[506]

O'Brien v. Weld, 92 U. S. 81 (23:675); Sharpe v. Doyle, 102 U. S. 686 (26:277); Factors & T Ins. Co. v. Murphy, 111 U. S. 738 (28:582); Hill v. Harding, 107 U. S. 631 (27:493); Palmer v. Hussey, 119 U. S. 96 (30:362); Winchester v. Heiskell, 119 U. S. 450 (30:462); Jenkins v. Ininternational Bank, 127 U. S. 484 (ante, 189); Mace v. Wells, 48 U. S. 7 How. 272 (12:698); Peck v, Jenness, 48 U. S. 7 How. 612 (12:841); Bush v. Person, 59 U. S. 18 How. 82 (15:273).

[508]

in November, 1878, adjudged a bankrupt. In
December following, Oscar Woodbridge was
appointed his assignee, and a deed of assign
ment was made to him of the property and
effects of the bankrupt.

also in favor of the defendants, Metcalf and
Walker, for their lien on the land. On appeal
to the supreme court of the State a decree was
entered there, in substance, and almost in iden-
tical language, in effect affirming the decree
appealed from. To review this latter decree
the case is brought here on writ of error by
Robert and Maud McKenna. The defendants
in error now move to dismiss the writ on the
ground that this court has no jurisdiction to
review that decree.

In May 1880, the assignee filed a bill in the
Chancery Court of Shelby County, Tennessee,
against the bankrupt and his infant daughter,
Maud McKenna, to set aside, as fraudulent
and void, certain conveyances of about two
hundred acres of land in that county; one exe-
cuted by the bankrupt, Robert McKenna, dated Section 709 of the Revised Statutes points
February 15, 1873, to Solomon Rose, for the out the cases in which the judgment or decree
alleged consideration of $8,000; one executed of the highest court of a State, in which a de-
by Rose on the same day for the like consider- cision could be had, may be reviewed by the
ation to Mrs. John Kirkup, of Kentucky, a Supreme Court of the United States. It pro-
sister of McKenna; and one executed by Mrs. vides for such review in three classes of cases:
Kirkup, August 1, 1876, to Mrs. Anna McKen- first, where is drawn in question the validity of
na, wife of the bankrupt, and her three child-a treaty or statute of, or an authority exercised
ren, for the alleged consideration of $5,000. under, the United States, and the decision is
Of these grantees, Maud McKenna was the only against its validity; second, where is drawn in
one surviving when the bill was filed. Metcalf question the validity of a statute of, or an au-
and Walker were also made defendants be- thority exercised under, any State, on the
cause they claimed a lien upon the premises, ground of its being repugnant to the Constitu-
which had been adjudged in their favor in an- tion, Treaties, or Laws of the United States,
other suit. Woodbridge, the assignee, having and the decision is in favor of its validity;
died, the suit was revived in the name of J. third, where any title, right, privilege, or im-
Lawrence Simpson, who had been appointed munity is claimed under the Constitution, or
assignee in place of the deceased. Afterwards any treaty or statute of, or commission held or
the defendant Robert McKenna filed an answer authority exercised under, the United States,
to the complaint, denying that the conveyances and the decision is against the title, right, privi-
were fraudulent and void, and alleging that lege, or immunity specially set up or claimed
the object of them was to effect a settlement of by either party under such Constitution, Treaty,
the land upon his wife and children, and that Statute, commission, or authority.
his financial condition at the time was such as In neither of the clauses mentioned is there
to render it legal and proper for him to do so, any provision which covers the present case.
as he had no debts. Robert McKenna having It is true, by section 4972 of the Revised Stat-
been appointed guardian of Maud McKenna, utes the jurisdiction of the District Courts of
an answer was filed by him, as such guardian, the United States, as courts of bankruptcy, ex-
for her, in which substantially the same mat-tends to all cases and controversies arising be
ters of defense were set up. The defendants tween the bankrupt and any creditor or credit-
Metcalf and Walker filed an answer and also a ors who may claim any debt or demand under
cross bill, asserting their lien on the premises. the bankruptcy, and to the collection of the
Proofs were then taken, from which it ap- assets of the bankrupt, and, indeed, to all acts,
peared that no money consideration ever passed matters, or things to be done under and in vir-
between the parties to the several conveyances tue of the bankruptcy, until the final distribu-
mentioned; that Solomon Rose, grantor to tion and settlement of his estate, and the close
Mrs. Kirkup, never saw her, and did not re- of the proceedings in bankruptcy. Under
member anything about the transaction, except these provisions the assignee might undoubted
that McKenna came to his office and asked him ly have brought suit to set aside the convey-
to go to the court house and make the conveyances in question in the District Court of the
ance; and that the deed of Mrs. Kirkup, dated
August 1, 1876, was acknowledged July 18,
1878, one month before McKenna's bankruptcy,
and was not registered until January 15, 1879,
six months afterwards. The court held that
the conveyances were voluntary and fraudu-
lent, and made to hinder, delay and defraud
the creditors of the bankrupt, McKenna; and
further, that the conveyances were inoperative
to create an estate in the wife and children of
McKenna as against the assignee in bankruptcy,
the same not having been filed for registration
until after the adjudication of the bankruptcy
of McKenna. It was also held that the de-
fendants Metcalf and Walker were entitled to
the lien asserted by them. A decree was ac-
cordingly entered in favor of the complainant,
adjudging that the title to the land was in him
as assignee, and that neither the defendant
Robert McKenna nor Maud McKenna had any
title thereto, and ordering that the complainant
recover the land and possession thereof; and

