
    James R. Young, State Commissioner, vs. Robert Hughes.
    
      Commissioners of the Sinking Fund v. Walker, 6 How. 143 ; cited and confirmed.
    By the charter of the Planters’ Bank, a portion of the dividends accruing upon the stock belonging to the stale was directed to constitute a sinking fund, under the direction of the auditor of the state, and the president and cashier of the bank, for the redemption of the state bonds, issued to obtain money to pay for the stock subscribed for by the state ; by subsequent legislative enactments, the management and control of this fund were vested in a person styled the “ state commissioner,” who was empowered to manage the fund, and to compel and coerce payment and settlement, by suit of otherwise; the state commissioner brought an action at law against the maker of a note belonging to the fund ; held, on demurrer to the declaration, that the state held this fund as a trust fund, and it was her duty to appoint a trustee in case any vacancy occurred ; that the court had a right to infer a vacancy from the appointment of the new trustee, and no objection made thereto on the part of the old; that if the consent of the old trustees were required to the new appointment, it would be presumed from their surrender of the trust fund to the new trustee ; the debtors to the fund could not object to the appointment, the trust was not for them ; the legal title was in the state commissioner, as trustee, and he could maintain the action at law on the note.
    The holders of the Planters’ Bank bonds have no control over the action or appointment of the trustees of the sinking fund for the redemption of those bonds ; the state alone has the control of the fund ; if the bond-holders have any interest in the fund, it can only be protected and enforced in a court of equity. They have no voice in the appointment of a trustee ; that is the duty of the state; they could only object, if at all, in a court of equity, and there probably only for an improper exercise of the power of appointment.
    In error from the circuit court of Hinds county ; Hon. George Coalter, judge.
    James Robert Young filed in the circuit court bf Hinds county, the following declaration, viz.:
    “In the circuit court of Hinds county, to April term, 1846, James Robert Young, state commissioner, duly appointed, qualified and empowered conformably to the acts of the legislature of the state of Mississippi, in such case made and provided, plaintiff by his attorneys, complains of Elijah H. Watson and Robert Hughes, who are summoned &c. of a plea of trespass on the case; for that at Natchez, to wit, in said county on the 15th day of September, 1836, the said Watson by the name of E. H. Watson, and said Hughes by the name of Robert Hughes, with E. T. Summers and John T. Knox, who are not herein sued, made and delivered their promissory note in these words, viz:
    
