United States v. Nashville, C. & St. Louis Railway Company/Opinion of the Court

by Horace Gray

United States Supreme Court

118 U.S. 120

United States  v.  Nashville, C. & St. Louis Railway Company

 Argued: April 26, 1886. ---

It is settled beyond doubt or controversy, upon the foundation of the great principle of public policy, applicable to all governments alike, which forbids that the public interests should be prejudiced by the negligence of the officers or agents to whose care they are confided, that the United States, asserting rights vested in them as a sovereign government, are not bound by any statute of limitations unless congress has clearly manifested its intention that they should be so bound. Lindsey v. Miller, 6 Pet. 666; U.S. v. Knight, 14 Pet. 301, 315; Gibson v. Chouteau, 13 Wall. 92; U.S. v. Thompson, 98 U.S. 486; Fink v. O'Neil, 106 U.S. 272, 281; S.C.. 1 Sup. Ct. Rep. 325. The nature and legal effect of any contract, indeed, are not changed by its transfer to the United States. When the United States, through their lawfully authorized agents, become the owners of negotiable paper, they are obliged to give the same notice to charge an indorser as would be required of a private holder. U.S. v. Barker, 4 Wash. C. C. 464; S.C.. 12 Wheat. 559; U.S. v. Bank of Metropolis, 15 Pet. 377, 392, 393; Cooke v. U.S., 91 U.S. 389, 396, 398. They take such paper subject to all the equities existing against the person from whom they purchase at the time when they acquire their title; and cannot, therefore, maintain an action upon it if at that time all right of action of that person was extinguished, or was barred by the statute of limitations. U.S. v. Buford, 3 Pet. 12, 30; The King v. Morrall, 6 Price, 24. But if the bar of the statute is not complete when the United States become the owners and holders of the paper, it appears to us, nothwithstanding the dictum of COWEN, J., in U.S. v. White, 2 Hill, 59, 61, impossible to hold that the statute could afterwards run against the United States. Lambert v. Taylor, 4 Barn. & C. 138; S.C.. 6 Dowl. & R. 188.

In the present case the United States bought the coupons sued on, and the bonds to which they were annexed, long before any of them became payable, or the statute of limitations had begun to run against the right of any holder to sue thereon. The money with which they were bought was money received by the United States from the sale of lands ceded to them by the Chickasaw Nation of Indians. Those lands, the money received from their sale, and the securities in which that money was invested, were held by the United States, in trust, to be applied for the benefit of those Indians, in performance of the obligation assumed by the United States by treaties with them. The securities were thus held by the United States for a public use in the highest sense,-the performance of a quasi international obligation; and they continued to be so held until that obligation had been performed and discharged, after which they were held by the United States, like all other property of the government, for the ordinary public uses. Van Brocklin v. Tennessee, 117 U.S. 151, 158; S.C.. ante, 670. The necessary conclusion is that the statute of limitations of Tennessee never ran against the right of action of the United States upon these coupons, either while the United States held them in trust for the Indians, or since they have held them for other public uses; and that the decision of the circuit court was erroneous.

This case does not present the question what effect the statute of limitations may have in an action on a contract in which the United States have nothing but the formal title, and the whole interest belongs to others. See Maryland v. Baldwin, 112 U.S. 490; S.C.. 5 Sup. Ct. Rep. 278; Miller v. State, 38 Ala. 600.

Judgment reversed, and case remanded, with directions to set aside the verdict, and for further proceedings in conformity with law and with this opinion.

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