# Williams v. Oliver (53 U.S. 111)

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United States Supreme Court
53 U.S. 111
Williams v. Oliver
THIS case was brought up from the Court of Appeals of Maryland, by a writ of error issued under the 25th Section of the Judiciary Act.
It was a branch of the case of Gill v. Oliver's Executors, reported in 11 How., 529, although it differed from that case in some particulars, which will be mentioned. The history of the Baltimore Mexican Company was given in the report of that case, and need not be repeated.
James Williams was the owner of one of the shares of the company, and applied for the benefit of the Insolvent Laws of Maryland on the 24th of June, 1819. George Winchester was appointed provisional trustee, and gave bond as such; and James Williams conveyed and assigned to him, as provisional trustee, all his property whatever for the benefit of his creditors. On the 2d of August, 1819, Winchester executed a bond without security, reciting that he had been appointed permanent trustee, and the bond was conditioned for the faithful performance of his duties as such. The laws of Maryland required security to be given when such a bond was executed.
At March term, 1825, Baltimore County Court passed the following order:--
'In Baltimore County Court, March Term, 1825.
'In the case of James Williams, an Insolvent Debtor:
'Ordered by the court, that the trustee dispose of any part of the personal estate of the said insolvent debtor remaining unsold at public or private sale, as he may judge best.
'WM. H. WARD.'
On the 2d of April, 1825, Winchester assigned to Robert Oliver the share in the Mexican Company belonging to Williams, and signed a receipt for $2000 as the consideration for the sale.
Winchester having died, Nathaniel Williams, the plaintiff in error, was appointed permanent trustee of James Williams, the insolvent, on the 15th of November, 1841, and gave bond with security, as required by law.
In the report of the case of Gill v. Oliver's Executors, it was stated in what manner the money came into the hands of Glenn and Perine as trustees, and how it came to be deposited in court for claimants to make out their title.
On the 29th of January, 1842, Nathaniel Williams filed his petition, claiming the amount which belonged to the share of his insolvent, James Williams.
On the 9th of March, 1842, the Legislature of Maryland passed an act (December Session, 1841, chapter 309), entitled 'An act to confirm the titles of purchasers in the cases therein mentioned;' which act was passed on the memorial of Oliver's representatives, and was alleged to cure the defects resulting from Winchester's assignment without his having given security upon his bond as permanent trustee.
On the 2d of May, 1842, the executors of Oliver and the trustees filed their answer to the petition of Nathaniel Williams. They claimed the share of James Williams on two grounds: 1st, under the purchase from Winchester; 2d, because the award of the commissioners was a full and complete bar of all right and title on the part of Nathaniel Williams.
On the 5th of December, 1846, Baltimore County Court decreed in favor of the executors of Oliver, holding the act of 1841 to be constitutional. On the second point the court decided that the award of the commissioners was not conclusive.
Williams prosecuted an appeal to the Court of Appeals of Maryland.
At June term, 1843, the Court of Appeals affirmed the decree of the County Court, three judges sitting. One of them, Judge MARTIN, filed the following reasons, viz.:
I think that George Winchester is to be considered, upon the facts exhibited in this record, as duly and legally appointed the permanent trustee of James Williams; that the sale by him of the shares in controversy to Robert Oliver, was fairly and bona fide made within the meaniug of the act of Assembly of 1841, ch. 309; and that that statute being, in my opinion, neither repugnant to the Constitution of the United States nor the Constitution of the State of Maryland, is to [be] regarded as a valid exercise of legislative power.
The other two judges, viz., Chief Justice DORSEY and Judge SPENCE, stated that the grounds upon which they affirmed the judgment were, first, the reasons assigned by the majority of this court for the reversal of the decree in Oliver's Executors et al. v. Gill, Permanent Trustee of Goodwin; and because, under the proceedings based on, or originating from, the insolvent petition of James Williams and the act of Assembly applicable thereto, Robert Oliver acquired a valid title to all the interest of said James Williams in the fund in controversy.
