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United States Supreme Court

81 U.S. 361

Pugh  v.  McCormick

ON the 12th of April, 1863, R. C. Martin, at Assumption, Louisiana, drew his promissory note at one year for $7000, in favor of W. W. Pugh, which note after being indorsed there by Pugh came into the hands of James McCormick. The note, as issued, had no stamp upon it.

It was not paid at maturity and no notice of non-payment was given to Pugh, the indorser, who was thus of course discharged. More than eighteen months after the non-payment, however, Pugh wrote upon the note—

'ASSUMPTION, October 16th, 1865.

'Notice of demand, non-payment, and protest waived, and all legal responsibility assumed.

'W. W. PUGH.'

Neither the indorsement nor the waiver of protest, &c., had any stamp.

On the 1st and 14th of July, 1862, the 3d March, 1863, and the 30th of June, 1864, Congress had passed acts [1] requiring all notes, under penalty of their being incapable of being sued on and void, to bear certain stamps; making also some benignant mitigations of the law in cases where, without fraudulent intent, they had not been stamped; neither acts nor modifications being necessary to be here stated.

On the 13th of July, 1866, [2] however, was passed an act necessary to be more fully mentioned. That act-amending the 158th section of the act of June 30th, 1864, and enacting that 'any person who shall make, sign, or issue, or who shall cause to be made, signed, or issued any instrument, document, or paper . . . or shall accept, negotiate, or pay, or cause to be accepted, negotiated, or paid any bill of exchange, draft, or order, or promissory note for the payment of money without the same being duly stamped . . . with intent to evade the provisions of the act, shall for every such offence forfeit the sum of $50;' and, enacting further, that such instrument, document, or paper, bill, draft, order, or note, not being stamped according to law, shall be deemed invalid and of no effect-went on in its 9th section to make certain provisos by which the instrument, though void when made, from not being stamped, might be validated and made operative by being post-stamped. The 2d, 3d, and 4th of the provisos ran thus:

'And provided (2d) further, That hereafter, in all cases where the party has not affixed to any instrument the stamp required by law thereon, at the time of making or issuing the said instrument, and he or they, or any party having an interest therein, shall be subsequently desirous of affixing such stamp to said instrument, he or they shall appear before the collector of the revenue of the proper district, who shall upon the payment of the price of the proper stamp required by law, and of a penalty of fifty dollars . . . affix the proper stamp to such instrument or copy, and note upon the margin thereof the date of his so doing, and the fact that such panalty has been paid, and the same shall thereupon be deemed and held to be as valid, to all intents and purposes, as if stamped when made or issued.

'And provided (3d) further, That where it shall appear to said collector, upon oath or otherwise, to his satisfaction, that any such instrument has not been duly stamped at the time of making or issuing the same, by reason of accident, mistake, inadvertence, or urgent necessity, and without any wilful design to defraud the United States of the stamp, or to evade or delay the payment thereof, then, and in such case, if such instrument shall within twelve calendar months after the first day of August, eighteen hundred and sixty-six, or within twelve calendar months after the making or issuing thereof, be brought to the said collector of revenue to be stamped, and the stamp tax chargeable thereon shall be paid, it shall be lawful for the said collector to remit the penalty aforesaid and to cause such instrument to be duly stamped, and the instrument may be used in all courts and places in the same manner and with like effect as if the instrument had been originally stamped.

'And provided (lastly) further, That in all cases where the party has not affixed the stamp required by law upon any instrument made, signed, or issued, at a time when and at a place where no collection district was established, it shall be lawful for him or them, or any party having an interest therein, to affix the proper stamp thereto, . . . and the instrument to which the proper stamp has been thus affixed prior to the first day of January, one thousand eight hundred and sixty-seven, shall be as valid to all intents and purposes as if stamped by the collector in the manner hereinbefore provided.'