      ‘ $1000. Natchez, September loth, 1836.
    !i Twelve months aftqr date, we, or either of us, promise to pay to the commissioners of the sinking fund of the state of Mississippi, and their successors, one thousand dollars, value received, payable and negotiable at the Planters’ Bank of the state of Mississippi, at Natchez, with ten per cent, interest, per annum, from date until paid, it being for a bona fide loan of money from said fund.
    E. T. SUMMERS,
    John T. Knox,
    E. H. Watson,
    Rob. Hughes.’
    “ And the plaintiff avers, that by force and effect of the statutes aforesaid, he succeeded to all the rights and powers of the said commissioners of the sinking fund, and became entitled to demand and have of the defendants, the sum of money and interest in said promissory note specified; and the defendants being liable to pay to him the same, they afterwards, to wit, on the 3d day of March, 1846, in the said county, in consideration thereof, undertook and promised the plaintiff to pay him said sum of money with said interest thereon, when thereunto they should be requested; yet the defendants, not regarding their said promise, &c., did not on, before, or since the maturity of said note, nor did the said Summers or Knox, pay to the commissioners of the sinking fund aforesaid, or-to the plaintiff, the said sum with said interest, or any part thereof, though thereto after requested; but so to do, the defendants have wholly failed, and still fail and refuse, to the damage of the plaintiff, two thousand dollars; so he sues.
    j, . Foote and Hutchison.”
    The defendant Hughes, at the return term, demurred generally; Watson plead non-assumpsit, and the statute of limitations of six years.
    At the December term, 1846, the following judgment was rendered: “This day came the plaintiff.by attorney, and the defendant Watson, pursuant to the statute in such case, having on the 29th day of July paid to the plaintiff, in his discharge, the sum of five hundred dollars, his portion of the amount demanded; the plaintiff now here, in consequence hereof, discharges the said Watson, and discontinues this suit, as to him, saving his rights, as against the defendant Hughes, and thereupon the demurrer of the said Hughes to the declaration being argued,” was sustained; and Young sued out this writ of error.
    [For the better understanding of the decision in this case, a brief history of the sinking fund is subjoined.]
    In the year 1830, the legislature incorporated the Planters’ Bank, with a capital stock of $ 3,000,000, to be divided into shares of $100 each, reserving 20,000 shares to the state of Mississippi, to be subscribed and paid for by the state in the manner pointed out by the charter. The seventh section of the act provides, that when the subscriptions shall be opened, the governor shall, on behalf of the state, subscribe for 10,000 shares, and that, after the appointment of the directors, the auditor of public accounts shall, in payment for the said stock, deliver to the president, directors and company, bonds of the state to the amount of $1,000,000, payable to the order of the said president, directors and company, bearing an interest at five per cent, per annum, payable half yearly, — the principal to be payable in four equal instalments at ten, fifteen, twenty, and twenty-five years from date; and provides further, that the bonds may be assigned by the indorsement of the president and cashier of the bank.
    The eighth section pledges the faith of the state to the punctual payment of the principal and interest of the bonds as the same may mature. The ninth section makes it the duty of the bank to sell the bonds.
    The tenth section makes it the duty of the president, directors and company to deduct from the semi-annual dividends that may be declared on the state stock in the bank so much as may be necessary to pay the semi-annual interest accruing on the bonds, and so to apply it; and provides, that “ the surplus of such dividends, if any there be, shall constitute a sinking fund under the management of the auditor and the president and cashier of said bank for the redemption of said bonds, and that, until the full payment and extinguishment of the bonds which shall first become due, amounting to two hundred and fifty thousand dollars, no part of such surplus shall be applied to any other purpose than the extinguishment of the principal and interest of said bonds;” and further, that after the payment of the principal and interest of the bonds first maturing, any surplus of such dividends may be applied to other purposes.
    At a subsequent session of the legislature, held in the same year, an additional amount of bonds not exceeding $500,000, was authorized to be issued and sold for like purpose with those first authorized.
    On the 5th of February, 1833, an amendatory act was passed, authorizing the issuance and sale of other bonds to the extent of $1,500,000, the proceeds to be applied to the stock reserved to the state.
    Under these legislative acts, bonds were issued and sold to the amount of $2,000,000, maturing as follows, to wit: $125,000 January 1, 1841; $125,000 January 1, 1846; $125,000 January 1, 1851; $125,000 January 1, 1856, and three instalments of $500,000 each, due March 1, 1861,1866, and 1871.
    For a time the bank was apparently prosperous, and large dividends were declared. The interest accruing semi-annually on the state bonds was paid up to about the year 1840. And the surplus dividends on the state stock, under the management of the auditor of public accounts, and the president and cashier of the bank, were loaned out at the highest legal rate of interest. ,
    
    Nothing has been paid on account of the principal of the bonds, or on account of the semi-annual interest accruing since 1840.
    On the 9th day of June, 1845, the charter of the Planters’ Bank was, by the judgment of the circuit court of Adams county, declared forfeited, and at the January term, 1846, that judgment was affirmed by the high court of errors and appeals. .
    On the 24th of February, 1844, an act was passed by the legislature, entitled “an act to appoint a state commissioner, and for other purposes.”
    
