Evans-Snider-Buel Co. v. McFadden

SANBORN, Circuit Judge

(dissenting). The validity of the act of February 3, 1897, as construed by the majority of this court, in. view of the basic principles of the social compact and of the fifth amendment to the constitution, which declares that “no person shall be deprived of life, liberty or property without due process of law,” is best tested by a candid look at its legal effect upon the property of the parties to this action. It is conceded by the opinion of the majority, and it was settled by the statutes then in force in the Indian Territory and by the uniform decisions of the supreme court of Arkansas interpreting those statutes from 1843 to 1891 (Main v. Alexander, 9 Ark. 112, 117; Hannah v. Carrington, 18 Ark. 85, 105; Jacoway v. Gault, 20 Ark. 190, 193; Haskell v. Sevier, 25 Ark. 152, 158; Ford v. Burks, 37 Ark. 91, 94; Dodd v. Parker, 40 Ark. 536, 540; Watson v. Lumber Co., 49 Ark. 83, 87, 4 S. W. 62; Cross v. Fombey, 54 Ark. 179, 184, 15 S. W. 461), that on the morning of February 3, 1897, the defendants in error had a first and specific lien impervious to the attacks of the mortgagee, the Evans-SniderBuel Company, either at law or in equity, for the amount of the judgment which they had obtained in their attachment suit against Blocker, — $55,875.71,—upon the cattle that had been seized under the attachment, which were found to be worth $75,000. When that day closed,' if the conclusion of the majority is right in this case, the congress of the United States had, by the act of February 3, 1897, devested the defendants in error of all beneficial interest in the cattle or in the lien which they held upon them, and had granted to the Evans-Snider-Buel Company a first lien for $130,000 upon these cattle, and had thereby deprived the defendants in error of all real interest in the stock. In other words, before the* act of February 3, 1897, was approved, the defendants in error had a first lien upon the cattle which was worth $55,875.71, and the mortgagee had ah inferior lien which was worth only the difference' between the amount of this first lien and $75,000, or $19,124.29. The instant that act-was approved, the mortgagee had a first lien on the cattle for $130,000-, which was worth $75,000, and the defendants in error had nothing. The act of congress had the effect to transfer ■instantly property of the value of $55',875.71 from the defendants in error to the plaintiff in error the Evans-Snider-Buel Company. It is not ..pretended that this was accomplished by any process of law, due or undue. It was done, if done at all, by the arbitrary act of the congress of the United States, without notice, trial, or hearing. In my opinion, an act of' congress or of a state legislature which has such an effect not only violates the fifth amendment of the constitution, but is beyond the powers of the legislative department of a republican government. Calder v. Bull, 3 Dall. 383, 388, 1 L. Ed. 648; Tyrrell v. Rountree, 7 Pet. 463, 468, 8 L. Ed. 749; Gunn v. Barry, 15 Wall. 610, 622, 21 L. Ed. 212; Fletcher v. Peck, 6 Cranch, 87, 135, 3 L. Ed. 162; Tillotson v. Millard, 7 Minn. 513 (Gil. 419); Grinder v. Nelson, 9 Gill, 299, 307; Regents v. Williamson, 9 Gill & J. 365, 408; Bank v. Ballou (Va.) 32 S. E. 481, 483; Wade, Retro. Laws, §§ 159, 191; Gilmab v. Tucker (N. Y. App.) 28 N. E. 1040; Ratcliffe v. Anderson, 31 Grat. 105; Murphy v. Gaskins’ Adm’r, *30528 Grat. 207, 222; Alter’s Appeal, 67 Pa. St. 341; McCarty v. Hoffman, 23 Pa. St. 507; Greenough v. Greenough, 11 Pa. St. 489; Wap. Attachm. (2d Ed.) §§ 17, 736; 1 Shinn, Attachm. §§ 322, 452; Frellson v. Green, 19 Ark. 376; Bergman v. Sells, 39 Ark. 97, 101; Cole v. Cunningham, 133 U. S. 107, 116, 10 Sup. Gt. 269, 33 L. Ed. 538; Richardson v. Adler, 46 Ark. 49; Wade, Retro. Laws, §§ 171, 173. In the discussion of the question at issue it must he borne in mind that it was not a mere judgment against the person, or the right to enforce such a judgment, or a mere general lieu to secure it, of which the defendants were here deprived. But it was a specific and absolute lien, fixed by the judgment of (.he court upon personal property which had been reduced to the possession of the officer of that court, and which Avas property owned by the defendants in error, and worth more than $55,000.