In this state of enactment McCormick, the holder of the note, sued on the 25th March, 1868, Pugh, the indorser, in one of the inferior State courts of Louisiana, upon it. The trial coming on January 12th, 1870-and there being no question but that a stamp of $3.50 was the proper stamp as respected amount, for the note (on which $5000 had been paid)-the note was offered in evidence, when it was found to have a $3.50 stamp upon it, but also a certificate thus:

Internal revenue stamps to the amount of $3.50 affixed to this instrument and cancelled, by me, at the request of James McCormick, Esq., this 7th day of October, 1869. Penalty remitted, interest collected.

$3.50 U.S.I.R. stamp cancelled


Collector of United States Internal Revenue for the Second District of Louisiana.


The defendant objected to the introduction in evidence, of—

1st. The note itself, because a note which had been issued unstamped could not after twelve months be post-stamped, unless the penalty was paid; that after twelve months the collector could not stamp and remit the penalty.

2d. To the introduction of the indorsement of the defendant to the instrument, because the said indorsement was not stamped at the time of making it, nor at any time since.

3d. To the writing showing a waiver of demand, protest, and notice of protest, because the said waiver was not, and had never been, stamped.

The court overruled the objections, considering—

1st. That the stamping of the note by Chapman, the collector of internal revenue, was regular enough.

2d. That no stamp was needed for the indorsement.

3d. That none was needed for the waiver.

Judgment accordingly was given, January 12th, 1870, for the plaintiff, and that judgment being taken to the Supreme Court of Louisiana, the judgment was, on the 7th of March, 1870, there affirmed. The case was now here for review.

The reader perceives, of course, that in remitting the penalty the collector of internal revenue had proceeded under the third of the provisos, quoted on page 363, his capacity to do which was given but for twelve months from August 1st, 1866, or twelve months from the issuing of the note, i. e., in this particular case, twelve months from the 12th April, 1863; whereas here the collector's certificate showed that the remission had been on the 12th of October, 1869; plainly too late; though had the penalty been paid, then, under the previous proviso,-where no limit of time was fixed to the collector's power to post-stamp-the post-stamping would have apparently been good.

In this state of things Congress, on the 14th July, 1870, [3] passed yet another act, amending the act of July 30th, 1866, containing the provisos above quoted. It was amended:

'By striking out the words 'fifty dollars,' in the second proviso, and inserting in lieu thereof the following, 'double the amount of tax remaining unpaid, but in no case less than $5;' also by striking out the words 'sixty-six' in the third proviso, and inserting in lieu thereof the words 'seventy-one;' also by striking out the words 'sixty-seven' in the last proviso, and inserting in lieu thereof the words 'seventy-two."

Of course, with the act of 1866, thus amended-assuming that the amendatory act operated retrospectively (that is to say, on notes made previously to July 14th, 1870, the date of its passage), though not unless that assumption was made-if the collector any time after its passage and prior to the 1st of August, 1871, affixed the stamp and remitted the penalty the post-stamping would have been good. Here it had been done on the 12th of October, 1869.

The questions before this court were:

1. Whether this amendatory act of July 14th, 1870, operated retrospectively.

2. Whether, assuming that it did, the court would reverse the judgment below, since though the court below might have wrongly decided at the time that the case came before it (January 12th, 1870), that the collector had power on the 7th October, 1869, to remit the penalty, yet, when by reversal, the case should come again before it the same decision would in virtue of the subsequently passed amendatory act of July 14th, 1870, and its retrospective operation, have to be made, and the same judgment have to be now rightly given which was then given wrongly.

3. Whether the indorsement by Pugh required a stamp.

4. Whether the waiver of demand and notice did.

The case came up to be argued in this court February 7th, 1872.

Mr. Miles Taylor, for the plaintiff in error; Mr. T. J. Durant, contra.

Mr. Justice CLIFFORD, on the 19th of February, 1872, delivered the opinion of the court.


^1  12 Stat. at Large, 480, 561; Ib. 725; 13 Id. 291, 481.

^2  14 Id. 143.

^3  16 Stat. at Large, 257.

This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).