covery can be had against a lunatic, upon a contract express or implied, unless for necessaries. Seaver vs. Phelps, supra; Fitzgerald vs. Reed, 9 Sm. & Marshall: Pearl vs. McDowell, 3 J. J. Marsh. 658; 2 Greenl. Ev. 369; Lincoln vs. Buckmaster, supra.

The rule in regard to instituting legal proceedings against a lunatic is much the same as that which obtains in the case of infants; and there would seem to be more reason for a strict enforcement of it in the former case than in the latter, since infants, long before they get out of their nonage, are entirely competent to select counsel, and conduct the defence of a suit.

This subject is very elaborately discussed by WOODBURY, J., in Lang vs. Whidden, 2 N. H. R. 435, where the authorities, prior to that date (1822), will be found very extensively quoted, and the subject very learnedly discussed, and satisfactorily disposed of by the court. It is here said the guardian must be notified, in all cases, or the judgment will be erroneous.

The same rule has been adopted in many of the American States. Aldridge vs. Montgomery, 9 Ind. R. 302; Snowden vs. Danbury, 11 Penn. St. R. 522; 2 Barb. Ch. R. 387; Wright's Appeal, 8 Barr 57; 6 B. Mon. R. 239. But if one who is a lunatic be arrested or imprisoned in a civil suit, he is not entitled to his release on that account. A guardian ad litem may be appointed, and the suit proceed. Bush vs. Pettibone, 4 Comst. R. 300; Aldrich vs. Williams, 12 Vt. R. 413.

There seems to be no good ground to question the decision in the principal case. The same rule has long been established in regard to judgments rendered against infants, without the appointment of guardians ad litem. 2 Saund. R. 212, n. 4; Castlemain vs. Moody, 4 B. & Ad. 90; see also Mason vs. Dennison, 15 Wendell 64; Wead vs. Marsh, 14 Vt. R. 77; Crockett vs. Drew, 5 Gray 399.

I. F. R.

In the Supreme Court of the State of New York, Oct. 22, 1862. THE PEOPLE ex rel. THE HANOVER BANK vs. THE COMMISSIONERS OF TAXES AND ASSESSMENTS OF THE CITY AND COUNTY OF NEW YORK.

[Before Ingraham, Barnard, and Clerke, Js.1]

1. By the second section of the Act of Congress, passed February 25, 1862, it is provided that “All stocks, bonds, and other securities of the United States, held by individuals, corporations, or associations within the United States, shall be exempt from taxation by or under State authority." The effect of this sec

1 We owe this case to the courtesy of INGRAHAM, P. J., for which he will accept our thanks.-EDS.

tion is to exempt from taxation, under the laws of this State, all stocks, bonds, and other securities issued by the United States after the passage of the act. 2. This Court is bound by the decision of the Court of Appeals, in the case of The People ex rel. The Bank of the Commonwealth, 23 N. Y. 192; (1 Am. Law Reg. N. S. 81), as to cases coming within its scope. By force of that decision, securities of a like nature, issued before the passage of the act in question, and owned by a resident of the State, are not exempt from taxation under State laws, if no unfriendly discrimination to the United States, as borrowers, is applied by the State law; and property in United States stock is subjected to no greater burdens than property in general.

3. Congress has no power, by retrospective legislation, to withdraw from State taxation stocks and other like securities, issued by the United States, already subject to such taxation, and so far as the Act of February 25, 1862, exempts, from State taxation, United States securities previously issued, it is extra constitutional and inoperative.

The relators, the Hanover Bank, having a capital of $1,000,000, were assessed at $908,119, the assessors having deducted from the capital the value of the real estate, and stocks in other corporations. The bank objected to this assessment, upon the ground that the bank owned stocks, bonds, and other securities of the United States to the amount of $896,560, and claimed to be entitled to have the amount reduced to $105,000. The Commissioners of Taxes and Assessments refused such application, and the case was brought to this Court on certiorari.

Charles Tracy, Esq., for relator.

H. H. Anderson and Greene C. Bronson, Esqs., for respondents. By the Court.

INGRAHAM, P. J.-So far as the questions involved in this case were discussed and decided by the Court of Appeals, in the case of The People ex rel. The Bank of the Commonwealth, 23 N. Y. Rep. 192, we do not feel at liberty to express any opinions at variance therewith. That case must be understood as deciding that stock of the United States held by a corporation or by individuals may be taxed under the laws of this State, where such taxation is general as applying to all personal property, and no unfriendly discrimination to the United States stock is applied by the State law,

or,

in other words, that where the taxation was general on the

personal property of an individual or corporation, property which if nominally taxed as stock of the United States could not be taxed, may be included in the general aggregate of property liable to taxation, and the tax thus be imposed.

