Upon a question of the Statute of Limita tions the local law prevails. Davie v. Briggs, 97 U. S. 628, 637 (24: 1086, 1089); Barrett v. Holmes, 102 U. S. 651 (26: 291); Henderson v. Griffin, 30 U. S. 5 Pet. 151 (8: 79). The law as established by the decisions of the New York courts barred the suit. North America brought an action in a court of | 604 (21: 947); Boston & A. R. Co. v. Richard- The Merchants Bank, on January 25, 1883, paid the amount of that judgment, and received [29] the check from the Bank of British North America, and on March 15, 1883, gave notice to the Leather Manufacturers Bank of having so paid, and tendered the check to it, and demanded payment of that amount, with interest from June 20, 1877, which was refused. In the present action, the defendant, at the close of the whole evidence, asked the court to instruct the jury to return a verdict for the defendant, upon the grounds "that the cause of action, if complete, did not accrue within six years before the commencement of this action;" and "that the cause of action, if a demand and tender were necessary, had not accrued when the suit was commenced." The court declined so to instruct the jury, directed a verdict for the plaintiff for the amount of the check, with interest from June 20, 1877, and gave judgment thereon. The defendant sued out this writ of error. Mr. Jno. E. Parsons, for plaintiff in error: The suit was barred by the Statute of Limitations. The locus of the transaction, and of the forum, was the City of New York. The New York Statute applies. The general statute is six years. N. Y. Code, 1876, § 382 et seq.; N. Y. Code, 1849, § 90 et seq. There was an immediate cause of action for Leonard v. Pitney, 5 Wend. 30; Allen v. The check was drawn to the order of Mrs. Graves v. Am. Exch. Bank, 17 N. Y. 205; Leonard v. Pitney, Allen v. Mille, Foot v. Farrington, and Cent. Nat. Bank v. North River Bank, supra; Bank of Utica v. Childs, 6 Cow. 238; Argall v. Bryant, 1 Sandf. 98; Bordwell v. Collie, 45 N. Y. 494. The forgery of the indorsement constitutes an immediate breach of the warranty of its genuineness. U. S. Bank v. Daniel, supra; Wilcox v. Plummer, 29 U. S. 4 Pet. 172 (7: 821). If to make perfect the right of action of the Merchants Bank for breach of warranty required it, the case showed that that Bank had yielded up its possession to a title paramount to its own. Cuse v. Hall, 24 Wend. 102; Sweetman v. Prince, 26 N. Y. 224; Burt v. Dewey, 40 N. Y. 283; McGiffin v. Baird, 62 N. Y. 329; Converse v. Miner, 21 Hun, 367. The failure by the Merchants Bank to tender the check to the Leather Bank and to demand payment precluded a recovery, on any theory of the case upon which it can be held that the claim was not barred by the Statute of Limitations. Southwick v. First Nat. Bank, 84 N. Y. 420, 430; Scholey v. Halsey, 72 N. Y. 578, 582; Stephens v. Bd. of Education, 3 Hun, 712; Ab bott v. Draper, 4 Denio, 51. Mr. John E. Burrill, for defendant in error: The cause of action did not accrue until June, 1877, when the British Bank for the first time objected to being charged with the amount of the check. Merchants Nat. Bank v. First Nat. Bank, 3 Fed. Rep. 66; U. S. v. Bank, 6 Fed. Rep. 852; Cowper v. Godmond, 9 Bing. 748; S. C. 23 E. C. L. R. 453; Churchill v. Bertrand, 2 Gale & D. 551; Ripley v. Withee, 27 Tex. 14. The money was paid by the Merchants Bank to the Leather Bank under a mistake of fact as to the genuineness of the indorsement of the check by the payee. An action to recover back money paid under a mistake of fact cannot be maintained until notice of the mistake has been given and a demand for repayment of the money made. Southwick v. First Nat. Bank, 84 N. Y. 430; Sharkey v. Mansfield, 90 N. Y. 229; Stephens v. Bd. of Education, 3 Hun, 715; U. S. v. Bank, 6 Fed. Rep. 852; Freeman v. Jeffries, L. R. 4 Exch. 189; Marine Nat. Bank v. City Bank, 59 N. Y. 67; Bank v. Bank, 91 N. Y. 108; Ganley v. City Nat. Bank, 98 N. Y. 495; Smi ley v. Fry, 1 Cent. Rep. 510, 100 N. Y. 263. A transferee of securities is not bound to notify the transferrer of a lack of genuineness of the securities or of the title thereto, until the lapse of a reasonable time after the discovery of the fact. U. S. v. Bank, 6 Fed. Rep. 855; Frank v. [33] [34] Lanier, 91 N. Y. 116; Heiser v. Hatch, 