In Calder v. Bull, 3 Dall. 388, 1 L. Ed. 648, Mr. Justice Chase said:

"There are certain A'ital principles in our free republican governments which will determine and overrule an apparent and flagrant abuse of legislatiA'e poAver: as to authorize manifest injustice by positiA-e law, or to take away that security for personal liberty, or private property, for the protection AVhereof the goA'ernment was established. * * A law that punishes a citizen for an innocent action, or, in other words, for an act which, AVhen done, was in Adulation of no existing law-; a law that destroys or impairs the lawful private contracts of citizens; a laAv that makes a man a judge in his own cause: or a larv that takes property from A. and gives it to B., — it is against all reason and justice for a people to intrust a legislature Avith such pov-ers; and therefore it cannot be presumed that they ha\-e done it.”

In Tyrrell v. Rountree, 7 Pet. 466, 8 L. Ed. 749, after a judgment had been rendered in an attachment suit, and a writ of venditioni exponas issued to sell land which had been attached, the county was divided by a legislative act, and the claim was made that this devested the lien upon the property in the new county, so that a sale thereof could not be made. Chief Justice Marshall said:

“The counsel for the plaintiffs in error has argued the cause as if the process under which the sale was made had been the usual execution awarded on a judgment rendered against a person brought into court by regular process. ‘Without inquiring whether his objections to the charge would have been Avell founded had that been the character of the case, it is sufficient to observe that in the actual cause the land itself Avas attached. Not having been released, it remained in the custody of the officer, subject to the judgment of the court. An interest Avas vested in him for the purposes of that judgment. The judgment did not create a general lien on it, but was a specific appropriation of the property itself to the satisfaction of that particular judgment. The process Avhich issued did not direct the officer to tevy it on the property of the defendants, but to sell that specific property which was already in his possession by virtue of the attachment, and was already condemned by the judgment of the competent tribunal. The subsequent diA-ision o£ the county could not deA-est. this vested interest, nor deprive the officer of the power to finish a process which was rightly begun.”

In Gunn v. Barry, 15 Wall. 610, 622, 21 L. Ed. 212, a case was presented in which a creditor had obtained a judgment against a defendant, which was a lien upon a large portion of his land, and before that judgment was enforced by execution sale the state of Georgia adopted a constitution, At-hich, by its terms, exempted from *306execution sale all the land of the defendant in the judgment. Mr. Justice Swayne, in delivering the opinion of the supreme court, said of this constitution:

“The effect of the act in question, under the circumstances of this judgment, does not, indeed, merely impair, it annihilates, the remedy. There is none left. But the act reaches still further. It withdraws the land from the lien of the judgment, and thus destroys a vested right of property which the creditor had acquired in the pursuit of the remedy to which he was entitled by the law as it stood when the judgment was recovered. It is, in effect, taking one person’s property, and giving it to another, without compensation. This is contrary to reason and justice, and to the fundamental principles of the social compact.”

No further authority would seem to be required to establish the propositions that the specific lien upon the cattle which the defendants in error had perfected by their judgment against Blocker was a “vested right of property,” and that its transfer from them to the mortgagee was “taking one person’s property, and giving it to another, without compensation.” If, however, other authority is desired it will be found in the decisions to which reference has been made above.

