In order to give this Court jurisdiction to review the judgment
of a state court against a title or right set up or claimed under a
statute of, or an authority exercised under, the United States,
that title or right must be
Page 168 U. S. 643
a title or right of the plaintiff in error and not of a third
person only, and the statute or authority must be directly in
issue. In this case, the controversy was merely as to which of the
claimants had the superior equity in the fund; the statute was only
collaterally involved, and plaintiffs in error asserted no right to
the money based upon it.
In September, 1889, Witherby & Gaffney entered into a
contract with the government of the United States to construct
certain buildings at Sackett's Harbor, New York. Thereafter they
purchased from York & Starkweather lumber and materials, which
were used in the construction of the buildings, and on March 27,
1890, were indebted on account of these materials in the sum of
more than $3,000. Being so indebted, Witherby & Gaffney on that
date executed and delivered to York & Starkweather an
instrument in writing, as follows:
"Whereas we have a contract with the United States government
for the construction of buildings and officers' quarters at Madison
Barracks, Sackett's Harbor, Jefferson County, N.Y."
"And whereas, we are indebted to York & Starkweather, of
Watertown, N.Y., in the sum of three thousand dollars and more on
account of materials furnished us by them, that were used in said
buildings and quarters."
"And whereas, there will be due and payable to us, on account of
our work etc., from the government, considerable sums of money
before and on the completion of our said work,"
"Now therefore of the moneys due and to become due us from the
said government we do hereby, for value received, assign and
transfer to said York & Starkweather the sum of three thousand
dollars, and do hereby authorize, empower, request, and direct
Lieutenant J. E. Macklin, R.Q.M. Eleventh infantry, U.S.A., through
whom payments are made for such construction, to pay to said York
& Starkweather, on our account, for such construction, the full
sum of three thousand dollars, as follows: first, $500 from the
next estimate and payment due or to become due us, and the sum of
$2,500 on the completion of said work by us, and when the
Page 168 U. S. 644
balance of our contract with the government becomes due and
payable to us."
On the seventh of April, Witherby & Gaffney paid York &
Starkweather, $500, but no further payment was made by them. On May
15, 1890, Lieutenant Macklin, the disbursing agent of the United
States government at Sackett's Harbor, gave a draft on the Treasury
to the amount of $4,400 to Witherby & Gaffney, which was turned
over by them on that day to Conde & Streeter. Before Conde
& Streeter received this draft, they had been fully notified of
the paper delivered to York & Starkweather, and, while the
draft was in their hands, York & Starkweather demanded $2,500
thereof from them, which they refused to pay, or any part thereof.
Conde & Streeter asserted a prior right to the draft and moneys
in question by virtue of an alleged oral agreement with Witherby
& Gaffney to secure the payment of certain notes upon which
they were liable as endorsers, and for individual claims they held
against them. Conde was one of the sureties on Witherby &
Gaffney's bond to the government, and it seems to be conceded that
Witherby & Gaffney obtained the money on Conde & Streeter's
accommodation endorsements for the purpose of enabling them to
carry on the work under the contract. Conde & Streeter applied
the money to pay notes to the amount of $3,200 which they had
endorsed, and individual claims to the amount of $600, and about
$600 was returned to Witherby & Gaffney.
April 16, 1890, Witherby & Gaffney executed to Conde &
Streeter an agreement by which they promised to pay off and
discharge, from the money to be received by them from the
government, certain notes endorsed by Conde & Streeter, and
certain individual indebtedness held by them against Witherby &
Gaffney. On April 18th, Witherby & Gaffney made a written
assignment to Conde & Streeter of sufficient of the money in
question to pay the notes and claims mentioned, in these words:
"That there may be no misunderstanding about the intention of
the foregoing agreement, we hereby assign, for value
Page 168 U. S. 645
received, to John C. Streeter and Wm. W. Conde, sufficient of
the moneys coming to us from Lieut. Macklin, R.Q.M., to pay the
claims as specified in the aforegoing agreement."
York & Starkweather brought suit against Conde &
Streeter in the Supreme Court of New York for the County of
Jefferson. Two defenses were set up by Conde & Streeter, the
second of which was
"that the money, claim, and property claimed by the plaintiffs
in this action to have been assigned to them by Witherby &
Gaffney at the time of the pretended assignment thereof,
constituted and was a claim against the United States government,
which had not been allowed, or the amount due thereon ascertained,
or the warrant issued for the payment thereof, and that the
pretended assignment thereof does not recite the warrant for
payment issued by the United States, and is not acknowledged by the
person making the same before an officer having authority to take
acknowledgments of deeds, and is not certified by such officer, and
that said pretended assignment is in violation of the laws of the
United States and of the State of New York, and that the plaintiffs
never derived any interest in the said contract with the United
States by virtue of the said pretended assignment or otherwise, and
are not the real parties in interest in this action, and ought not
therefore to maintain the same; that said Witherby & Gaffney
never transferred any interest in the said contract to the said
plaintiffs."