86 N. | Y. 614; Canal Bank v. Bank, 1 Hill (N. Y.) 291. The Leather Bank owed no duty to the plaintiff in error to examine and ascertain whether the indorsement was genuine, before the check was paid. Corn Exch. Bank v. Nassau Bank, 91 N. Y. 74; Crawford v. West Side Bank, 1 Cent. Rep. 253, 100 N. Y. 51; White v. Bank, 64 N. Y. 320; Holt v. Ross, 54 N. Y. 475; 2 Dan. Neg. Inst. 1663; Marine Nat. Bank v. Nat. City Bank, 59 N. Y. 67. Negigence in making a payment is no defense to an action to recover back money paid under a mistake of fact. Kingston Bank v. Eltinge, 40 N. Y. 891; Mayer v. Mayor of N. Y. 63 N. Y. 455. The decision in 91 N. Y. 106, settled the question in controversy here against the plaintiff in error; and notice of the institution of that action having been given to it, the judgment recovered in that action is conclusive as to the right of the Merchants Bank to recover in this action. Robbins v. Chicago, 71 U. S. 4 Wall. 657 (18: 427); Chicago v. Robbins, 67 U. S. 2 Black, 418 (17: 298); Heiser v. Hatch, 86 N. Y. 614. Mr. Justice Gray delivered the opinion of the court: payment as between the bank and the depositor; and the legal state of the account between them, and the legal liability of the bank to him, remain just as if the pretended payment had not been made. First Nat. Bank v. Whit man, 94 U. S. 343 [24: 229]. But as between the bank and the person obtaining money on a forged check or order, the case is quite different. The first step in bringing about the payment is the act of the holder of the check, in assuming and representing himself to have a right, which he has not, to receive the money. One who by presenting forged paper to a bank procures the payment of the amount thereof to him, even if he makes no express warranty, in law represents that the paper is genuine, and, if the payment is made in ignorance of the forgery, is liable to an action by the bank to recover back the money which, in equity and good conscience, has never ceased to be its property. It is not a case in which a consideration, which has once existed, fails by subsequent election or other act of either party, or of a third person; but there is never, at any stage of the transaction, any consideration for the payment. Espy v. Bank of Cincinnati, 85 U. S. 18 Wall. 604 [21: 947]; Gurney v. Womersley, 4 El. & Bl. 133; Cabot Bank v. Mortʊn, 4 Gray, 156; Aldrich v. Jackson, 5 R. I. 218; White v. Continental Nat. Bank, 64 N. Y. 316. The principal question argued is whether The question then is whether, if a bank, upon which a check is drawn payable to a particular person or order, pays the amount of the check to one presenting it with a forged indorsement of the payee's name, both parties supposing the indorsement to be genuine, the right of action of the bank to recover back the money from the person so obtaining it accrues immediately upon the payment of the money, or only after a demand for its repayment. In order to avoid confusion in dealing with this question, it is important to keep in mind the difference between the liability of a bank to a depositor, and the liability to the bank of a person who has received money from it upon a forged check or order. It is true that the liability, in either case, is that of debtor, not that of trustee or bailee; but there the resemblance ceases. The specific money deposited does not remain the money of the depositor, but becomes the property of the bank, to be invested and used as it pleases; its obligation to the depositor is only to pay out an equal amount upon his demand or order; and proof of refusal or neglect to pay upon such demand or order is necessary to sustain an action by the depositor against the bank. The bank cannot discharge its liability to account with the depositor to the extent of the deposit, except by payment to him, or to the holder of a written order from him, usually in the form of a check. If the bank pays out money to the holder of a check upon which the name of the depositor, or of a payee or indorsee, is forged, it is simply no ity to receive the money paid, when in fact he has no such title or authority, then, although there be no fraud or intentional misrepresentation on his part, yet there is no consideration for the payment; and the money remains, in equity and good