United States for the district. Had he done
so, this court would have had jurisdiction to
review its decree; but he was not precluded
from proceeding in the state court to set aside
the alleged fraudulent conveyances. And
when he resorted to that court, and no question
was raised as to his power under the Acts of
Congress, or the rights vested in him as as-
signee, the proceedings were governed, and the
judgment of the court upon the validity of the
conveyances was subject to review, in the same
manner and to the same extent as proceedings
of a similar character by a creditor to set aside
conveyances in fraud of his rights by a debtor.
Glenny v. Langdon, 98 U. S. 20 [25: 43], and
Trimble v. Woodhead, 102 U. S. 647 [26: 290],
were cases commenced in the Circuit Court of
the United States; and Barton v. Geiler, 108
U. S. 161 [27: 687], was commenced in a state
court. See also Clark v. Ewing, 9 Biss. 440;
Olcott v. Maclean, 73 N. Y. 223; and Goodrich
v. Wilson, 119 Mass. 429. In the proceedings

[509]

[511]

in the state court no decision was made against bling a municipality to do that which is forbidden
the validity of any statute of, or authority ex-
by such Constitution.
The Tennessee Act of February 8, 1870, con-
ercised under, the United States, or against any ferring upon the Town of Brownsville the author-
title, right, privilege, or immunity claimed un-ity to issue corporation bonds in aid of railroads
der the Constitution of the United States or any the Constitution of Tennessee which was adopted
cannot be availed of under the provisions of
statute thereof. No question, indeed, arose March 26, 1870, and went into effect on the 5th day
under the action of the state court which could of May in that year.
bring its decision within the provisions of sec-
tion 709 of the Revised Statutes.

[No. 1442.]

Submitted Jan. 4, 1889. Decided March 5, 1889.

5. The proceedings, resulting in the issue of the bonds whose validity is under consideration in this case, having been initiated May 11, 1870, five days The several cases to which our attention is after the Constitution went into effect, and the called, as being in supposed conflict with this election held on the 11th day of June following. view, have no bearing upon the questions in-issue the bonds, and their holders cannot recover. there was no authority to hold the election and to volved. In O'Brien v. Weld, 92 Û. S. 81 [23: 675], the question arose whether under the Bankrupt Act the District Court of the United States had authority to make the order inIN ERROR to the Circuit Court of the United volved, and the decision of the highest state States for the Western District of Tennescourt was against the authority; and that was see, to review a judgment for defendant, in a [512] held sufficient to sustain the federal jurisdic-suit upon municipal bonds. Affirmed. tion. In Factors Ins. Co. v. Murphy, 111 U. S. 738 [28: 582], the effect to be given to a sale of property under an order of the district court in bankruptcy was in question, the authority of the court to direct a sale free from incumbrances being denied. Jenkins v. International Bank of Chicago, 127 U. S. 484 [ante, 189], involved a question as to the authority of the assignee in bankruptcy to institute a suit touching any property or rights of property vested in him after the expiration of two years from the time when the cause of action accrued.

See S. C. below, 36 Fed. Rep. 99.