A' careful perusal of the authorities referred to in the opinion of the majority discloses no decision of the supreme court, and no persuasive opinion of any court, which sustains the proposition that the legislative department of our government may by an arbitrary act deprive one of a specific and perfected lien upon property which is worth more than $50,000, and vest it in another without compensation. The decisions of the supreme court cited by the majority, to the effect that interest on a judgment is a penalty for its nonpayment, and that from the time of the passage of a law it may be reduced by legislative enactment, even upon judgments rendered before the act passed (Morley v. Railway Co., 146 U. S. 162, 13 Sup. Ct. 54, 36 L. Ed. 925); that the remedy for the enforcement of a personal judgment (which created no lien) against a municipality for damages resulting from mob violence may be lawfully taken away because the collection of such damages is a mere matter of public policy, while the removal of the remedies for the collection of an ordinary judgment for tort by legislative act would be unconstitutional (Louisiana v. Mayor, etc., of City of New Orleans, 109 U. S. 285, 291, 3 Sup. Ct. 211, 27 L. Ed. 936); that the removal of the bar of the statute of limitations against a personal debt does not impair any contract of the debtor, or deprive him of any property which he possessed, while the removal of the bar of such a statute against'the assertion of a claim to either personal or real property is a violation of the fifth amendment to the constitution, and a taking of property without due process of law (Campbell v. Holt, 115 U. S. 620, 623, 628, 6 Sup. Ct. 209, 29 L. Ed. 483); that a debtor has no vested right to plead and recover the penalty prescribed by a statute for usury, and that a law repealing such a statute may well apply to prior contracts (Ewell v. Daggs, 108 U. S. 143, 150, 2 Sup. Ct. 408, 27 L. Ed, 682), — seem to me to have no tendency to show that the supreme court has ever sustained or intimated that it would permit .the bald taking of $50,000 worth of private prop*307erty irom one person to give it to another without compensation. It would be unprofitable to review the cases cited from the state courts in the opinion of the majority, because the decisions of the supreme court to which reference has been made are conclusive upon this question, and render the consideration of other authorities unnecessary. It may, however, be remarked in passing that the decision in Butler v. Palmer, 1 Hill, 324, that, after the sale of a judgment debtor’s land under execution, a statute may be lawfully passed curtailing the period of redemption, is by no means the settled law of the land, and that the counter proposition is well sustained by reason and authority. Willis v. Jelineck, 27 Minn. 18, 6 N. W. 373; O’Brien v. Krenz, 36 Minn. 136, 30 N. W. 458; Heyward v. Judd, 4 Minn. 483 (Gil. 375); Hillebert v. Porter, 28 Minn. 496, 11 N. W. 84, and the cases there cited. Attention may also be called to the fact that the decision of the supreme court of Arkansas in Green v. Abraham, 43 Ark. 420, 425, is inapplicable to the questions presented in this case, because it rests upon the proposition that the mere levy of an execution upon personal property under a personal judgment which creates no lien vests no right of property in the judgment debtor, and therefore a curative act validating a mortgage upon the property seized did not constitute the taking Of private properly for private use. The decision rests upon the proposition that the levy of the execution vested no right of property. The later decisions of that court, however, conclusively hold that the entry of a judgment against the debtor in an attachment suit completes and perfects the lien of the attachment, and vests a right of property in the judgment creditor. Richardson v. Adler, 46 Ark. 49; Frellson v. Green, 19 Ark. 376; Bergman v. Sells, 39 Ark. 97, 101.

The argument that this specific lien upon the cattle evidenced by the attachment and judgment might be stricken down by an arbitrary act of congress because there are authorities which hold that the repeal of a statute allowing attachments subsequent to the levy of a writ and before judgment against the debtor lawfully destroys the inchoate lien of the attachment is a non sequitur, is supported by no authority, and is contrary to all the decisions upon the question which have come under my notice. The lien of an attachment-is inchoate; and conditional upon the entry of a judgment against the debtor until that judgment is entered, but perfect, absolute, and unassailable after such a judgment, and a judgment sustaining the attachment, have been rendered. There is respectable authority upon each side of the question whether or not a legislative act impairing or destroying the inchoate lien of an attachment before judgment destroys a vested right of property within the meaning of the fifth amendment to the constitution. Hall v. Stephens, 65 Mo. 670, 681; Hannahs v. Felt, 15 Iowa, 141; Day v. Madden, 9 Colo. App. 464, 48 Pac. 1053; Mulnix v. Spratlin, 10 Colo. App. 390, 50 Pac. 1078. It is useless to consider or discuss that question here, for the lien of the defendants in error is not of that character. On .'January 29, 1897, — three days before the act of February 3d was passed, — -they obtained a judgment against the defendant Blocker not only that'the latter was indebted to them in the sum of $55,875.71, but also that their attachment of *308these cattle be sustained. The amount of the claim of the defendants in error had been adjudicated, their lien by attachment upon the cattle, which were then in the custody of the court, and their right to the sale of these cattle and to the application of their proceeds to the payment of their judgment, had been adjudged to be perfect and absolute by a competent court having jurisdiction of their case three days before the act of February 3, 1897, was passed. The property ■of the defendants in error in the cattle was strictly analogous to and as great as the property of a mortgagee in mortgaged real estate after a decree of foreclosure of his mortgage and of sale of the land to satisfy his debt has been rendered against the mortgagor.