conscience, the property of the payer, and may be recovered back by him, without any previous demand, as money had and received to his use. His right of action accrues, and the Statute of Limitations begins to run, immediately upon the payment. Thus, in the early case of Bree v. Holbech, 2 Doug. 654, where an administrator received the amount of the mortgage money upon his assignment of a mortgage purporting to be made to the deceased, but in fact a forgery, of which both parties were ignorant, it was held, by Lord Mansfield and the Court of King's Bench, that the right of action to recover back from the administrator the money so paid was barred by the Statute of Limitations in six years from the time of the payment. So, in Utica Bank v. Van Gieson, 18 Johns. 485, where a promissory note payable at the Bank of Geneva was left by the indorsers with the Utica Bank for collection, and sent by it to the Bank of Geneva for that purpose, and the amount was afterwards paid by the Utica Bank to the indorsers upon the mistaken supposition that it had been paid to the Bank of Geneva by the maker, when in fact it had not, and it was not pretended that the Utica Bank had been guilty of any negligence, the Supreme Court of New York held that notice of the fact that the note had not been paid by the maker was unnecessary to maintain an action by the Utica Bank to recover back the money from the indorsers; and Chief Justice Spencer said: "The [35] [36] plaintiffs' ground of action, then, is that the the court, might seem to support the position of The cases of Thomson v. Bank of British In Southwick v. First National Bank, 84 N. Y. 420, the decision was that there was no such mistake as entitled the party paying the money to reclaim it; and in Sharkey v. Mansfield, 90 N. Y. 227, it was adjudged that money paid by mistake, but received with full knowledge of all the facts, might be recovered back without previous demand; and what was said in either opinion as to the necessity of a demand where both parties act under mistake was obiter dictum. In Bank of United States v. Daniel, the acceptor and indorsers, upon taking up a bill of exchange for $10,000, which had been duly protested for nonpayment, paid 10 per cent as damages, under a mistake as to the local law upon the subject. Upon a bill in equity to relieve against the mistake and recover back the money, this court, while holding that such a mistake gave no ground for relief, also held that, if it did, the Statute of Limitations ran, in equity as well as at law, from the time of the payment, saying: "If the $1,000 claimed as Two other cases in that court were decided damages were paid to the bank at the time the together, and on the same day as Bank of British bill of exchange was taken up, then the cause North America v. Merchants Bank, above cited. of action to recover the money (had it been well In one of them, the defendants, who had infounded) accrued at the time the mistaken pay-nocently sold to the plaintiffs a forged note as ment was made, which could have been rectified genuine, and, upon being informed of the forin equity, or the money recovered back by a suit gery and requested to pay back the purchase at law." 37 U. S. 12 Pet. 32, 56 [9: 989, 998]. money, had expressly promised to do so if the In Dill v. Wareham, 7 Met. 438, the Supreme plaintiffs should be obliged to pay a third perJudicial Court of Massachusetts, speaking by son to whom they had in turn sold the note, Chief Justice Shaw, held that a party receiving were therefore held not to be discharged from money in advance on a contract which he had their liability to refund by the plaintiffs' havno authority to make, and afterwards refused ing awaited the determination of a suit by that to fulfill, was liable to the other party in an person against themselves, before returning the action for money had and received, without note to the defendants. Frank v. Lanier, 91 averment or proof of any previous demand. N. Y. 112. And in Sturgis v. Preston, 134 Mass. 372, where [37] land was sold for a certain sum by the square foot, and the purchaser, relying on the vendor's statement of the number of feet, made payment accordingly, and afterwards discovered that the number had been overstated, but disclaimed all charge of fraud or fraudulent