11,000.

At the time of the arrangement with McMahon, Davidson, the plaintiff in error, and one J. B. Ellis, were members of the company, but afterwards withdrew. Subsequently, however, upon the request of Kirby, Davidson, with two others, consented to sign, and Ellis consented to indorse, several bills of exchange in blank, and among them, that on which the suit below was brought. All the bills seemed to have been addressed to McMahon as drawee.

In

All the bills, when they went into McMahon's hands, seemed to have engraved on their face, the formal parts of a bill of exchange, with the name of the place and date, "Memphis, Tenn.,” and the direction to the drawee, "John J. McMahon, New Orleans," and all but one seemed to have *borne the words, "exchange for [*450 $1,000" in the upper right hand corner. other respects, as to time and date, amount to be paid, and time of payment, they were left blank. The one now in controversy was filled up with the date, "July 15, 1856," with the time of payment, "eight months after date," with the sum to be paid, "$8,992.44." and with a stipulation for "eight per cent interest, from maturity until paid." Thus filled up, the bill sued on reads as follows:

"Exchange for $8,992.44.

"Memphis, Tenn., July 15th, 1856. "Eight months after date of this, our first of exchange (second unpaid) pay to the order of J. B. Ellis eight thousand nine hundred and ninety-two dollars and forty-four cents, value received, and charge the same to account of your obedient servants, with eight per cent interest, from maturity until paid.

"Jas. R. Ferguson, "J. Locke,

"Thomas J. Davidson. "To John J. McMahon, New Orleans. "Indorsed: J. B. Ellis, Ripley Miss., and Richard M. Kirby."

Upon the trial, the court charged the jury that if McMahon's object in advancing his money was to enable the company to put into operation a banking company in violation of the laws of Tennessee, the jury must find for the defendant; and also that if McMahon agreed with Kirby to redeem the circulation, intending thereby to enable the company to go into operation, and the company did go into operation, issuing bank notes in pursuance of that agreement, then the transaction was illegal, and the plaintiff could not recover.

But the following instructions, numbered in the records, 5th, 6th, and 7th were also given by the court:

There is some obscurity, and perhaps some contradiction of evidence, in the record as to the time and purpose of signing and indorsing the blank bills of exchange. Kirby states that they were signed and indorsed before the absconding of True, to enable himself to protect the circulation of the company. Another witness says that they were signed and indorsed after that event, at the suggestion of Kirby, to relieve McMahon from the consequences of True's theft; but this witness says, also, that he only knows the object of the bills from a statement by Kirby, made when the other parties were not present, and is not confident as to the time of signing and indorsement.

However these things may have been, it is certain that the bills were sent by Kirby to McMahon in July, 1856, and were filled up some months later, after vain attempts to obtain payment of the balance due him.

378

ing company contrary to the laws of Tennessee, and if the banking company was then in operation, then the consideration of the bills [*451 is not affected by the use made of the proceeds of the bill, and the plaintiff is entitled to recover, unless the defense is sustained on some other ground."

6. "The signing of a bill of exchange in blank, is the giving of the holder an unlimited authority to fill it up at pleasure, and the party so drawing or indorsing, is bound by the act of the party filling up the same."

7. "If the bill sued on was signed in blank and delivered to Kirby to be sent in blank to McMahon, that would authorize him, McMahon, to fill up the bills and insert any rate of interest that was lawful, and the jury should find for the plaintiff, unless the defense is made out and sustained on some other ground."

It is upon these instructions, considered in connection with the evidence, that the questions to be decided in this case arise.

Before proceeding to consider them, a mo71 U. S.

The judgment of the district court for $11,312.42 was rendered on the 6th of June, 1860; on the 7th, a writ of error was sued out and a copy was lodged with the clerk of the court on the same day, and bond for supersedeas given in double the amount of the judgment. A citation was also issued, dated 16th April, which was served on the 14th September, 1860, and the record, with the writ of error and the citation, was returned to the next term of this court. Another citation, and apparently another writ of error, were issued on the 7th of June. Of the last-mentioned writ and citation, there seems to have been no service.

