The United States have, accordingly, a preference as creditors, to the extent above declared, in four cases, viz: (1.) In

Domini Regis et subditi insimul concurrunt jus regis præferri debet. (9 Co. 120, b.) The sheriff had the legal custody of the goods, and a special property in them by virtue of the seizure, for the purpose of protection and sale; but until the sale, which was the dividing line as to the ownership of the goods, the absolute property of the debtor was not altered or divested. The priority of the government claims in this country is not carried to that extent, according to the opinion of Judge Washington, in Thelusson v. Smith; but it is to be observed, that the observation of Judge Washington was a mere dictum, and not a turning-point in the case. The same remark applies to what was said by the judge who delivered the opinion of the court in Conard v. The Atlantic Insurance Company; for the dictum was quoted in the course of the opinion incidentally, and without any criticism upon it, or particular attention to it. In Hoke v. Henderson, (3 Dev. N. C. Rep. 17,) Judge Ruffin considered the prerogative of the sovereign as to priority, equally applicable here as in England, and that it went to the extent claimed in the above case of Giles v. Grover. On the other hand, in Wilcocks v. Waln, 10 Serg. & Raw. 380, and in U. States v. Mechanics' Bank, Gilpin, 51, it was held, that the priority of the U. States gave no lien on property seized under a fieri facias, when the lien accrued, for the debtor was divested of the property. A very contested question has been raised and discussed in the courts in this country, on the conflicting claims of a judgment or attaching creditor under state laws, and the assignee under the bankrupt law of the United States. It was declared and adjudged by Mr. Justice Story, in the Circuit Court of the United States, in Massachusetts, and by Mr. Justice Ware, in the District Court of Maine, that an attachment under a state law was not an absolute lien, but a contingent one, dependent upon a subsequent judgment in the attaching suit; and that a bankrupt discharged upon a petition in bankruptcy, filed after the attachment and during the process of such suit, would be a bar to the recovery of any judgment thereon, and that the lien created by the attachment must give way and becomes avoided, and the debt also, by the subsequent decree and discharge in bankruptcy. Ex parte Foster, 2 Story's R. 131. In the Matter of Cook, 2 Story's R. 376. In the Matter of Bellows & Peck, 3 Story's R. 428. Smith v. Gordon, 6 Law Reporter, 313. Everett v. Stone, 3 Story's R. 447. The courts of the United States, and several of the state courts, maintain a different doctrine. The doctrine is, that a creditor, by his suit in equity, commonly called a creditor's bill, on his unsatisfied judgment, thereby acquires an equitable lien, and which operates as an attachment of property, and creates a right to priority of payment as against the assignee of a bankrupt, under a petition in bankruptcy subsequently made. That such a lien was not divested by a decree in bankruptcy, upon a petition filed subsequent to the commencement of a chancery suit, or the levy of the attachment. That the assignee in such a case takes the debtor's property subject to the creditor's lien, even independent of the proviso in the bankrupt act, and upon general principles applicable to insolvency and bankruptcy in this country and in England. That the assignee of the bankrupt or insolvent takes only such rights, and subject to such equities as belonged to the bankrupt himself at the time of the bankruptcy. That the judgment creditor had also a lien, upon the true construction of the proviso in the 2d section of the bankrupt law, paramount to the claim of the assignee, and as strong upon this proviso as upon general principles of law, for the word securities reaches all

the case of the death of the debtor without sufficient assets; (2.) bankruptcy or legal insolvency, manifested by some act pursuant to law; (3.) a voluntary assignment by the insolvent of all his property to pay his debts; (4.) in the case of an absent, concealed, or absconding debtor, whose effects are attached by process of law. The priority was intended to operate only where, by law, or by the act of the debtor, his property was sequestered for the use of his creditors; and it is proper that this prerogative right of the United States should be strictly construed and precisely defined, for it is in derogation of the general rights of creditors. (a)