Statement by Mr. Chief Justice Fuller: Plaintiff in error brought suit in the Circuit Court of the United States for the Western District of Tennessee against the Board of Commissioners of the Taxing District of the City of Brownsville, Tennessee, and the president, treasurer, secretary and financial agent of that board, upon certain interest coupons annexed to bonds issued by the City of Brownsville, July 1, 1870. The cause was tried upon an agreed statement of facts, as follows:

The City of Brownsville was incorporated by Act of the General Assembly of Tennessee passed on February 24, 1870.

The records of the board of mayor and aldermen show the following proceedings had May 12, 1870:

"BROWNSVILLE, TENNESSEE, May 12, 1870. "A call-meeting of the board of mayor and aldermen met at the mayor's office. Members being all present, the board was called to order. Reading the minutes of the last meeting was dispensed with. Upon application of J. D. Smith, President of Brownsville and Ohio Railroad Company, and in pursuance of authority in us vested by the Act of General Assembly of State of Tennessee passed February 8, A. D. 1870, the board of mayor and aldermen of the City of Brownsville hereby order and direct that an election be held in our said

(See 8. C. Reporter's ed. 479-493.)
Tennessee Constitution—prohibition therein
previous law-Act of February 8, 1870-City, on Saturday, the 11th day of June next,
municipal bonds, when void.

at which election the qualified voters of our
said city will vote upon the proposition to issue
the bonds of the corporation to be subscribed
as stock in aid of the Brownsville and Ohio
Railroad, and in accordance with the provisions
of said Act, said bonds to have twenty years
to run, and be payable in City of St. Louis,
Missouri, and bear interest at the rate of eight
per cent per annum, said interest payable an-
nually in said city, and said bonds to be issued
to amount to the sum of fifty thousand dollars,
and be known as Brownsville railroad bonds.
Said election is to be advertised in The Browns-

1. The inhibition imposed by section 29 of the
Tennessee Constitution of 1870-that the credit of a
county, city or town shall not be given or loaned to
or in aid of any person, company, association or
corporation, and that a county, city or town shall
not become a stockholder in a corporation, except
upon an election to be first held by the qualified
voters of such county, city or town, and the assent
of three fourths of the votes cast at said election-
operates directly upon the municipalities them-
selves, and is absolute and seif executing; and such
county, city or town is destitute of power to give
or loan its credit, or to become stockholders, until
legislation authorizing the election and action
thereupon is had.
2. The prohibition of the loan or credit or the sub-ville Bee, the county newspaper of Haywood
scription to stocks, without a three-fourths vote,
is not an affirmative grant of authority to give or
loan credit or to become a stockholder upon a
three-fourths vote; further legislation is necessary
before the municipality can act.

County, for twenty days before said election.
Said bonds are to be issued to and taken by
the Brownsville and Ohio Railroad Company
in lieu of the sum of fifty thousand dollars
heretofore voted and subscribed by this cor-

3. Provision in a new Constitution, providing for
keeping in force all laws not inconsistent there-
with, does not perpetuate any previous law ena-poration to the said company in pursuance of

[480)

The following is a correct copy of one of the said fifty thousand dollars of bonds, and the others are like unto it:

section 6 of said Act of General Assembly of | Railroad Company in payment of a subscrip-
State of Tennessee of February 8, 1870. In tion theretofore made by said City of Browns-
voting at said election those voters who are in ville for fifty thousand dollars of the capital
favor of the issuance of said bonds in lieu of stock of said railroad company; and said stock
said subscription shall have written or printed so paid for was delivered by said railroad com-
upon their ballots bonds,' and those who are pany to said City of Brownsville and has ever
opposed to the issuance of said bonds shall have since been held and owned by said city.
written or printed on their ballots 'no bonds.' It
is ordered that the Sheriff of Haywood County
give notice, by advertisement in The Browns-
ville Bee for twenty days, of the time, place and
purpose of holding said election, and shall open
and hold the same at the usual voting place or
places in the City of Brownsville on Saturday,
June 11, 1870, and shall, as soon thereafter as
practicable, certify the result of said election to
this board. Full power and authority is here-
by given him to appoint judges and other offi-
cers of said election, and to do all things else
necessary and proper to carry into effect this
order."

481] On the 13th day of June, 1870, the Sheriff of
Haywood County, Tennessee, certified to the
Mayor and Aldermen of the City of Browns-
ville that he did hold the election thus ordered
in conformity to the terms of the order on the
11th of June, 1870, and that at said election
one hundred and thirty-nine votes were polled,
and the result was one hundred and thirty-nine
votes were cast for “bonds” and none for "no
bonds."