The trial resulted in a verdict in favor of York &
Starkweather, upon which judgment was entered, which was affirmed
by the general term, and that judgment affirmed by the Court of
Appeals.
York v. Conde, 147 N.Y. 486. A writ of error was
then allowed from this Court.
MR. CHIEF JUSTICE FULLER, after stating the facts in the
foregoing language, delivered the opinion of the Court.
Plaintiffs in error contended in the courts below that they were
entitled to the fund in question by virtue of an oral
Page 168 U. S. 646
transfer prior to the assignment to defendants in error, and of
the writings executed subsequently thereto, and that defendants in
error acquired no right to the fund by their assignment, because
such assignment was in violation of § 3477 of the Revised
Statutes of the United States. But they did not claim that they
acquired any right or title to the fund by reason of the section,
nor was its validity questioned in any way.
In delivering the opinion of the Court of Appeals of New York,
its able and experienced Chief Judge said:
"The claim set up by the defendants in their answer, that, prior
to the assignment to the plaintiffs, Witherby & Gaffney had
verbally assigned to them the money to become due on the contract
as security for their endorsements, was tried before the jury and
found against them, and need not be further considered. There can
be no doubt that under the general rule of law prevailing in this
state, the plaintiffs, under the assignment of March 27, 1890,
acquired an equitable, if not a legal, title to the money payable
on the contract of Witherby & Gaffney with the government to
the extent of $3,000, and that the defendants, having acquired
possession of the draft for the final payment on the contract, by
delivery from Witherby & Gaffney, to secure an antecedent
liability, on being notified of the claim of the plaintiffs, held
the draft and the fund it represented, as trustee of the
plaintiffs, to the extent of their claim.
Field v. Mayor,
&c., 6 N.Y. 179;
Devlin v. Mayor, &c., 63
N.Y. 8."
"But the contention is that the plaintiffs took nothing under
the assignment to them because, as is claimed, the transaction was
void under § 3477 of the Revised Statutes of the United
States, to which reference has been made. That section is as
follows:"
"All transfers and assignments made of any claim upon the United
States, or of any part or share thereof or interest therein,
whether absolute or conditional, and whatever may be the
consideration therefor, and all powers of attorney, orders, or
other authorities for receiving payment of any such claim, or of
any part or share thereof, shall be absolutely null and void,
unless they are freely made and executed
Page 168 U. S. 647
in the presence of at least two attesting witnesses, after the
allowance of such a claim, the ascertainment of the amount due, and
the issuing of a warrant for the payment thereof. Such transfers,
assignments, and powers of attorney must recite the warrant for
payment and must be acknowledged by the person making them before
an officer having authority to take acknowledgments of deeds, and
shall be certified by the officer, and it must appear by the
certificate that the officer at the time of the acknowledgment,
read and fully explained the transfer, assignment, or warrant of
attorney to the person acknowledging the same."
"This section has been considered in several cases by the
Supreme Court of the United States. If that court has construed the
section so as to determine the point involved in this case, we
should deem it our duty to follow its decision. The judgment we
shall render will not, we suppose, be subject to review by the
Supreme Court. We do not question the validity of the section in
question, nor will our decision affect any right of the defendants
based thereon. Their right, if any, rests upon the transfer of the
draft after it came to the hands of Witherby & Gaffney. They
seek to defeat the right of the plaintiffs under their prior
assignment of a portion of the fund, and invoke section 3477 to
establish that the assignment was void and conferred no right. But
on a question of statutory construction of an act of Congress which
has been determined by the Supreme Court of the United States,
subsequently arising in this Court, we should feel bound to adopt
and follow the construction of that tribunal on the principle of
comity, although in a case where the ultimate jurisdiction is
vested in this Court."
Many decisions of this Court in respect of section 3477 were
then considered, and the conclusion reached that the section had
been so construed as to permit transfers made in the legitimate
course of business, in good faith, to secure an honest debt, while
they might be disregarded by the government, to be sustained as
between the parties so far as to enable the transferees, after the
government had paid over the money to its contractors, to enforce
them against the latter or those taking
Page 168 U. S. 648
with notice. The court held in effect that such was the
transaction in the case at bar, and that the transfer to York &
Starkweather was simply to secure them for material actually used
by the contractors in performing their contract with the
government, and amounted to nothing more than the giving of
security, and not to the assignment of a claim to be enforced
against the government. The United States had in due course paid
over the money to the contractors, and between them there was no
dispute; nor had the United States any concern in the question as
to which of the rival claimants was entitled to the fund the proper
distribution of which depended on the equities between them. What
the New York courts determined was that the equities of York &
Starkweather were superior to those of Conde & Streeter, and
judgment went accordingly.