The reasons assigned by the majority of the court for the reversal of the decree in Oliver's Executors et al. v. Gill, and which are adopted as above and made part of the reasons for the decision given in the present case of Williams, Trustee, v. Oliver's Executors, were published in the report of the case of Gill v. Oliver's Executors, in 11 How., 529. They are here repeated: 'The majority of this court, who sat in the trial of this cause, (and by which was decreed the reversal of the decree of the County Court), at the instance of the solicitors of the appellees, briefly state the following as their reasons for such reversal: They are of opinion that the entire contract, upon which the claim of the appellees is founded, is so fraught with illegality and turpitude as to be utterly null and void, and conferring no rights or obligations upon any of the contracting parties, which can be sustained or countenanced by any court of law or equity in this state or of the United States. That it has no legal or moral obligation to support it, and that, therefore, under the insolvent laws of Maryland, such a claim does not pass to or vest in the trustee of an insolvent petitioner. It forms no part of his property or estate, within the meaning of the legislative enactments constituting our insolvent system. It bears no analogy to the cases decided in Maryland, and elsewhere, of claims not recoverable in a court of justice, which, nevertheless, have been held to vest in the trustees of an insolvent or the assignees of a bankrupt. In the cases referred to, the claims, as concerned those asserting them, were, on their part, tainted by no principle of illegality or immorality; on the contrary, were sustained by every principle of national law and natural justice, and nothing was wanting to render them recuperable but a judicial tribunal competent to take cognizance thereof. Wholly dissimilar is the claim before us. Such is its character, that it cannot be presented to a court of justice but by a disclosure of its impurities; and if any thing is conclusively settled, or ought to be so regarded, it is that a claim, thus imbued with illegality and corruption, will never be sanctioned or enforced by a court either of law or equity.
'Entertaining this view of the case, it is unnecessary to examine the various minor points which were raised in the argument before us.'
These reasons, as has been before remarked, are made applicable to the present case of Williams v. Oliver's Executors.
Williams sued out a writ of error and brought his case up to this court.
It was argued by Mr. Dulany and Mr. Schley, for the plaintiff in error, and Mr. Campbell and Mr. Johnson, for the defendants in error.
The counsel for the plaintiff in error contended for the following positions:
1. The record presents a case, within the appellate jurisdiction of this court, under the provisions of the 25th section of the Judiciary Act.
In support of the jurisdiction claimed, two grounds were assumed: 1st. The effect of the treaty with Mexico, and the effect of the act of Congress of the 12th of April, 1840, and the effect of the award, as establishing the amount and validity of the claim of the Mexican Company of Baltimore, were all necessarily involved in the decision of the case, if the decree is to be considered as based, in any degree whatever, on the imputed turpitude of the contract of said company with General Mina: 2d. The validity of the act of the General Assembly of Maryland, (act of 1841, ch. 309,) was drawn in question, on the ground of its alleged repugnancy to the Constitution of the United States, and its validity was maintained by the Court of Appeals. The following authorities were relied on: Crowell v. Randell, 10 Pet., 392, and the various cases referred to, and commented on, in the opinion in that case; Scott v. Jones, 5 How., 376, and the cases cited in the opinion in that case; Smith v. Hunter, 7 How., 744.
2. The imputed turpitude in the original contract of said Mexican Company with General Mina, even if such turpitude at any time attached to the contract, was not a ground which the Court of Appeals was at liberty to assume as the basis of their said decree. In doing so, they refused to give effect to an award based on the said treaty and said act of Congress. The right to receive the money was conclusively established. The only open question property before that court was this, Who was entitled to the share accruing in right of said insolvent? The following authorities were relied on: Comegys v. Vasse, 1 Pet., 193; Frevall v. Bache, 14 Id., 95; De Valangin's adm'rs v. Duffy, 14 Id., 291.
3. Apart from this notion of original turpitude, the claim vested in the permanent trustee of the insolvent, for the benefit of his creditors. Plater v. Scott, 6 Gill & J. (Md.), 119; Stevens v. Bagwell, 15 Ves., 139; Comegys v. Vasse, 1 Pet., 193; Wheat. Int. Law, 56-63.
4. Independently of the act of 1841, the representatives of Robert Oliver had no right to this share, which could have been enforced in any tribunal of law or equity. The Insolvent laws of Maryland, and particularly the act of 1808, ch. 71, sec. 3; Winchester, Trustee of Williams, v. Union Bank, 2 Gill & J. (Md.), 73; Winchester, Trustee of Gooding v. Union Bank, Id., 79; Glasgow v. Sands, 3 Id., 96; Glenn v. Karthaus, 4 Id., 385; Kennedy v. Boggs, 5 Har. & J. (Md.), 408; Brown v. Brice, 2 Har. & G. (Md.), 24; Williams v. Ellicott, 6 Har. & J. (Md.), 427.
5. The act of 1841, chap. 309, is repugnant to the tenth section of the first article of the Constitution of the United States. It is a law which, in its application to this case, impairs the obligation of a contract.