concealment on the part of the vendor, it was held that the right of action to recover back the excess paid accrued immediately, without any previous demand, and was barred by the Statute of Limitations in six years from the date of the payment. See also Earle v. Bickford, 6 Allen, 549; Blethen v. Lovering, 58 Maine, 437. The judgment of the circuit court in the present case appears to have been based upon the decision in Merchants National Bank v. First National Bank, 4 Hughes, 9, which proceeds upon grounds inconsistent with the principles and authorities above stated, and cites no case except the very peculiar one of Cowper v. Godmond, 9 Bing. 748; S. C. 3 Moore & S. 219; in which the right of action to recover back money paid for a grant of an annuity, the memorial of which was defective, was held not to accrue until the grantor elected to avoid it on that ground, the annuity apparently being considered as not absolutely void, bnt as voidable only at the election of the grantor. Churchill v. Bertrand, 3 Q. B. N. S. 568; S. C. 2 Gale & D. 548. In the other case, a bank which had paid a check upon a forged indorsement supposed by both parties to be genuine, was held entitled to recover back the money, with interest from the time of payment-necessarily implying that the right of action accrued at that time. Corn Exchange Bank v. Nassau Bank, 91 N. Y. 74. In the case at bar, as in the case last cited, the plaintiff's right of action did not depend upon any express promise by the defendant after the discovery of the mistake, or upon any demand by the plaintiff upon the defendant, or by the depositor or any other person upon the plaintiff; but it was to recover back the money, as paid without consideration, and had and received by the defendant to the plaintiff's use. That right accrued at the date of the payment, and was barred by the Statute of Limitations in six years from that date. For this reason, without considering any other ground of defense, the order must be: Judgment reversed, and case remanded to the Circuit Court, with directions to set aside the verdict and to order a new trial, Mr. Justice Blatchford did not sit in this case, or take any part in the decision. See WESTERN UNION TELEGRAPH COM- Although some of the opinions of the Court of Appeals of New York, in the cases cited at the bar, contain dicta which, taken by themselves and without regard to the facts before v. COMMONWEALTH OF PENNSYLVANIA. [38] [39] The Commonwealth of Pennsylvania is not en- | classes of messages, which, with commissions titled to recover of a telegraph company taxes on and interest, make up the total recovery. It telegraphic messages sent, except in reference to messages transmitted wholly within the State. is clear, and this is conceded by the defendant Western Union Tel. Co. v. Teras, 105 U. S. 460 (26: in error, that, under the decisions in this court 1067); Ratterman v. Western Union Tel. Co. 127 U. S. in Western Union Telegraph Company v. Texas, 411 (32: 229). [No. 56.] 105 U.S. 460 [26: 1067], and Ratterman v. Western Union Telegraph Company, 127 U. S. 411 [32: 229], the Commonwealth was not entitled to spect to the messages recover for the taxes in question, excepting in re Submitted Oct. 18, 1888. Decided Oct. 22, 1888. ERROR to the Supreme Court of the ment against plaintiff in error for taxes on tele- The facts are stated by the court. Messrs. M. E. Olmsted and Brown & Wells, for plaintiff in error: The domicil of a corporation is the State of its origin. Potter, Corp. § 10. It cannot migrate to another sovereignty. Bank of Augusta v. Earle, 38 U. S. 13 Pet. 586 (10: 306); Paul v. Va. 75 U. S. 8 Wall. 168 (19: 357); St. Louis v. Ferry Co. 78 U. S. 11 Wall, 423 (20: 192). The power of taxation is necessarily limited to subjects within the jurisdiction of the State. McCulloch v. Md. 4 Wheat. 