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Argument for Appellee.

Wood Mowing Machine Co. v. Skinner, 139 U. S.

in error. 293.

Mr. Charles A. Peabody for appellee, on the merits said:

The court did not hold the plaintiff in error liable because the state bank transferred its assets to the plaintiff in error.

If it did, such transfer took place more than twenty years ago, and the six years' statute of limitations would apply.

The mere transfer of property from A to B does not create a common law liability on the part of B to pay A's creditors. A creditor of A may obtain judgment and by a suit in equity get a lien upon the property transferred to B and by proceedings in equity recover his debt. But here also the statute of limitations would apply, and this court will not assume that the New York court ignored that defence which was duly set up in the answer.

The only way the judgment can be sustained is by holding that the contract of the state bank became the contract of the national bank without any change or modification.

The plaintiff in error became a corporation without the aid of the laws of New York. From abundant caution it complied with all the provisions of the act of 1865. The state law could not impose on the plaintiff in error the obligations of another corporation and it did not attempt to do so. The most that the state law says is that the law should not be construed as releasing the obligations of the old bank. No searching of the law will discover any provision making the two banks identical.

The question involved is not a frivolous one. The New York Court of Appeals, City Bank v. Phelps, 86 N. Y. 484, 491, says this question “is not so easy of concession or refuta

« tion as it may seem at first sight.”

A judgment for over $14,000 has been obtained against a corporation created by the national authority upon contracts which it never made and never assumed. Although a corporation during its existence continues to be the same body, the stockholders, whose property the corporation holds, change;

Opinion of the Court.

and after twenty-five years very few persons are probably now interested in this matter who were stockholders of the plaintiff in error in 1865. The present directors are trustees winding up a closing bank, and it is their duty to ascertain with care who are the true creditors of the bank.

MR. JUSTICE LAMAR, after stating the case, delivered the opinion of the court.

The first assignment of error is as follows:

“That the Metropolitan National Bank, the plaintiff in error, which was created under the act of Congress entitled 'An act to provide a national currency secured by the pledge of United States bonds, and to provide for the circulation and redemption thereof,' approved June 3, 1864, is held liable to pay the bills described in the complaint, which were made by the Metropolitan Bank, a corporation created under the law of the State of New York, entitled 'An act to authorize the business of banking,' passed April 18, 1838."

The second defence set up in the answer, as we have seen, is, that the defendant below (the plaintiff in error) became a national bank under the authority of the act of Congress of 1864, entitled "An act to provide a national currency secured by the pledge of United States bonds, and to provide for the circulation and redemption thereof,” and thereby acquired immunity from liability for the bank bills issued by the state bank. The court found that the plaintiff in error did become a national bank doing a banking business under the laws of the United States, but decided that it did not thereby acquire an immunity from liability to pay the bank bills of the Metropolitan Bank of New York, upon the ground that the proceedings set up in the answer did not terminate the existence of the state bank, but simply effected a continuation of the same body under a changed jurisdiction. In this we think the record presents a claim of Federal immunity raised by the plaintiff in error and denied by the court, which brings the case within the jurisdiction of this court; and upon the authority of McNulta v. Lochridge, decided at this term of the court, ante,

Opinion of the Court.

327, the motion to dismiss is denied. But as the record also shows there was color for the motion to dismiss, it is proper that we should proceed to a review of the judgment of the court below.

The question we are to consider here is, did the court err in holding that the plaintiff in error was not exonerated from liability either by its becoming a national bank or by the proceedings for the redemption and retirement of its circulating bills issued whilst a state bank, which proceedings, it was claimed, were in strict observance of every requirement of the New York statute of 1859 in relation thereto, or by the statute of limitations of the State of New York? The court decided that the New York statute providing for a redemption of circulating notes and for releasing the bank, if the notes were not presented in six years, applied alone to banks “closing the business of banking;” that the change or conversion of the Metropolitan Bank into the Metropolitan National Bank did not "close its business of banking "nor destroy its identity or its corporate existence, but simply resulted in a continuation of the same body with the same officers and stockholders, the same property, assets, and banking business under a changed jurisdiction ; that it remained one and the same bank, and went on doing business uninterruptedly; and that, therefore, the statutory proceedings relied upon in the answer could not operate as a bar to the liability of either bank to pay the bills delivered by the Metropolitan Bank in 1861 to plaintiffs’ intestate.