May the legislative department of the government lawfully deprive such a mortgagor of his lien, his property, and transfer it to a stranger, or to the holder of an inferior lien, by its mere fiat? If not, then congress could not lawfully deprive these defendants in error of their lien, their vested right, their property in these cattle, and transfer it to the Evans-Snider-Buel Company, by the act of February 3, 1897. The lien which they acquired by their attachment and their judgment was impervious to attack, either at law or in equity. It was absolute, perfect, enforceable, assignable, and salable. It was a coinplete and vested right. It was property worth $55,875.71, and was as completely vested in the defendants, in error, and as perfectly protected by the law of the land, as acts of parties, laws, and decisions can vest or protect any property. All the authorities are that, while the lien of an attachment is inchoate and contingent until a judgment against the debtor is rendered, yet, after that judgment has been rendered, the lien of the attachment is merged in the judgment, which relates back to the date of the attachment, and evidences a perfected and absolute right to apply the attached property to the payment of the judgment; and that this is a vested right of property, as sacred and as valuable as it is possible to secure under the laws of our land. Cole v. Cunningham, 133 U. S. 107, 116, 10 Sup. Ct. 269, 33 L. Ed. 538; Bank v. Reithmann, 79 Fed. 582, 583, 25 C. C. A. 101, 102, 49 U. S. App. 144, 146; Richardson v. Adler, 46 Ark. 43, 49; Wap. Attachm. (2d Ed.) §§ 17, 736; 1 Shinn, Attachm. §§ 452, 322; Frellson v. Green, 19 Ark. 376; Bergman v. Sells, 39 Ark. 97, 101; 1 Black, Judgm. 298; 1 Freem. Judgm. § 90; Tillotson v. Millard, 7 Minn. 513 (Gil. 419); Lyon v. Sanford, 5 Conn. 545, 547, 549; Wade, Retro. Laws, §§ 171, 173.

In Bank v. Reithmann, 79 Fed. 582, 583, 25 C. C. A. 101, 102, 49 U. S. App. 144, 146, this court said:

“An attachment is an ancillary remedy provided by statute, by means of -which a contingent lien is obtained and impressed upon property of a defendant, which becomes vested and perfected on entry of judgment and levy of execution.”

In Richardson v. Adler, 46 Ark. 49, the supreme court of that state said:

“The lien relates back to the levy of the attachment, creating from that moment an inchoate charge, which was perfected by the rendition of judgment, and which could not be devested by any change in the status of the parties.”

*309Mr. Shinn, in his work on Attachment, at section 572, declares that:

"A judgment sustaining the attachment and subjecting the property to execution perfects the lien created by the attachment, or, rather, it takes the place of such lien, and relates back to the time of the levy, and takes priority over all subsequent attachments, liens, or conveyances.”

Mr. Wapies, in his work on Attachment, at section 17, says:

“By the law of relation an attachment judgment retro acts to the time the property was first attached; to the time it was first subjected to garnishment; so that no incumbrances put upon it by its owner since that time can have higher rank than the attaching creditor’s li'en. Such retroaction makes the lien jjoi-fect from its first inception, as though ereated by the contract of the parlies; as though it were a mortgage lien voluntarily put upon the property by the defendant himself.”

There is no conflict in the authorities upon this question. The principles which have been adverted to are indisputable, and it follows from them inevitably that, if a vested right or a vested interest in property is, as the majority are willing to concede, “some right or interest in property that has become fixed or established, and is no longer open to doubt or controversy,” then the defendants in error had such a right and interest in the cattle in the custody of the court on January 29, 1897, after their judgments against Blocker had been rendered, and until the act of February 3, 1897, was approved.