In the discussion of this point, it was insisted that it impairs the obligation of the original contracts of the insolvent with his various creditors; that it impairs the obligation of the bond given by Mr. Winchester as provisional trustee; that it impairs the rights of creditors, as cestuis que trust, and the rights of the plaintiff in error as permanent trustee, under the deed of trust to Mr. Winchester, as provisional trustee; that it also impairs, as to the creditors, the obligation of the bond of the plaintiff in error as permanent trustee. It will also be insisted that the plaintiff in error, in his appointment as permanent trustee, and his qualification, by filing an approved bond, became entitled by law to his commission on the assets composing the estate of the insolvent, and which vested in him, on his qualification as permanent trustee, and also deprived him of his right to allowance out of said estate, for his necessary disbursements; and that such, his right, is based on contract, within the true interpretation of the said section of said article of the Constitution; and that said act, as to him, is unconstitutional and void, as it does not save his commission nor make provision for payment of his disbursements. In the discussion of this point, the following authorities were relied on: Bronson v. Kinzie, 1 How., 311; Green v. Biddle, 8 Wheat., 1; McCracken v. Hayward, 2 How., 608; Gantley's Lessee v. Ewing, 3 Id., 707; Cook v. Moffatt, 5 Id., 295; Planters' Bank v. Sharp, 6 Id., 318, and the cases cited in the opinion in that case; 12 Wheat., 311, 312; Rogers v. Wright, 9 Gill & J. (Md.), 184. The following cases were referred to for illustration, and as showing, by analogy, the rights which attached to the claims of creditors on the application of the insolvent: Scott v. Jones, 4 Cla. & F., 397, 398; Freake v. Cranefield, 3 Myl. & C., 499, and in 14 Eng. Cond. Ch. Rep., 500; Welch v. Stewart, 2 Bland (Md.), 41; Post v. Mackall, 3 Id., 498. It was also insisted, in the discussion of this point, that the said act, in its application to this case, impaired the obligation of the contract of sale made by said insolvent, before his application, to the firm of Stump & Williams, of the one half of his said share; and that the said act, as to the representatives of Stump & Williams, is unconstitutional and void. Mitford v. Mitford, 9 Ves., 87, and notes; Wright v. Morley, 11 Id., 17; Dyer v. Pearson, 3 Barn. & C., 38, in 10 Eng. C. L., 13; 2 Story Eq. Jur., §§ 1411, 1038, 1040 b, 1044; E. & S. Kip v. The Bank of New York, 10 Johns. (N. Y.), 63; Muir v. Schenck, 3 Hill (N. Y.), 228.
The counsel for the defendant in error presented the following points:
1st. The decision below turns upon two grounds, each of which is conclusive of the case, and the second, to wit, that 'under the proceedings based on or originating from the insolvent petition of Williams and the act of Assembly applicable thereto, Oliver acquired a valid title to all the interest of James Williams in the fund in controversy,' resting upon the conjoint operation of the sale made by order of court and the act of Assembly, is not subject to revision here, because the effect of the sale so made was exclusively for the court below, and it does not appear to what extent that consideration affected the decree of the Court of Appeals.
2. The petition of the plaintiff in error does not specially set up or claim any right or title under the convention with Mexico, or the act of Congress, or the award made in pursuance of them, nor does the court below decide against any such right or title. The petition denies the title of Oliver's executors, and rests its demands on the official character of the plaintiff in error, as giving him title under the insolvent laws of Mayland, and on the trusts of the deed of the 8th May, 1841, as constituting them trustees for him being so entitled, and the decision of the state court turns altogether on its construction of those insolvent laws, which confer, in its judgment, no title on the plaintiff in error. Udell v. Davidson, 7 How., 771; Smith v. Hunter, 7 Id., 743; Maney v. Porter, 4 Id., 55; McDonogh v. Millaudon, 3 Id., 705; Downes v. Scott, 4 Id., 502; Kennedy v. Hunt, 7 Id., 593; Fulton v. McAffee, 16 Pet., 149; Coons v. Gallagher, 15 Id., 18; McKenney v. Carroll, 12 Id., 66; Crowell v. Randell, 10 Id., 392; Montgomery v. Hernandez, 12 Wheat., 129; Williams v. Norris, 12 Id., 117; Hickie v. Stark, 1 Pet., 98; Mathews v. Zane, 7 Wheat., 206; Owings v. Norwood, 5 Cranch. 344; Smith v. The State of Maryland, 6 Id., 286; Plater v. Scott, 6 Gill & J. (Md.), 116; Hall v. Gill, 10 Id., 325; 1 U.S. Stat. at L., 384.