This decision is so manifestly correct that it needs no argument to sustain it. The judgment is, therefore,

Affirmed.

The CHIEF JUSTICE, MR. JUSTICE BRADLEY and MR. JUSTICE Gray took no part in the consideration and disposition of this motion,

Opinion of the Court.

CROSS V. ALLEN.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE

DISTRICT OF OREGON.

No. 23. Argued October 13, 1891. - Decided November 16, 1891.

The transfer of an overdue note and mortgage for a valuable consideration

to a bona fide purchaser, is not a collusive transaction which prevents the transferee from maintaining an action upon them, under the provi. sions of the act of March 3, 1875, 18 Stat. 470, c. 137, § 1; although made

to make a case to be tried in a Federal Court. It being conceded that this case comes within the rules laid down in Ackley

School District v. Hall, 113 U. S. 135, and in New Providence v. Halsty, 117 U. S. 336, this court adheres to the doctrines enunciated in those

cases.

The payment by the principal debtor, after the death of his wife, of interest

upon a note, signed by him alone, but secured by a mortgage upon her separate real estate executed by her, operates in Oregon to keep alive the lien upon the property for the sec of the mortgage debt, as against

the statute of limitations of that State. So long as demands secured by a mortgage are not barred by the statute of

limitations, there can be no laches in prosecuting a suit upon the mort

gage to enforce them. While adhering to the rule that any material change in a contract made by

the principal without the assent of the surety, discharges the latter, the court is of opinion that the changes set up in this case as a reason for the discharge of the property of the surety were not material and did not

operate to discharge it. Under the constitution and laws of Oregon, in force when these contracts

were made, a married woman could bind her separate property for the

payment of her husband's debts. This court is bound to assume that decisions of state courts on matters of

state law have been made after thorough consideration, and that they embody the deliberate judgment of the court.

The case is stated in the opinion.

Mr. John 11. Mitchell for appellants.

Mr. C. E. S. Wood for appellees. Mr. George H. Williams was with him on the brief.

MR. JUSTICE LAMAR delivered the opinion of the court.

Opinion of the Court.

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This was a suit in equity to foreclose two mortgages of real estate in Oregon. The case is this : On the first of November, 1871, Thomas Cross of Salem, Oregon, gave his note to the firm of Allen & Lewis of Portland in that State, for $30,000, payable in three years, with interest at 10 per cent per annum from date; and to secure its payment he and his wife, Pluma F. Cross, on the same day executed a mortgage in favor of that firm upon fifteen parcels of agricultural land in that State, numbered respectively from "one" to "fifteen," and containing over 3000 acres. Parcels “14” and “15," containing about 211 acres, were the separate property of Pluma F. Cross, while the remainder of the property belonged to Thomas Cross. On January 23, 1872, they gave another mortgage to the same firm upon the same property embraced in the preceding mortgage and certain town lots in Salem, to secure the payment of another note, of even date therewith, given by said Thomas Cross to said firm, for $10,000, due in one year, and bearing twelve per cent interest from date.

On the 16th of September, 1872, before either note became due, Pluma F. Cross died, but there was never any administration of her estate.

Nothing was paid on either of the notes when they became due, but on the 22d of January, 1876, Thomas Cross conveyed the premises embraced in the mortgages to C. H. Lewis of Portland, one of the members of the firm to which the mortgages were given. This çonveyance, though absolute in form, was in fact, and was intended to be, upon the following trusts: (1) that the grantee should, at the cost and expense of the lands, keep them in cultivation, or lease or let them, or any part of them ; (2) that he should sell and dispose of the crops, collect the rents, and, after deducting all necessary and proper charges and expenses connected therewith and incident thereto, apply the net proceeds thereof upon the mortgage debts; and (3) that he might, with the consent of said Thomas Cross, sell any portion or portions of said premises either at public or private sale, and apply the net proceeds of such sales toward the satisfaction of the mortgage debts.

During the year 1876, Lewis, with the assent of Thomas

VOL. CXLI-34

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