mortgages and liens, and they may be enforced in the state courts. The attachment is a lien, and the creditor's bill a lien within the proviso, and the property of the bankrupt was not divested until the decree in bankruptcy. The decisions in the Circuit Courts of the U. States in Vermont, New Jersey, and Pennsylvania, and of the District Courts of Vermont, of Northern New York, and of several of the state courts, are all cited in support of this doctrine, by the Ass't V. Ch. of New York, in the case of Storm v. Waddell, 3 N. Y. Legal Observer, 367, s. c. 2 Sandford, Ch. R. 494, and which case is distinguished for its learning and ability, and its logical vindication of the doctrine. The two cases of Kittredge v. Warren, and of Kittredge v. Emerson, decided in the Supreme Court of New Hampshire, in the year 1844, and in which the judgment of the court was delivered by Mr. Ch. Justice Parker, are equally worthy of special notice for their learned research, and powerful, if not irresistible, deductions.1 See, also, Doremus v. Walker, Alabama R. N. S. vol. viii. p. 194, and Mabry v. Herndon, Id. 848, to the S. P., and in favor of the right of the state courts to inquire into the validity of a discharge upon the allegation, that the bankrupt did not render a true inventory of his property, but fraudulently concealed the same. (a) Watkins v. Otis, 2 Pickering's Rep. 102. The priority given by law to the United States does not extend to the real estate, or the proceeds of the real estate, belonging to or vested in the heirs of the debtor. The priority does not attach as against the heir, but only when the real estate, or the proceeds thereof, passes to, or is vested by law in the hands of an assignee of an insolvent debtor, or his executors or administrators. United States v. Crookshank, 1 Edw. Ch. Rep. 233. It does not extend so as to take the property of a partner in partnership effects, to pay the separate debt of such partner, when the partnership effects are not sufficient to satisfy the creditors of the partnership. United States v. Hack, 8 Peters's U. S. Rep. 271. It does not extend so as to reach the allowance made by the judge of probates to the widow of the deceased debtor, under the law of distribution of intestates' estates. Postmaster-General v. Robbins, Ware's Rep. 165. It does not extend to a surety to a custom-house bond, so as to entitle him, after paying the debt, to be subrogated to the rights of the United States as against his co-surety, or to give his demand for con

1 The doctrine of the New Hampshire courts has been finally established in the Supreme Court of the United States. Peck v. Jenness, 7 How. R. 612. Id. 626. See Kittredge v. Warren, 14 N. H. 509. Kittredge v. Emerson, 15 N. H. 227.

*

The government was a privileged creditor, under the Roman law, and entitled to priority in the payment of debts. The cessio bonorum was made subject to this priority. This is generally the case, in all modern bankrupt and insolvent laws. In England, the king's claim is preferred to that of a subject, provided the king's process was commenced before the subject had obtained judgment. (a) As to the fiscal lien of the government of the United States, it was held, in Harris v. *248 Dennie, (b) that the government had a lien on goods imported, for the payment of duties accruing on them, and not secured by bond; and that the United States were entitled to the custody of the goods until the duties were paid or secured; and any attachment of the goods under state process, during such custody, was void. On the other hand, it was held, that the government had no general lien on the goods of the importer, for duties due by him upon other importations. (c)

tribution a preference over other creditors. Pollock v. Pratt & Harvey, 2 Wash. C. C. Rep. 490. But this priority, as given by the statute of 1797, applies to equitable as well as legal debts. Howe v. Sheppard, 2 Sumner, 133. It was further held, in Beaston v. Farmers' Bank of Delaware, 12 Peters, 102, that no lien was created by the statute of March 3d, 1797, and that the priority established by it could never attach, while the debtor continues the owner and in possession of the property, though he be unable to pay his debts-that no evidence of his insolvency can be received, until he has been divested of his property; and when thus divested, the person who takes the title becomes a trustee for the United States. See Conkling's Treatise, 2d edit. 469-476, for a condensed view of the statutes and judicial decisions on this question of priority asserted by the United States.

(a) Stat. Hen. VIII. c. 39.

(b) 3 Peters's U. S. Rep. 292.

(c) In Maryland, by statute, passed in 1778, the commencement of a suit by the state against a public debtor, created a lien on the lands of the debtor, and a preference over all other creditors, who had not, prior to the commencement of the suit, secured a lien by judgment, mortgage or otherwise. Davidson v. Clayland, 1 Harr. & Johns. 546. The preference in payment of debts was a branch of government prerogative at common law, and it was introduced as such into Maryland. It is the law still, where the property of the debtor remains in hand, and there is no lien standing in the way. State of Maryland v. Bank of Maryland, 6 Gill & Johnson, 205. In Connecticut, the state has a priority of claim against the estate of an insolvent debtor; and state sureties paying the debt have the same privilege. Revised Statutes of Connecticut, 1826, p. 212. The state preference rests, in this country, upon statutes; and the common law gives none over other creditors. The State v. Harris, 2 Bailey's S. C. Rep. 598. Keckley v. Keckley, 2 Hill's S. C. Ch. Rep. 256. The common-law prerogative of the king, to be paid in preference to all other creditors, is therefore not universally adopted in this country. It prevails in the government of the United States, and in Maryland, North Carolina, Indiana, Connecticut, &c., but not in South Carolina. In

Congress may create a bank.

(2.) The next case which called forth a construction from every part of the government as to the implied

Georgia, state taxes have preference over all incumbrances whatsoever. State v. Pemberton, Dudley's Rep. 15. In Indiana, the state has preference of all other creditors; and real and personal estate is bound on behalf of the state from the teste of the first process. R. Statutes, 1838, p. 283.