3. The decision of the state court, that Williams's claim did not pass to his permanent trustee on account of its illegality and turpitude, does not conflict with the award, or the treaty or act of Congress under which the award was passed, because the commissioners were empowered to decide nothing but the liability of Mexico for the claims set up against that republic, which were admitted by Mexico prior to the treaty, but long after Williams's application; and because the said convention or treaty of 1839 and the proceedings under it cannot affect the question, whether the insolvent laws of Maryland did or did not operate in 1819 to transfer the claim to the trustee of Williams, the force and effect of these laws at the time when Williams applied, being the question before the court below. Comegys v. Vasse, 1 Pet., 212; Sheppard v. Taylor, 5 Id., 713; Frevall v. Bache, 14 Id., 97; Maryland Acts of 1805, ch. 110, and 1816, ch. 221; Hall v. Gill, 10 Gill & J. (N. Y.), 325.
4. By the well-settled law of Maryland, as applicable to Williams's and all other applications for the benefit of the insolvent laws at that period (1819), the plaintiff in error, as trustee of Williams, under his application, took title to no property, rights, or claims of Williams, the insolvent, but such as he had at the date of his application. At that period Williams had no possible right or claim against the government of Mexico, which did not come into existence for several years afterwards, nor against the then existing government of Spain in Mexico, which Mina's expedition was designed to overthrow; and the only alleged or possible claim he (Williams) then had was against Mina, under Mina's contract with the Mexican Company; and this contract with Mina, as the state court has declared by its decision, was illegal, and created no right or claim in Gooding which could or did pass to his trustee under his said application in 1819. The decision of the state court, therefore, involved but two questions, the first of which was, whether said contract with Mina vested any rights in Williams, at the date of his application in 1819, which passed to his trustee; and the second, whether the treaty and award, allowing as against Mexico the claim of the Mexican Company, under its said contract with Mina, had any such operation or retrospect, as to that contract, as to validate it in Maryland as between the original parties, and to validate it ab initio, so as to vest in the trustee by retroactive rights and claims under that contract, which had no legal existence at the period of Williams's application. The first question the defendants in error will maintain, is conclusively established by the decision of the state court, and is not open to inquiry here, as it involves nothing but the decision of the Maryland court upon a Maryland contract, as to the rights created by it, and the transfer of those rights, in 1819, to the trustee of the insolvent. The second, and, as the defendants will maintain, the only possible question open here, will be as to the operation of the treaty and award. And, as the state court has not expressed any specific opinion as to the treaty, or any right or title set up or claimed under it, the jurisdiction can only be maintained, if at all, by establishing that such a right or title was involved in the decision of the question, and that the treaty did so retroact as to validate said contract, ab initio, and vest in the trustee of 1819 the rights given by that contract, which right, so vested in the trustee, the decision of the state court denied him. And the defendants in error will maintain that, even if there be any such right, title, or privilege specially set up or claimed under the treaty, as to give jurisdiction, which they deny, yet the treaty could not have, and was not intended to have, any such operation or retrospect. They will insist that the treaty and award under it had and could have no other effect than to establish the liability of Mexico to pay that claim under the treaty, and settled nothing but the validity of that claim against Mexico; and that, by the award made under it to Glenn and Perine, the trustees of the defendants, the defendants have the only right or title set up, claimed, or obtained under the treaty, which the plaintiff in error can controvert only by showing that they were entitled to the claim thus allowed to the defendants, and that the treaty and award settled no rights as between the claimants, but merely the obligation of Mexico to pay the claim. They will further insist that the question, whether the original contract between Mina and the Mexican Company gave Williams any rights which passed to his trustee in 1819, was a question of Maryland law upon a Maryland contract, upon which Mexico's subsequent recognition or agreement to pay that claim, as due by herself, could have no influence; that Mexico's subsequent agreement to pay the claim herself had no bearing upon the question, as to what were the rights of Williams in Maryland under the original contract between Mina and the Mexican Company; and that the express waiver by Mexico, or even by the Spanish government which she overthrew, or the objection of illegality as far as she was concerned, could not affect the question of the validity of the original contract, in Maryland and under the laws of Maryland, and, above all, could not retrospect so as to repeal the laws of Maryland, by validating that original contract, ab initio, and passing the rights under it to the trustee of 1819. And, as the result of the whole, therefore, the defendants in error will maintain, that the decision of the state court has conclusively established the original invalidity of the contract, and that the trustee took no rights under it; and that the treaty, if there be any question raised under it, gave the plaintiff in error no right, title, or privilege which can affect that decision, or was denied by the state court. Milne v. Huber, 3 McLean, 102; and authorities under 1st and 2d points.
5. The act of Assembly of 1841, ch. 309, does not impair the obligation of contracts. Saterlee v. Mathewson, 2 Pet., 414; Watson v. Mercer, 8 Id., 110.
Mr. Justice NELSON delivered the opinion of the court.

## Notes

This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).
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