The suggestion of the majority that the judgment against Blocker did not evidence a vested right in the cattle in the defendants in error as against the Evans-Snider-Buel Company does not seem to be founded in fact, because, while that judgment did not estop the company from claiming the cattle from the defendants in error, and from litigating their claim, it did vest in the defendants in error an established lien and interest in the cattle superior to that of the Evans-Snider-Buel Company, which was no longer open to doubt or controversy in the courts or under the law of the land. The Evans-Snider-Buel Company was unable to doubt or to controvert it by any proceeding at law or in equity. The only way which they found to open this vested right and interest to doubt or to controversy was to secure this arbitrary act of congress boldly taking it from the defendants in error and transferring it to this mortgagee. If the suggestion of the majority was intended to be that this act of congress does not violate1 the constitution because there was no adjudication of a court which estopped this mortgagee from claiming the property of these defendants and litigating its unfounded claim, that suggestion proves too much, because it would establish the proposition that congress could lawfully take this property from the defendants in error, and give it to any one of the inhabitants of the United States except Blocker, and the still broader proposition that congress may lawfully deprive any man of his property, provided only that it does not transfer it to some party who has been estopped from litigating an unfounded claim against it by the judgment of some court. Judgments in favor of the owners and against all the world are not indispensable to the existence of vested rights of property, and the fact *310that the defendants in error had no judgment against the Evans-Snider-Buel Company did not detract from the existence or the inviolability of their vested property in these cattle, since their right to them was established, and was impervious to the attacks of the mortgagee under the law of the land;