As to the lien of judgments obtained by individuals in the federal courts, it was decided in the Circuit Court of the United States, in New York, in November, 1829, in the case of Konig v. Bayard,1 that judgments in the Circuit and District Courts in New York were a lien upon lands as against subsequent purchasers, from the time they were regularly docketed, according to the practice of those courts, and that the usage of docketing those judgments have prevailed since 1795. The same doctrine was assumed in reference to judgments in the federal courts in Pennsylvania, in the case of Conard v. Atlantic Ins. Co. 1 Peters's U. S. Rep. 386; and the principles contained in this last case were reviewed and confirmed in Conard v. Nicoll, 4 Peters's U. S. Rep. 291. The same rule as to judgments in the Circuit Court of the United States in Ohio. Sellers v. Corwin, 5 Hammond's Rep. 400. There is no act of congress making judgments in the United States courts a lien on lands. Such a lien depends upon the local laws of the state where the land lies. Tayloe v. Thomson, 5 Peters's R. 358. In New York, therefore, a judgment in one of the federal courts within that state, is a lien upon the lands of the debtor within the state, for the term of ten years from the docketing of the judgment. The Manhattan Company v. Evertson, 6 Paige's R. 457. Indeed, in every state, the judgments of the federal courts have the same lien, to the extent of its jurisdiction, as the judgments of the highest court of the state. Den v. Jones, 2 McLean's Rep. 78, 83.2

Debtors to the United States for moneys received, their executors and administrators, &c., omitting, on due notice, to render to the auditor of the treasury their accounts and vouchers for the expenditure of such moneys, are to be sued under the direction of the comptroller of the treasury, and are to be subject to the costs and charges of such suits, whether the ultimate decision be in their favor or against them. (Act of congress, March 3d, 1795, c. 113.) So receivers of public moneys, including all public officers, who shall fail to account and pay over the same, they and their sureties may be proceeded against forthwith by want of distress, and have their goods and chattels seized and sold, and if not sufficient, they may be imprisoned. The amount due is a lien on the real estate from the time of the levy of the distress warrant; and for want of sufficient goods and chattels, the lands may be sold on three weeks' notice, and a conveyance executed to the purchaser by the marshal. (Act of congress, sup. sec. 3, and act of May 15th, 1820, sec. 2, 3.)8 Any person aggrieved by the distress, may

1 Koning v. Bayard, 2 Paine, C. C. 251.

2 Lombard v. Bayard, 1 Wallace, jr., C. C. 196. Byers v. Fowler, 7 Engl. 218. Simpson v. Niles, 1 Carter, 196. Pollard v. Cocke, 19 Ala. 188. The lien of a judgment rendered in the Circuit Court is not necessarily extended during the pendency of a writ of error in the Supreme Court. Chouteau v. Nuckolls, 20 Mis. 442.

8 But see ex parte Randolph, 2 Brock (Va.) Rep. 447, 477-80. U. S. v. Hoyt, 10 How. U. S. 109.

Summary proceedings by warrant of distress under the act of 1820, do not conflict with the constitutional provision, that no man shall be deprived of his property without due process of law. They fall within a legitimate exercise of the executive power. Murray's Lessee v. Hoboken L. & I. Co. 18 How. U. S. 272.

powers of congress, was, whether congress had power to incorporate a bank. In the year 1791, the secretary of the treasury had recommended the institution of a national bank, as being of primary importance to the prosperous administration of the finances, and of the greatest utility in the operations connected with the support of public credit. But the bill for establishing a bank was opposed in the house of representatives, as not authorized by the constitution. It was contended that the government of the United States *249 was limited to the exercise of the enumerated powers, and that the power to incorporate a bank was not one of them, and, if vested in the government, it must be an implied power; and it was contended, that the power given to congress to pass all laws necessary and proper to execute the specified powers, must be limited to means necessary to the end, and incident to the nature of the specified powers. On the other hand, it was urged in favor of the bill, that incidental, as well as express powers, necessarily belonged to every government, and that when a power was delegated to effect particular objects, all the known and usual means of effecting them passed as incidental to them; and it was insisted, that a bank was a known and usual instrument, by which several of the enumerated powers of government were exercised. After the bill had passed the two houses of congress, the question touching its constitutionality was agitated with equal ability and ardor in the executive cabi

apply by bill to the district judge for relief under the process of injunction, and if still unredressed, he may appeal to the Circuit Court. (Act of congress, 15th May, 1820, sec. 4, 6.) He may also, if in prison, be relieved upon habeas corpus by the Circuit Court of the United States. (United States v. Nourse, 9 Peters, 8, Id. p. 12, note.) The doctrines of the government and courts of the United States are quite stringent in respect to the obligations of importers of goods. The import duty is held to be a personal debt chargeable upon the importer, as well as a lien on the goods themselves, and that the personal debt continues, though the goods be deposited with a bond given for the duties, and the goods be lost or destroyed. Meredith v. United States, 13 Peters, 486, 494. Another part of that case wears the same forbidding aspect. The enforcement of fines, penalties or forfeitures, under the revenue laws of the United States, is extremely strict and rigorous; but the act of congress of March 3d, 1797, sec. 1, and made perpetual by act of Feb. 11, 1800, authorizes the secretary of the treasury, on application, to mitigate or remit the penalties of these laws, when, from the facts of the case, first judicially ascertained, he should be of opinion that such penalties have been incurred without wilful negligence, or any intention of fraud.