429 (4: 607); Hays v. Pacific Mail Steamship Co. 58 U. S. 17 How. 596 (15: 254); Morgan v. Parham, 83 U. S. 16 Wall. 471 (21: 303); People, Hoyt, v. Comrs. of Taxes, 23 N. Y, 224; People v. Comrs. of Taxes, 58 N. Y. 242; State v. Engle, 34 N. J. Law, 425; Gloucester Ferry Co. v. Pa. 114 U. S. 196 (29: 158); State Freight Tax, 82 U. S. 15 Wall. 232 (21: 146). The interstate business of a telegraph company is not subject to state taxation in any way. Leloup v. Port of Mobile, 127 U. S. 640 (32: 311); Walling v. Mich. 116 U. S. 446 (29: 691); Pickard v. Pullman Southern Car Co. 117 U. S. 34 (29: 785); Wabash etc. R. Co. v. Ill. 118 U. S. 557 (30: 244); Fargo v. Mich. 121 U. S. 230 (30: 888); Phila. etc. Steamship Co. v. Pa. 122 U. S. 326 (31: 1200). A State cannot regulate or tax the operations or objects of interstate or foreign com merce. the State. The judgment will therefore be re- JOHN S. KIDD, Piff. in Err., V. I. E. PEARSON et al. (See S. C. Reporter's ed. 1-26.) Iowa law authorizing the abating as a nuisance 1. The law of Iowa authorizing the abating as a tween the States. 3. A State has the right to prohibit or restrict the limits; to prohibit all sale and traffic in them in the manufacture of intoxicating liquors within its State; to inflict penalties for their manufacture and sale, and to provide regulations for the abatement as a common nuisance of the property used for such forbidden purposes. 4. Whether a State, in the exercise of its undis- ure of intoxicating liquors except for certain pur- H. & St. Jo. R. Co. v. Husen, 95 U. S. 465 N. O. 112 U. S. 69 (28: 653); Walling. Mich.,IN ERROR to the Supreme Court of the State Pickard v. Pullman Southern Car Co., Wabash etc. R. Co. v. Ill., and Fargo v. Mich. supra; Robbins v. Shelby Co. Tax. Dist. 120 U. S. 489 (30: 694). Messrs. John F. Sanderson, Dep. AttyGen., and W. S. Kirkpatrick, Atty-Gen., for defendant in error. Mr. Chief Justice Fuller delivered the opinion of the court: Judgment was rendered against plaintiff in error for taxes on telegraphic messages sent from point to point within the State of Pennsylvania; on messages sent from points within the State to points in other States; on messages sent from points in otber States to points within the State, and on messages sent to and from points in other States, which passed over lines partly within the State; and the record discloses the several amounts of taxes upon the several of Iowa, to review a judgment ordering that a distillery, used by plaintiff in 'error, be abated as a nuisance and enjoining him from the manufacture therein of intoxicating liquors. Affirmed. Reported below, sub nom. Pearson v. Inter- Statement by Mr. Justice Lamar: [40] [1] [2] [3] [4] said Kidd for the unlawful manufacture and | to make monthly reports to the county auditor, Section 1523 provides: No person shall manufacture or sell, by himself, his clerk, steward or agent, directly or indirectly, any intoxicating liquors, except as hereinafter provided; and the keeping of intoxicating liquors, with intent on the part of the owner thereof, or any person acting under his authority or by his permission, to sell the same within this State, contrary to the provisions of this chapter, is hereby prohibited; and the intoxicating liquor so kept, together with the vessels in which it is contained, is declared a nuisance, and shall be forfeited and dealt with as hereinafter provided. Section 1524 provides: Nothing in this chapter shall be construed to forbid the sale by the importer thereof of foreign intoxicating liquor imported under the authority of the laws of the United States regarding the importation of such liquors and in accordance of [with] such laws; Provided, That the said liquor at the time of said sale by said importer remains in the original casks or packages in which it was by him imported, and in quantities not less than the quantities in which the laws of the United States require such liquors to be imported, and is sold by him in said original casks or packages and in said quantities only; and nothing contained in this law shall prevent any persons from manufacturing in this State liquors for the purpose of being sold, according to the provisions of this chapter, to be used for mechanical, medicinal, culinary, or sacramental purposes. Section 1525 prescribes a penalty for a violation of the law by manufacturers, as follows: Every person who shall manufacture any intoxicating liquors as in this chapter prohibited, shall be deemed guilty of a misdemeanor, and upon his first conviction for said offense shall pay a fine of two hundred dollars and costs of prosecution, or be imprisoned in the county jail not to exceed six months; and on his second and every subsequent conviction for said offense