It is conceded that property exempt from taxation by law must' be deducted from the aggregate valuation of personal property thus subject to assessment, and this principle was afterwards settled by the unanimous decision of the Court of Appeals in the People ex rel. Hoyt vs. The Commissioners of Taxes, 23 N. Y. Rep. 224, in which it was held that the personal property of an individual residing in this State, actually situated in another State or county, is not to be included in the assessment against him. And in the case first cited, DENIO, J., says: "It follows, therefore, from the very language of the statutes, that if the Bank of the Commonwealth has invested a part of its capital paid in, in a stock which is exempt from taxation, such portion is to be excepted from the assessment."

While, therefore, this decision is to be considered as controlling upon the question whether in assessing the aggregate value of the personal estate of an individual or corporation, stock of the United States should be included, still the question which has now been submitted to us formed no part of the matters upon which that Court passed when the subject was before them. A distinction was then taken between the exemption from taxation of these stocks under the provisions of the Constitution, which gave Congress power to borrow money on the credit of the United States, and such exemption if specially enacted by an Act of Congress. The learned Judge says, "It is the Constitution, alone which is to be looked to, for Congress has never passed any law on the subject," and the Court expressed no opinion on the question whether Congress could enact a law by which the lenders of money to the government should enjoy the advantages of exemption from State taxation in respect to such loans; but say, "In the absence of any such statute, and resting upon the general grant of power contained in the Constitution, we are of opinion that the claim to be exempt from taxation cannot be allowed to prevail."

VOL. XI.-3

Whatever, therefore, may be the individual opinions of the members of this Court on these questions decided by the Court of Appeals, we do not feel at liberty to re-examine them in this case, and the only difference which exists between that case and the present is as to the effect of the provision of the Act of Congress of the 25th February, 1862, which says: "All stocks, bonds, and other securities of the United States, held by individuals, corporations, or associations within the United States, shall be exempt from taxation by or under State authority."

Two questions arise in regard to this enactment

I. Whether if constitutional such a provision would exempt them under our laws.

And II. Whether Congress can pass such a law limiting and restricting the powers of the State in regard to taxation.

Upon the first point I think there can be little difficulty.

The Act of 1857 expressly excepts from the personal property to be valued and assessed all such part of it as shall have been exempted by law; and DENIO, J., says: "It would be the duty of the assessors to inquire whether any of this property into which the capital had been converted was exempted by law from taxation. The bank is, as a general rule, assessed and taxed for all its property of every kind, but there is an exception as to such part of it as the Constitution and laws of the Union and of the State have, upon special reasons of policy, declared shall be exempted."

There can be no difficulty under this decision, as well as under the statute, of coming to the conclusion that such deduction must be made if the Act of Congress directing the exemption of the United States stocks and bonds from taxation is valid.

The cases which at various times have been decided in the United States Court, H. McCullough vs. State of Maryland, 4 Wheaton 316; Weston vs. City of Charleston, 2 Peters 449; Osborn vs. The United States Bank, 9 Wheat. 738, and others which might be cited-all hold that special taxation against the stock, bonds, or incorporations under the United States laws, was forbidden by the power given to the general government under the constitutional powers conferred upon Congress in connection therewith. To this extent

I consider the decision of the Court of Appeals, before referred to, as going. DENIO, J., takes the distinction between assessing the United States stocks and bonds specifically, and including the value thereof in the valuation of a man's personal estate. He says, “An unfriendly act of legislation which should exclude the federal government from reverting to the money markets of a particular State for loans, though it might not seriously affect the exercise of the borrowing power elsewhere, would be so obviously hostile to the operations of the government that I am confident it could not be sustained." And again (p. 207), "If the federal stock can be taxed separately and specifically at any amount which a State Legislature or a municipality to which its power has been delegated shall see fit, the government, in seeking to obtain money on loan, may be effectually driven out of the markets of such State."

If it be conceded that the right to borrow money by the Congress of the United States, granted by the Constitution, prevents the States from laying a specific tax on such bonds and stocks to an extent that would interfere with the government in borrowing mo.. ney in such State, it seems to follow that the government must have the right to make such loans on such terms and limitations as they shall deem necessary to make such loans available; and that Congress, in authorizing such loans, is the person that must decide as to the conditions on which the loans may be taken. If the power to borrow involves the power to prevent the States from interfering with such loans by specific taxation, can there be any doubt that Congress may, for the sake of securing such loans, say to what extent, if any, the States may tax the same, and add to the terms on which the stock shall be issued, immunity from taxation throughout the country? If the States cannot impose a specific tax because it would impair the value, and thereby interfere with the power of borrowing, may not Congress say, that neither a specific or general tax shall be imposed by the States, in order to secure the success of the loan?

The power to borrow money and to issue stock is undoubtedly a sovereign power, and embraces within it all necessary powers to carry it effectively into exercise. It cannot be restrained as to