of

Statement of the Case.

any stock authorized by the laws of the State of New York for any loans made in its behalf by the comptroller or the commissioners of the canal fund, which office shall be continued and maintained in the said bank during the pleasure of the commissioners of the canal fund of the said State.

"For rendering the services contemplated by this agreement the party of the first part will pay to the said party of the second part, so long as the said transfer office shall be continued in the said bank, a compensation at the rate of twelve hundred and fifty dollars annually, and to be paid quarterly, in lieu of all expenses and charges of every description, except the expense of ledgers and transfer books.

"In consideration of the aforesaid agreements the said party of the second part hereby agree and engage to maintain an office in their said bank for the issue and transfer of certificates of stock for any loan made in behalf of the people of the said State by the comptroller or by the commissioners of the canal fund, which certificates shall be issued and which transfers shall be made as herein before declared; and for all transfers made and certificates issued contrary to the provisions of this agreement hereinbefore contained, the said party of the second part shall be immediately liable to the said party of the first part for the nominal amount of all certificates so transferred or issued.

"And the said party of the second part further agree that they will pay and redeem such certificates of stock issued under the direction of the commissioners of the canal fund in behalf of the State of New York, as shall from time to time be directed by the said commissioners, from the funds to be provided by them, at such rates as they shall prescribe; and will also pay and redeem such certificates of stock issued under the directions of the comptroller, as he shall direct, out of funds to be provided by him, at such rates as he shall prescribe, and in such payments will conform to such regulations as may be prescribed by the said commissioners or the comptroller in regard to such certificates respectively, and will render accounts of such payments and vouchers for the same as shall be prescribed in such regulations.

Statement of the Case.

"And the said party of the second part further agree that they will from time to time pay the interest on all loans made by the commissioners of the canal fund in behalf of the State of New York, out of funds to be provided for that purpose, on such vouchers and proofs as the said commissioners shall prescribe, and will render accounts of such payments, with such vouchers, within such time, and in such form as they shall direct, and in like manner will pay the interest on loans made by the comptroller from funds to be provided by him, at such times and on such vouchers as he shall prescribe, and will render an account to him of such payments, with the vouchers therefor, within such time and in such form as he shall direct."

The provisions of the statute of New York, referred to in paragraph 2 of the agreed statement of facts as Exhibit B, Title 4, chapter 8, part 1, of the Revised Statutes of the State, were as follows:

"87. The treasurer shall deposit all moneys that shall come to his hands on account of this State, except such as belong to the canal fund, within three days after receiving the same, in such bank or banks in the city of Albany, as in the opinion of the comptroller and treasurer, shall be secure, and pay the highest rate of interest to the State for such deposit.

66

"§ 8. All moneys directed by law to be deposited in the Manhattan bank, in the city of New York, to the credit of the treasurer, shall remain in said bank, subject to be drawn for as the same may be required.

"§ 9. The comptroller may transfer the deposits in the Manhattan bank from time to time to the bank or banks in the city of Albany, in which the moneys belonging to this State shall be deposited pursuant to the foregoing seventh section of this Title, so often as it will be for the interest of the State to transfer such deposits; but the comptroller may continue such deposits in the Manhattan bank, if the said bank shall pay a rate of interest to the State for such deposits, equal to that paid by the bank or banks in Albany, in which the state deposits shall be made.

"§ 10. The moneys so deposited shall be placed to the

Argument for Plaintiff in Error.

account of the treasurer; and he shall keep a bank book, in which shall be entered his account of deposits in, and moneys drawn from, the banks in which such deposits shall be made.”

At the trial, the foregoing being all the evidence on both sides, the court directed a verdict for the defendant, to which direction the plaintiff excepted. The verdict having been rendered, a judgment was entered thereon against the plaintiff, and for costs. The plaintiff sued out a writ of error from this court.

Mr. Augustus S. Hutchins and Mr. John W. Butterfield for plaintiff in error.

I. The contract, under the provisions of which the money in question was sent by the state treasurer to the bank, and the manner in which the money was credited and disbursed by the bank, show plainly that the ordinary relation of banker and depositor never arose, and that Congress could never have contemplated the inclusion of such moneys for purposes of taxation under the general title of "deposits" as used in the act. On the contrary, it seems that the bank, as to the funds in dispute, was merely the salaried disbursing agent of the State and a trustee for the State's creditors. Mechanics' Bank v. Merchants' Bank, 6 Met. (Mass.) 13; Libby v. Hopkins, 44 U. S. 303; Sharpless v. Welsh, 4 Dall. 279; Locomotive Works v. Kelley, 88 N. Y. 234; People v. City Bank, 96 N. Y. 32; National Bank v. Insurance Co., 104 U. S. 54; Van Alen v. American Bank, 52 N. Y. 1; Pennell v. Deffell, 4 De G., M. & G. 372; Frith v. Cartlandt, 2 Hem. & Mill. 417; Martin v. Funk, 75 N. Y. 134.