Nor does the argument that this act of congress, which takes from the defendants in error a vested right of property worth more than $55,000, and gives it to the Evans-Snider-Buel Company, should be held to be no violation of the prohibition of the constitution because “it was morally right, and in accordance with justice and fair dealing,” seem persuasive to me. • The moral right or wrong of an act of congress which takes the-property of A, and transfers it to B, is not, in my opinion, the true, nor is it a safe, test of the violation of the fifth amendment to the constitution. A fatal objection to such a test is that the standard of moral right or wrong in the minds of men is variant. An act taking some of the property of a bad man and giving it to a good man, one taking part of the property of a rich man and giving it to a poor man, might be thought to be morally right, and in accordance with justice and fair dealing, by some, while it would be thought unjust and morally wrong by others. This very case illustrates the objection to this rule. To the majority of this court it seems to be morally right, and in accordance with justice and fair dealing, to take from these judgment creditors an established lien upon property which they had acquired in strict accord with the law of the land to secure a just debt, and which was worth more than $55,000, and to transfer this right of property to a mortgagee which had taken mortgages that under that law were fraudulent and void as against these judgment creditors; while to the minority this act seems to have been morally wrong, and subversive of the basic principles of a government established to protect the rights of person and of property. To me the fraudulent mortgagee seems to have no equitable or moral right to the cattle in question superior to that of the holder of the lawful lien. There was certainly nothing in the consideration or purpose of the loan made by the mortgagee to give it a superior equity over that of the judgment creditors. One has no higher right to the repayment of money loaned to enable a debtor to purchase cattle than he has to the repayment of money loaned to enable: him to buy horses, or land, or bread. The consideration and purpose of the debt of Blocker to the defendants in error does not appear in this record, but the presumption is that it was a valuable consideration, and a worthy purpose, for the debt is evidenced by the judgment of a competent court of the state of Texas rendered in 1887. These defendants in error had waited for the payment of their debt more than 10 years when they acquired their lien upon these cattle, while the Evans-Snider-Buel Company had made its loan within a year preceding that date. So far, then, as the consideration and purpose of these two debts are concerned, those of the defendants in error must be deemed to be as meritorious as those of the mortgagee, and, as the defendants in error had waited more than 10 years for their money, while the mortgagee had not waited a year, certainly it was not unjust or inequitable for them to *311secure the payment of their debt first. Nor is it perceived that there is anything in the character and the acquisition of the liens of these parties which gave to the mortgagee any higher right or superior equity to the payment of its debt over those which the judgment creditors held. The judgment creditors, in violation of no law or public policy, hut in strict accord with the statutes and the decisions of the courts interpreting them, established by the judgment of a competent court a first and unassailable lien upon the cattle to secure their debt. Tbe Evans-Snider-Buel Company took mortgages upon the cattle unaccompanied with any change of possession, which were, under the common law, prima facie fraudulent and void as against the defendants in error (Pyeatt v. Powell, 51 Fed. 551, 2 C. C. A. 371, 10 U. S. App. 200), and which, under the statutes in the Indian Territory and under the uniform interpretation of them for 48 years by the courts of Arkansas which came to the Indian territory as a part of those statutes, were conclusively fraudulent and void as against the defendants in error and as against all creditors of the mortgagor, although the latter had actual notice of their existence. Main v. Alexander, 9 Ark. 112, 117; Jacoway v. Gault, 20 Ark. 199, 193; Hannah v. Carrington, 18 Ark. 85, 105; Dodd v. Parker, 40 Ark. 540; Watson v. Lumber Co., 49 Ark. 83, 4 S. W. 62; Cross v. Fombey, 54 Ark. 179, 184, 15 S. W. 458. Now, has a creditor who has procured mortgage liens from his debtor which are fraudulent and void as against other creditors a moral right to the mortgaged property so much higher than that of judgment creditors who have established a valid and superior lien upon it of the value of $55,000 in accordance with the law of the land that a court ought to sustain an arbitrary act of the legislative department of the government which takes this $55,000 worth of property from the lawful lienholder without compensation, and gives it to the fraudulent mortgagee, in the teeth of the fifth amendment to the constitution, which declares that “no person shall he deprived of life, liberty or property without due process of law”? I think this question should be answered in the negative, and, whether or not this should be the answer, it seems to me that the constitutionality of an act of congress which deprives men of their property without any process of law is not to he determined by a consideration of the moral right or wrong of the act or of the equities of those who lose and those who gain by the fiat. Constitutions and laws are enacted to declare and command the right and to forbid the wrong. Any theory that their violation may be permitted, or excused, or overlooked because in the varying opinions of any man or set of men that violation was morally right or in accordance with justice and fair dealing is subversive of the fundamental principles of government and ought not to be sustained. The adoption of such a theory would be, in effect, to add to the inhibition of the constitution an exception which it does not contain, so that it would read: “No person shall he deprived of life, liberty or property without due process of law except in. cases in which it is morally right and in accordance with justice and fair dealing to do so.” When the people adopted the constitution, they determined that it was morally wrong to deprive any person of his property without due process of law, *312under any circumstances. They ingrafted no exception upon this prohibition, and it is not the province of the courts to do so. The inhibition is clear, imperative, and without exception. It prohibits the deprivation of any man of his property without due process of law. The act of February 3, 1897, as it has been construed by the majority of the court, did, in my opinion, deprive the defendants in error of their property to the amount of more than $55,000, and was, therefore, to that extent unconstitutional and void.

For the reasons which have now been stated, — perhaps too much at length, — I am unable to concur in the opinion and conclusion of the majority in this case. I agree with the unanimous opinion of the court of appeals of the Indian Territory in which Judge Clayton has so logically, forcibly, and, to my mind, convincingly, presented the reasons why the act of February 3,1897, had no effect upon the rights of the parties in this action, and why the judgment lien of the defendants in error was superior to the claims of the fraudulent mortgagee. McFadden v. Blocker (Ind. T.) 48 S. W. 1043, 1046-1053. The true construction of the act of congress probably is, as the court of appeals of the Indian Territory held, that it merely validated mortgages made by nonresidents from the date of the p'assage of the act, and had no retroactive effect. 48 S. W. 1048, 1053; Suth. St. Const. § 463; Chew Heong v. U. S., 112 U. S. 536, 539, 5 Sup. Ct. 255, 28 L. Ed. 770; Summer v. Mitchell (Fla.) 10 South. 562. But, if this is not the proper construction, the act falls under the ban of the fifth amendment to the constitution, and is violative of the fundamental principles of republican government; and in either event it was ineffectual to take away the established lien of the defendants in error, and to transfer their property to the mortgagee. For these reasons, the judgment below should, in my opinion, be affirmed.