It is objected to the writ of error that it was not allowed by any judge; but this is not required. It is enough that it was issued and served by copy lodged with the clerk of the court to which it was directed.

It is objected to the citation that it was dated 16th April, which was before the date of the judgment; but it is clear, from the number which it bears, taken in connection with the judgment it describes, that it was issued after the rendition on the 6th of June. The date must have been a mere clerical error, and the service on the 14th of September was regular and sufficient.

The fact that another writ of error, and another citation, not served, were issued, cannot prejudice the writ and citation which were duly issued and served.

It is also urged that the appeal bond was not approved by the judge. But it is a fair infer454*] ence, from the acts of the *judge, in signing the citation, and in witnessing the appeal bond, that he approved of the security. The Judiciary act does not, in terms, require that the judge shall put his approval of the bond in writing, nor can a writ of error be treated as a nullity because sufficient security is not given. This court will take care, on application, that the rights of the defendant in error be not prejudiced by the omission, but will not dismiss the writ except on failure to comply with such terms as it may impose. Martin v. Hunter's Lessee, 1 Wheat. 361; Catlett v. Brodie, 9 Wheat. 553.

The motion to dismiss in this case must be denied.

The first question upon the merits arises upon the 4th and 5th instructions. The court had already charged in substance that a contract in consideration of aid to be given in putting in operation an illegal banking company in Tennessee was void. From the fifth instruction, taken in connection with those which preceded, and with the evidence, the jury must have understood that in the judgment of the court a contract in consideration of aid in promoting the objects and effecting the purposes of an illegal banking company, when once in operation, was valid.

We think this construction of the statute of Tennessee too narrow. The intention of the act was declared by its title. It was an act to suppress private banking. Its object was the protection of the people against the evils of an unauthorized currency-than which hardly any object of legislation is more important. The currency measures all values, and is the

In the construction of this act it was the duty of the court below, as it is ours here, to give effect to its obvious intention, if that can be done without disregarding settled rules of interpretation.

What, then, is the true sense of the prohibition to erect, establish, institute, or put in operation any banking company, or to [*455 issue any bills or notes with intent or purpose to do so? What is meant by putting in operation or establishing a banking company? We think that this language has a much wider import than mere commencement of business. To establish a company for any business means complete and permanent provision for carrying on that business, and putting a company in operation may well include its continued as well as its first or original operation.

This construction is supported by the prohibition to issue bills or notes. Taking the act of establishment and putting in operation, in the restricted sense of the instructions, the issue of circulation could not precede but must follow those acts. The prohibition of such issues, therefore, must be taken as proof that the legislature did not use the words in that sense.

The emission and circulation of unauthorized notes and bills as money was the main object and business of the company, and it was precisely this object and business which the legislature intended to defeat and prohibit.

We must construe the act, therefore, as covering with its penal prohibition the whole range of devices by which illegitimate currency is imposed on the community. It prohibits the use of such currency during the whole period of the establishment of an illegal company, and applied as completely to the last as to the first step of its operations. Any other construction would frustrate the legislative intent and leave the great mischief, which the statute was made to prevent, wholly without restraint or check.

It was quite clear, upon the evidence, that McMahon entered into the transaction, which resulted in the bill sued on, in the expectation of profit from aiding the operation of the prohibited banking company. He was engaged with its officers and stockholders in the scheme of imposing upon the community a prohibited and fraudulent currency. His name was upon its circulating bills, and his credit promoted their circulation. His curator cannot look to the law for remedies against his associates in this illegal undertaking.

With this view of the statute and of the evidence, we cannot *distinguish this case [*456 from that of Brown v. Tarkington, 3 Wall. 377 [ante, 255], decided at the last term. In that case we held that notes given for a balance found due on a settlement of accounts with an illegal banking company, and for advances to redeem its circulation, could not be enforced in favor of a payee who had been participant in the illegal business. The bill in this case, in our judgment, is of the same character.

It was urged in argument that the contract we have been considering was made in Louisiana, and not invalid by the laws of that state.

further. It asserted the right of a drawee to fill up a blank bill and hold the drawers and indorsers, and this without any other authority than such as is implied in the fact that the bill was sent to him by the last indorser with the consent of the other indorser and of the drawers.