he shall pay a fine of not less than five hundred dollars, nor more than one thousand dollars, and costs of prosecution, and be imprisoned in the county jail one year. Section 1526 defines who may be permitted to manufacture under the law, and for what purpose the manufacture may be carried on, as follows: Any citizen of the State, except hotel keepers, keepers of saloons, eating houses, grocery keepers, and confectioners, is hereby permitted, within the county of his residence, to manufacture or buy and sell intoxicating liquors for mechanical, medicinal, culinary, or sacramental purposes only, provided he shall first obtain permission from the board of supervisors of the county in which such business is conducted, as follows. Sections 1527 and 1529 provide for the manner of obtaining the permit, and section 1530 sets out the conditions under which it may be granted. It is as follows: At such final hearing, any resident of the county may appear and show cause why such permit should not be granted; and the same shall be refused, unless the board shall be fully satisfied that all the requirements of the law have, in all respects, been fully complied with, that the applicant is a person of good moral character, and that, taking into consideration the wants of the locality and the number of permits already granted, such permit would be necessary and proper for the accommodation of the neighborhood. Section 1543 provides for proceedings in equity to abate and enjoin unlawful manufacture. The averments of the petition are, in substance, that the distillery described therein was erected by said J. S. Kidd for the manufacture of intoxicating liquors, contrary to the statute of Iowa; that said Kidd had been, ever since the 4th of July, 1884, and is still, engaged in the manufacture of intoxicating liquors, upon the premises aforesaid, for other than mechanical, medicinal, culinary and sacramental purposes; with the concluding averment "that the defendant manufactures, keeps for sale and sells, within this State and at the place afore said, intoxicating liquors, to be taken out of that State and there used as a beverage, and for other purposes than for mechanical, medicinal, culinary and sacramental purposes, contrary to the statute of Iowa." Kidd in his answer specifically pleaded that he is now, and has been ever since the 4th of July, 1884, authorized by the board of supervisors to manufacture and sell intoxicating liquors, except as prohibited by law; and that, in the manufacture and sale of liquors, this defendant has at all times complied with the requirements of the law in that behalf. Upon the trial it was proved by undisputed evidence that Kidd held each year, from July 4, 1884, a permit regularly issued from the board of supervisors of Polk County, covering the period of the alleged violations of law, authorizing him to manufacture and sell intoxicating liquors for mechanical, medicinal, culinary and sacramental purposes; that his monthly reports, made on oath, in compliance with the requirements of the law, show that there were no sales for mechanical, medicinal, culinary and sacramental or any other purpose, in the State of Iowa; and that all the manufactured liquors were for exportation and were sold outside of the State of Iowa. A decree was rendered against Kidd, ordering that the said distillery be abated as a nuisance, according to [5] the prayer of the petitioner, and enjoining said Kidd from the manufacture therein of any and all intoxicating liquors. On appeal to the Supreme Court of Iowa this decree was affirmed by that court. Hence this writ of error. Messrs. Benjamin Harris Brewster and F. W. Lehmann, for plaintiff in error: Where the subject is national in its character, the power of Congress is exclusive of all state authority. Welton v. Mo. 91 U. S. 275 (23:347); Mobile Co. v. Kimball, 102 U. S. 691 (26:238); Brown v. Houston, 114 U. S. 622 (29:257). The nonexercise of its power by Congress is tantamount to a declaration that such commerce shall be free. Wabash etc. R. Co. v. I. 118 U. S. 557 (30:244); Passenger Cases, 48 U. S. 7 How. 416 (12:758). Intoxicating liquors are property, and traffic in them is within the meaning of the term comThe manufacturer, like the seller, is required merce in the Federal Constitution. |