In order to give this Court jurisdiction to review the judgment
of a state court against a title or right set up or claimed under a
statute of, or an authority exercised under, the United States,
that title or right must be a title or right of the plaintiff in
error, and not of a third person only, and the statute or authority
must be directly in issue. In this case, the controversy was merely
as to which of the claimants had the superior equity in the fund.
The statute was only collaterally involved, and plaintiffs in error
asserted no right to the money based upon it.
In
Aldrich v. Aetna
Company, 8 Wall. 491, the question was whether the
mortgage of a vessel, properly recorded under an act of Congress,
gave a better lien than an attachment issued under a state statute,
and the decision by the state court was that it did not. The
construction of the act of Congress, and its force and effect as it
respected the mortgage security under which defendants claimed a
right or title paramount to that of the attachment creditor, were
necessarily directly involved, and a proper case for review
existed.
In
Railroads v.
Richmond, 15 Wall. 3, in a suit on a contract,
defendants set up that the contract had been rendered void and of
no force and effect by provisions of the Constitution of the United
States and of certain acts of Congress, and
Page 168 U. S. 649
the decision of the Supreme Court of Iowa was adverse to that
defense. The case being brought here, a motion to dismiss the writ
of error was denied.
In each of these cases, the defense was rested upon a title or
right of defendants specially claimed under the Constitution or
laws of the United States, and, being adversely disposed of,
jurisdiction obtained.
Here, no such contention was put forward. The materials of
plaintiffs below had gone into the buildings, while, on the credit
of defendants, money had been raised for their construction. Both
held written agreements from the same source for the money when
paid over, but that of defendants below was subsequent in date to
the other. Neither asserted any right under section 3477.
In
Walworth v.
Kneeland, 15 How. 348, it was ruled, where a case
was decided in a state court against a party who was ordered to
convey certain land, and he brought the case up to this Court on
the ground that the contract for the conveyance of the land was
contrary to the laws of the United States, that this was not enough
to give jurisdiction to this Court under the twenty-fifth section
of the Judiciary Act. The state court decided against him on the
ground that the opposite party was innocent of all design to
contravene the laws of the United States. Mr. Chief Justice Taney,
however, said:
"But if it had been otherwise, and the state court had committed
so gross an error as to say that a contract forbidden by an act of
Congress or against its policy was not fraudulent and void, and
that it might be enforced in a court of justice, it would not
follow that this writ of error could be maintained. In order to
bring himself within the twenty-fifth section of the act of 1789,
he must show that he claimed some right -- some interest -- which
the law recognizes and protects and which was denied to him in the
state court. But this act of Congress certainly gives him no right
to protection from the consequences of a contract made in violation
of law. Such a contract, it is true, would not be enforced against
him in a court of justice; not on account of his own rights or
merits, but from the want of merits and good conscience in
Page 168 U. S. 650
the party asking the aid of the court. But, to support this writ
of error, he must claim a right which, if well founded, he would be
able to assert in a court of justice, upon its own merits and by
its own strength. No such right is claimed in the answer of the
plaintiff in error. . . . Neither can the writ of error be
supported on the ground that Walworth was unable to purchase, at
one dollar and twenty-five cents per acre, another portion of the
land mentioned in the contracts in consequence of its subsequent
cession by the United States to the Territory of Wisconsin. Whether
that cession, and the enhanced price at which it was held, absolved
him from the obligation of performing any part of the contract
depended altogether upon its construction. The rights of the
parties did not depend on the act of Congress making the cession,
but upon the contract into which they had entered, and the
construction of that agreement, and the rights and obligations of
the parties under it, were questions exclusively for the state
court, and over its decree in this respect this Court has no
control."
In
Jersey City & Bergen Railroad v. Morgan,
160 U. S. 288, in
an action brought in a state court against a railroad company for
ejecting the plaintiff from a car, the defense was that a silver
coin offered by him in payment of his fare was so abraded as to be
no longer legal tender, and that defense was overruled, and, a writ
of error having been sued out by the railroad company from this
Court to review the judgment thereupon rendered against it, we held
that the writ could not be maintained. It was there said:
"The claim which defendant now states it relied on is that the
coin in question was not legal tender under the laws of the United
States. This, however, is only a denial of the claim by plaintiff
that the coin was such, and as, upon the facts determined by the
verdict, the state courts so adjudged, the decision was in favor
of, and not against, the right thus claimed under the laws of the
United States, if such a right could be treated as involved on this
record, and this Court has no jurisdiction to review it.
Missouri v. Andriano, 138 U. S. 496, and cases cited.
And, although denying plaintiff's claim, defendant did
Page 168 U. S. 651
not pretend to set up any right it had under any statute of the
United States in reference to the effect of the reduction in weight
of silver coin by natural abrasion."
Writ of error dismissed.