*Now, it is quite clear that this fact [*458 implies no such authority. The only inference to be drawn from the circumstance that the bill

was sent to McMahon in blank is that it was sent to him for acceptance. The structure of the paper excludes any other hypothesis. If, having received the bill in blank, he had accepted it and negotiated it to a third person, without notice of facts impeaching its validity between the antecedent parties, those parties would have been bound to the holder. But he, as drawee, could not transfer the bill to anybody without previous acceptance, and still less could he treat it as an obligation to himself.

We think there was error in these instructions as well as in the fifth.

The judgment of the District Court must, therefore, be reversed, and the cause remanded for new trial in conformity with this opinion.

just inference from the nature of the transaction, can fill up a blank bill for his own benefit; nor can such a bill be enforced against the 457*] drawer *and indorser in favor of anyone who takes it in bad faith; that is, with knowledge that it has been filled up without authority or in fraud. 3 Kent. Com. 119; 10 Sm. & Marsh. 590.

It is highly probable that the court below in

tended that its instructions should be taken

with this limitation; but it was too general in

its terms, and was, we think, calculated to mislead the jury.

The seventh instruction directed the jury in substance to find for the plaintiff, if satisfied that the bill was signed in blank and delivered to Kirby to be sent to McMahon. It asserted that McMahon had the right in the case supposed to fill up the bill with any amount due him and make the drawers and indorsers liable on the bill to himself.

It is doubtless true that, subject to the limitations just stated, the delivery of a signature in blank is in general an authority to the holder to fill it up as he thinks proper. This rule, in its application to negotiable instruments, was very clearly stated by Mr. Justice Clifford in The Bank of Pittsburgh v. Neal, 22 How. 107, 16 L. ed. 328, as follows: "Where a party to a negotiable instrument intrusts it to the custody of another, with blanks not filled up, whether it be for the purpose to accommodate the person to whom it was intrusted, or to be used for his own benefit, such negotiable instrument carries on its face an implied authority to fill up the blanks and perfect the instrument; and as between such party and innocent third parties the person to whom it was so intrusted must be deemed the agent of the party who committed such instrument to his custody or in other words, it is the act of the principal, and he is bound by it."

But the instruction before us went much

THOMAS J. DAVIDSON, Plff. in Err.,

v.

Deceased.

(See S. C. 4 Wall. 458. Note.)

When writ of error not dismissed.

served, bond given, citation issued and served, and the record brought up and filed in this court at the next term, a motion to dismiss will be denied. [No. 52.]

Where the writ of error was duly saed out and

Submitted Dec. 11, 1866. Decided Jan. 14, 1867.

TH

HE case is sufficiently stated by the court. See, also, the preceding case. That and this were submitted together.

Mr. R. J. Brent, for defendant in error, on motion to dismiss:

We object to the writ of error in this case.

1st. Because, assuming that the writ of error and citation issued on the first Monday of December, 1859, when they are tested, then it would appear from the citation returned in the preceding case, No. 51, that the plaintiff in error had subsequently sued out a citation on 16th April, 1860, which the defendant in error could only regard as a waiver of the first citation (both being served on him) in this case. The result of this would be to show that the citation of the 16th April, 1860, filed in the preceding case, is to be regarded as the only citation in this case. If so, it did not accom pany the writ of error, whether you regard the date of the teste (the first Monday of December, 1859), or the day of its being lodged with the clerk (17th May, 1860); and that is a fatal objection.

1 Cranch, 365; Bailiff v. Tipping, 2 Cranch,

406.

Nor is that citation returned with the record. 7 Pet. 221.

The writ of error is not considered as brought, until lodged in the clerk's office on 17th May, 1860.

11 How. 207.

If that is to be considered the bringing the

writ of error, and there is no evidence of the time when the citation, tested December, 1859, was signed, or if the only citation in the case is to be considered the one of 16th April, 1860, then the writ of error and citation did not accompany eath other.

Lloyd v. Alexander, 1 Cranch, 365; Bailiff v. Tipping, 2 Cranch, 406,

2d. The appeal bond is approved on the 11th May, 1860, before the writ of error was lodged, and the judge is presumed to have signed the citation when he approved the bond; that is, before the writ of error was brought.