II. In construing a statute, it is always permissible to consider the motives which actuated the law makers and the object for which the act was passed.

It seems quite inconceivable that Congress intended to charge with taxation such deposits as those in question, which were sent to the bank, not to remain indefinitely and to be loaned out at usury by the bank, for its own profit, but to be immediately paid out to certain specified creditors of the

Counsel for Defendant in Error.

State. The authorities in this, as, indeed, in all courts, have held, from time immemorial, that the intent of the law makers must be looked for and followed in the construction of the statute, though it limit or even contradict the literal wording of the statute, and that if the language will admit of it, a construction must be given conformable to reason, justice and the public convenience and welfare. Brewer v. Blougher, 14 Pet. 178; Minnesota v. Barber, 136 U. S. 313; Maillard v. Lawrence, 16 How. 251; Chase v. N. Y. Central Railroad, 26 N. Y. 523; Beebe v. Griffing, 14 N. Y. (4 Kernan) 235; Donaldson v. Wood, 22 Wend. 395; United States v. Fisher, 2 Cranch, 358; McKay v. Detroit Plank Road Co., 2 Michigan, 138; King v. Hodnett, 1 T. R. 9C; Edwards v. Dick, 4 B. & Ald. 212; Murray v. Baker, 3 Wheat. 541; Pearse v. Morris, 2 Ad. & El. 84; Green v. Kemp, 13 Mass. 515; S. C. 7 Am. Dec. 169; Commonwealth v. Weiher, 3 Met. 445; Jackson v. Collins, 3 Cowen, 89; Margate Pier Co. v. Hannan, 3 B. & Ald. 266; Atkinson v. Fell, 5 M. & S. 240.

III. The money so paid by plaintiff in error, and the recovery of which is now sought, was the proceeds of a tax collected by the agent of the government of the United States, and levied upon all the moneys then in the bank, including money of the State of New York then in the possession of an agent of the State of New York, and held for immediate disbursement to the State's creditors by such agent, who was receiving a salary to effect such disbursement, and such tax was, to that extent, in effect a tax upon the revenues of the State in the hands of its disbursing agent. Such moneys could not be constitutionally included in the term "deposits" as used in the act of 1863. Collector v. Day, 11 Wall. 113; McCulloch v. Maryland, 4 Wheat. 316; People v. Commissioners of Taxes, 90 N. Y. 63; Bank v. New York, 2 Black, 620; United States v. Railroad Co., 17 Wall. 322; National Bank v. United States, 101 U. S. 1; Weston v. Charleston, 2 Pet. 249; Dobbins v. Commissioners of Erie County, 16 Pet. 435; Veazio Bank v. Fenno, 8 Wall. 533.

Mr. Assistant Attorney General Maury for defendant in error.

Opinion of the Court.

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

The statute of the United States under which the tax was assessed was & 110 of the act of June 30, 1864, c. 173, 13 Stat. 277, afterwards embodied in § 3408 of the Revised Statutes, which latter section reads as follows: "There shall be levied, collected and paid, as hereinafter provided: First. A tax of one twenty-fourth of one per centum each month upon the average amount of the deposits of money, subject to payment by check or draft, or represented by certificates of deposit or otherwise, whether payable on demand or at some future day, with any person, bank, association, company or corporation, engaged in the business of banking." Although this tax on deposits in banks was repealed by the act of Congress of March 3, 1883, c. 121, .22 Stat. 488, yet the latter act expressly excepted "such taxes as are now due and payable."

It was contended for the plaintiff (1) that the contract before set forth, made July 13, 1840, under the provisions of which the money in question was sent by the treasurer of the State. to the plaintiff, and the manner in which that money was credited and disbursed by the plaintiff, show that the ordinary relation of banker and depositor never arose; that Congress did not contemplate the including of such money for purposes of taxation, under the general title of "deposits" a used in 3408; and that the bank, as to the funds in question, was merely the salaried disbursing agent of the State and a trustee for the creditors of the State; (2) that the money paid by the plaintiff, which it now seeks to recover, was the proceeds of a tax collected by the agent of the United States and levied upon all the money in the hands of the plaintiff, including money of the State of New York, then in the possession of an agent of that State and held for immediate disbursement by that agent to the creditors of the State, such agent receiving a salary to effect such disbursement; that such tax was, to that extent, a tax upon the revenues of the State in the hands of its disbursing agent; and that such money could not