Opinion of the Court.

plaintiff, but for the fact that the land in controversy was at the time of this selection by the State part of a claim under a Mexican grant. The grant itself was confirmed as valid by judicial proceeding, though upon final survey, this piece of land did not fall within it. But the exclusion of the proviso of the first section of the act of 1866 is of land held or claimed under a valid Mexican grant. This land was claimed under a Mexican grant, which proved to be valid, though, as located, it did not include all the land claimed.

In the case of Huff v. Doyle, already cited, we held that land embraced in this Mexican claim, though not included in the final survey, was within the excepting clause of the proviso of the act of 1866.

When this selection was made by the State in 1866, the land was not subject to such selection. The act of making such a selection was a nullity. It conferred no right on the State or its vendee, and when the United States made its remedial and confirmatory statute it refused to confirm selections within the bounds of Mexican claims and did not confirm this.

But in the case of Huff v. Doyle we held that, after the grant was surveyed and the surplus thus restored to the public domain and the congressional survey completed, the party might then present his claim under the selection, and if no superior right existed he would be entitled to the land. We said, referring to this legislation: "In all this we see the purpose of Congress to refer the exercise of the right of the State to select indemnity for school lands to the condition of the lands for which indemnity is claimed, as well as those out of which it is sought at the time the official surveys are made and filed in the proper office, or as soon thereafter as the right is asserted."

In that case the claimant under the State made and proved up his claim as soon as the survey was made, and the land was accordingly certified to the State. His opponent, who had also made his declaration as pre-emptor while the land was still claimed under the Mexican grant, which claim was for that reason also void, and, before the public survey or the survey of that grant was made, renewed his claim after that of plaintiff,

VOL. CXIV-25

Opinion of the Court.

and it was rejected. To both parties the condition of the land as liable to either claim at the time the claim was rightfully asserted governed the case.

In the case before us, the pre-emptor was the first, after the land ceased to be a part of the Mexican claim and was restored to the public domain, to make application to the land office. and assert his right to appropriate it as public land. The officers of the department recognized his claim, as we think they were bound to do, for the land had only a few days before this become public land, and thus liable to pre-emption, or to the valid selection of the State. The invalid selection, made at a time when the land was not subject to selection, was not made good by the act of 1866 which expressly excluded it, and while we held that, after the land became public land and liable to selection the former selection might be made good, its validity could only relate to the time of its assertion in the land office after it became so liable.

But, if before this latter proceeding was had, or notice to the land office of an intention to rely on the old selection was given, other rights had intervened, the State right of selection could not be made to the prejudice of those rights.

On this principle, we think all the benefit which could possibly be derived from the confirmatory act of 1866 in regard to such cases as this is had, while the just rights of others are preserved. The statute, in express language, gives the holder of the invalid State selection the same right as a pre-emption settler on unsurveyed lands, and no more. Here Bangs had asserted his right as soon as the land was released from the Mexican claim, and a few days before the congressional survey became fixed. The least that can be said of Bangs' claim is, that it was of equal force when the maps of these surveys were filed, and, by his superior diligence in a lawful manner, he obtained the patent, and plaintiff has no superior equity which should take it from him.

As to the allegation in the bill that Bangs made a forcible intrusion on the possession of complainant in September, 1870, before the land became public land, that was a question to be considered by land officers in the contest between the parties,

Syllabus.

and is not a fraud or mistake for which the patent can be held to enure to plaintiff's benefit. Nor does the plaintiff rely on it as sufficient. His claim to the benefit of defendant's title rests upon the selection made under State authority. That is the question of federal law which this court must decide, and as we have seen, that was well decided against him by the State

court.

Its decree is accordingly

Affirmed.

Aurreçoechea v. Sinclair & Others. This case is submitted on the same facts and principles and the same briefs as the foregoing case, and the same judgment necessarily follows. The judgment of the Supreme Court of California is accordingly Affirmed. Mr. Pringle and Mr. H. F. Crane for plaintiff in error. Mr. Michael Mullany for defendant in error.

Aurrecoechea v. Bangs & Others; Aurrecoechea v. Gerk & Others; Aurrecoechea v. Clark & Others; Aurrecoechea v. French & Others. In accordance with stipulations by the parties on file in this court, that the above-mentioned cases should abide the result of the judgment in the case of the same plaintiff against Bangs, the judgments in the cases are Affirmed.