3d. There is nothing in the record to show when the writ of error or citation in fact is

sued, and whether they accompanied each other; nor to show that when the judge signed the citation, he took the appeal bond, approved

11th May, 1860.

The requirements of the acts of Congress must be strictly observed.

United States v. Curry, 6 How. 112.

The writ of error in both cases must be under seal of the district court, and should be annexed to the transcript, which is not done, but it comes up as a loose, detached paper.

Overton v. Cheek, 22 How. 47, 48, 16 L. ed. 285; Wilson v. Daniel, 3 Dall. 401; 1789, ch. 20, § 22.

We submit the same views on the merits as are stated in our brief in the preceding case, No. 51, which will answer for this case, as the questions and the defense are the same.

Mr. Chief Justice Chase delivered the opinion of the court:

In this case, also, there is a motion to dismiss the writ of error; but, on looking into the record, we find that the writ was duly sued out and served, bond given, citation issued and served, and the record, with a copy of the citation and of the writ of error, brought up and filed in this court at the next term. There is no ground for the motion, and it is denied.

Upon the merits, the case is the same with that just decided. The suit below was upon three bills of exchange, each for $1,000; but otherwise blank as to signatures and indorsements, which were the same as upon the bill in the other case. The bills were sent by Kirby to McMahon, and were by him filled up in precisely the same manner as the other bill.

The charges of the court were substantially the same as in the other case, and the judgment is reversed for the same errors, and the cause remanded for a new trial.

THE MISSISSIPPI & MISSOURI RAILROAD COMPANY, Plff. in Err.,

v.

PATRICK W. ROCK et al. (See S. C. 4 Wall. 177-181.)

of the United States, and a decision by a state court in favor of its validity, must appear on the face of the record before it can be re-examined in this court.

This court cannot, as an appellate tribunal, reverse the decision of a state court, because that court may hoid a contract to be void, which this court might hold to be valid.

It must be the Constitution, or some law of the state, which impairs the obligation of the contract, or which is otherwise in conflict with the Constitution of the United States, and the decision of the state, which impairs the obligation of the contract, of the state, in the matter in which the conflict is supposed to exist, or the case for this court does [No. 186.]

not arise.

As to whether the county officer acted irregularly or illegally in the issuing of the bonds, and as to whether the plaintiff in error had transferred them, were the only issues that could arise under the pleadings. The only question which could arise would be, whether a county officer acted according to the laws of Iowa; and if the state court erred in the construction of a state statute, as to the powers and duties of one of its own officials, this court will not review that decision, and will not assume jurisdiction on the pretense that that decision has impaired the obligation of contracts.

Crowell v. Randell, 10 Pet. 368, 399; Com. Bank v. Buckenham's Ex'rs, 5 How. 317, 343; Lawler v. Walker, 14 How. 153, 154, 155.

The plaintiff in error, in its answer, should have claimed that the Constitution of the state of Iowa was repugnant to the Constitution, treaties, or laws of the United States, or should have claimed some title, right, privilege, or exemption thereunder, before it can claim to be heard here.

Montgomery v. Hernandez, 12 Wheat. 130; Smith v. Hunter, 7 How. 740.

This court will only interfere to prevent an infraction of the Constitution and laws of the United States, when a proper case is made, calling in question the validity of the Constitution and laws of the state, when repugnant to the Constitution and laws of the United States.

The conflict of a state law with the Constitution

NOTE. Jurisdiction of U. 8. Supreme Court where Federal question arises, or where is drawn in question statutes, treaty, or Constitution of U. 8. see note to Matthews v. Zane, 2 L. ed. U. S. 654 note to Martin v. Hunter, 4 L. ed. U. S. 97; and note to Williams v. Norris, 6 L. ed. U. S. 571.

11 How. 529; Mitchell's Ex'r v. Lennox, 14 Pet. 49; McBride v. Hoey, 11 Pet. 167; Jackson v. Lamphire, 3 Pet. 280.

The record for the purpose of showing jurisdiction in the Supreme Court of the United States of a writ of error to a state court-see note, 63 L. R. A. 329.