And on the said 13th day of June, 1870, the said Mayor and Aldermen of the City of Brownsville did ordain as follows:

On motion, the following ordinance was adopted, to wit: Whereas, it appears from the certificate of Jno. L. Sherman, sheriff of Haywood County, that in pursuance of an ordinance of this board passed 12th of May, 1870, that he did, on the 11th day of June, 1870, open and hold an election within the City of of Brownsville upon the proposition to issue fifty thousand dollars corporation bonds running twenty years, bearing interest from date at eight per cent per annum, payable in the City of St. Louis, Missouri, said bonds to be known as the Brownsville railroad bonds, and to be issued in aid of the construction of the Brownsville and Ohio Railroad, and that at said election one hundred and thirty-nine votes were cast in favor of said bonds and Lone against, it is therefore ordained by the board of mayor and aldermen of the City of Browns ville that the mayor, T. W. Tyus, subscribe to the Brownsville and Ohio Railroad Company the sum of fifty thousand dollars as stock, and that in payment of said subscription he sign and issue to said Brownsville and Ohio Railroad Company fifty thousand dollars corporation bonds, said bonds bearing interest from date at the rate of eight per cent per annum, payable in the City of St. Louis, Missouri, twenty years from date, said interest to be paid annually, said bonds to be issued in aid of the construction of said Brownsville and Ohio Railroad, and to be known as the Brownsville railroad bonds."

On the first day of July, 1870, fifty thousand dollars of the bonds of the City of Brownsville were issued under and in pursuance of the foregoing proceedings, payable July 1, 1890, and the same were by said City of Brownsville paid and delivered to the Brownsville and Ohio | 129 U. S. U. S., Book 32.

$500. United States of America. $500.
"City of Brownsville, State of Tennessee.
"Brownsville Railroad Bond.

"Interest at eight per cent, payable annually.
"Know all men by these presents, That the
corporation of the City of Brownsville, Ten-
nessee, is indebted to the bearer of this bond in
the sum of five hundred dollars, for value re-
ceived, which the said corporation hereby prom-
ises to pay on the first day of July, in the year
one thousand eight hundred and ninety, at the
office or agency of said corporation, in the City
of St. Louis, Missouri, with interest thereon
from the first day of July, eighteen hundred
and seventy, at the rate of (8) eight per centum
per annum, payable annually, at the said office
or agency, on the first day of July of each year,
on the presentation and surrender of the an
nexed coupons as they severally become due.
This bond is one of a series of one hundred
bonds for five hundred dollars each, numbered
from one to one hundred, inclusive, amounting
in the aggregate to fifty thousand dollars, and
issued by authority of an Act of the Legislature
of the State of Tennessee, passed February 8,
1870.

"In witness whereof the City of Brownsville
has caused these presents to be signed by its
mayor and recorder this the first day of July,
1870.

"T. W. Trus, Mayor.
"JOHN CLINTON, Recorder."

G. W. Norton became the holder and owner for value before maturity, and without notice of any infirmity in said bonds other than that given him on the face of the bonds and by the Constitution and Laws of Tennessee, of the interest coupons which matured July 1, 1874, taken from said bonds numbered 5, 7, 27, and 41, and the interest coupons which matured on July 1, 1883, 1884, 1885, and 1886, taken from said bonds numbered 27, 35, 41, 44, 62, 82, 83, 84, 85, 86, 48, 49, 55, 57, 58, 60, 90, 91, 95, 96, 97, 98, 99 and 100, being four coupons which matured July 1, 1874, for $40 each, and 24 coupons which matured July 1, 1883, and 24 which matured July 1, 1884, and 24 which matured July 1, 1885, and 24 which matured July 1, 1886, aggregating 100 coupons of $40 each, and upon these 100 interest coupons the said G. W. Norton, on the 20th of May, 1887, instituted his said suit against the Board of Commissioners of the Taxing District in the City of Brownsville in said Circuit Court of the United States for the Western District of Tennessee, being No. 2933 on the law docket of said court, which is the cause recited in the caption hereof, to be submitted to said court upon the pleadings and this agreement of facts. The Mayor and Aldermen of the City of Brownsville at a meeting of said board, held

[482]

[483]