AMY & Another v. SHELBY COUNTY TAXING
DISTRICT & Others.

IN ERROR TO THE SUPREME COURT OF THE STATE OF TENNESSEE.

Submitted January 8, 1885.-Decided April 13, 1885.

When a person owing taxes to a municipal corporation becomes the owner of obligations of the municipality which are by law receivable in payment of its taxes, the extinguishment of the tax and the debt is clearly within the doctrine of set-off of mutual obligations.

A State law authorizing a debtor of a municipality to procure the obligations of the municipality and use them as a set-off for his own debt, is not liable to constitutional objection as divesting creditors of the municipality of vested rights, or as impairing the obligation of contracts.

Opinion of the Court

The act of the Legislature of Tennessee of March 23, 1883, authorizing municipal corporations and taxing districts to compromise their debts by the issue of new bonds at the rate of fifty per cent. of the principal and past due interest, and providing that the acceptance of the compromise shall work a transfer of the creditor's debt with a right to the municipality or district to enforce it: and the act of the same date providing that such new bonds and their matured coupons shall be received in payment of back taxes at the same rate as the bonds known as the Flippin bonds, did not divest the holders of unpreferred debts of the city of Memphis of any rights conferred upon them by the previous legislation set forth or referred to in Meriwether v. Garrett, 102 U. S. 472; and violated no provision of the Constitution of the United States in those respects

This was a bill in equity filed in a State Court of Tennessee by the plaintiffs in error as plaintiffs below to have rights secured to them which were alleged to be invaded by legisla tion of that State referred to in the opinion of the court. A decree was rendered dismissing the bill, which decree was affirmed by the Supreme Court on appeal. The plaintiff below sued out this writ of error to review the latter judgment. The facts which make the federal question are stated in the opinion of the court.

Mr. William M. Randolph for plaintiffs in error.

Mr. S. P. Walker for the Taxing District of Shelby County.

Mr. Lawrence Lamb for defendants in error.

MR. JUSTICE MILLER delivered the opinion of the court. This is a writ of error to the Supreme Court of Tennessee. By an act of the Legislature of the State of Tennessee, approved January 29, 1879, the charter of the city of Memphis was repealed; and by another act, approved the same day, the territory which had constituted the city was created a taxing district, and the property of the city and all debts due to it and all uncollected taxes were vested in the State.

On March 13 of the same year another statute, familiarly called chapter 92, directed the appointment of an officer for each of the corporations, whose charter was repealed by the earlier statute, to be called the receiver of back taxes, who

Opinion of the Court.

was to be under the control of a Court of Chancery in the collection and paying out of the taxes so collected by him. Section 2 of this act directs that: "He shall distinguish in making such payments the respective sources from which the moneys paid in are derived, showing what is collected from taxes for general purposes and what for taxes for special purposes, designating the particular or special purpose, so that the same may be kept separate in the State treasury, in order that the treasurer may pay the same according to any lien, priority, or equity, if any, which may be declared by the Chancery Court, touching any of said funds, in favor of any creditor or class of creditors." Another section authorizes the receiver of back taxes to file a bill in chancery, in the name of the State, in behalf of all creditors, against all delinquent tax-payers, for the ascertainment and enforcement of the rights of the parties in regard to these back taxes unpaid.

Such a bill was filed and important proceedings have been had under it.

A bill was pending, however, in the Circuit Court of the United States before the bill authorized by this statute was filed, which sought to enforce the collection of taxes by certain parties, to which the receiver of back taxes was afterwards made a defendant, and under that bill a decree was rendered which treated the main provisions of this State legislation as void. On appeal from that decree this court reversed it, and announced certain principles which upheld the validity of the legislation of the State, but maintained the power of courts of the United States to enforce against the receiver, and in his hands, any decree or judgment by mandamus for levying and collecting taxes which had been made by such court prior to the beginning of this legislation.

The case, a report of which contains the history of this legislation and the statutes above referred to, is that of Meriwether V. Garrett, 102 U. S. 472.

Section 5 of the act last mentioned provided with some particularity for the receipt by the back-tax collector, in payment of these back taxes, of certain classes of outstanding indebtedness of the city of Memphis, and fixed the rate, not a