      The first section provides, that “there shall be appointed by the governor of the state, by and with the advice and consent of the senate, a suitable and competent agent, to be called and styled the state commissioner.”
    The second section gives to this agent the power to “manage, collect, and receive the sinking fund,” as well as certain other funds, and authorizes him to coerce, by suit or otherwise, a speedy and prompt payment of all debts due that fund.
    By the third section the commissioner is required to make quarterly reports to the governor.
    By the fourth section he is required to pay all moneys received by him into the “state treasury,” stating in his deposit receipt the account upon which such sum of money may have been received.
    The fifth, sixth, seventh, eighth and ninth sections provide securities to the state for the discharge of his duties, for his compensation, for the employment of counsel, and that the act shall take immediate effect.
    On the 18th of March, 1844, James R. Young was appointed state commissioner in virtue of the above act, to hold under the general law for the term of four years.
    On the 16th of February, 1846, an act was passed authorizing the state commissioner to sell the lands belonging to the fund, receiving Planters’ bank bonds in payment, authorizing him to compromise and compound with the debtors to the fund, and authorizing the release of any of several joint debtors.
    On the 4th of March, 1848, an act was passed appropriating the amount then in the treasury, belonging to the sinking fund, and such amounts as might thereafter be received “ to the payment of the coupons for interest issued by the state on account of the Planters’ bank.”
    Freeman, attorney-general, for plaintiff in error.
    1. The statute appointing state commissioner, authorizes him, upon giving bond, to receive and collect the fund, and for that purpose to bring suit. He is the successor in office of the commissioners of the sinking fund, and this court have decided that they had the power to sue in 'their own names, and hence the same power devolves on their successor. Comm’rs Sinking Fund v. Walker, 6 How. (Miss.) Rep. 143.
    2. The history of the fund and the statutes show that the state, by the president and directors of the bank, or such other officers as might be appointed, was to pay the interest and principal of the bonds, and that the duty of the commissioners was simply to manage the fund, and render' the same productive for the end proposed by the act.
    3. In the case of Commissioners of the Sinking Fund v. Walker, this court decided that said commissioners were authorized to sue and be sued in their own names, and to do all necessary acts in the management of the fund, to render the same profitable. In February, 1844, a statute was passed, establishing the office of state commissioner, and authorizing said state commissioner to manage, collect, and receive the sinking fund, and “full power and authority to compel and coerce, by suit or otherwise, a speedy and prompt settlement and payment of said fund ” was given to such commissioners. Laws of 1844, p. 149. By the third section, he is required to render a quarterly account to the governor; by the fourth section, he is required to pay the money he collects into the treasury; by the fifth, he is to give bond in the sum of $70,000; by the sixth, the penalty for a breach of his duties is-declared; by the seventh, he is authorized to employ and pay counsel. Here we see full power is delegated to receive and collect the fund by suit or otherwise, and the power to employ and pay counsel shows that the suits were to be in his own name; because if the suits were to be brought by the state, in the name of the state, the district attorney and attorney-general would be the proper officers to bring suits, and the employment of counsel would not be necessary.
    
      Guión and Baine, for defendant in error.
    1. We deny the right of the state-commissioner to site for the sinking fund in his own name, or in his own name and official character.
    Granting that he can rightfully control the sinking fund, he must sue in the name of “ the state of Mississippi.”
    
      The law prescribes his powers and duties, which is, to settle, collect, sue for, and pay into the treasury certain funds. This law is his letter of attorney. There must be some direct power inserted in it, or something so peculiar in its very nature as to require it, to authorize the attorney or agent to sue in his own name; or he can no more sue in his own name than can the agent of a private individual, who is authorized to sue for and collect the debts of his principal, can drop the name of his principal, and bring the suits in his own name. That there is any such direct power, or that the nature of the case is thus peculiar, it will not, we presume, be pretended, or if pretended, cannot be sustained.
    2. But we deny the authority of Mr. Young to control the sinking fund, in any manner whatever. The “management” of that fund, in the legal and common sense meaning of the term, “manage,” had been at its very creation vested in other persons. See Commissioners of the Sinking Fund„ v. "Walker, 6 How. (Miss.) R. 186, where the court defines the force and meaning of the word “manage,” in reference to this very fund.
    At the creation of the sinking fund, and before it had an existence, in fact, “ there was a legal conveyance of the sinking fund, to persons capable of holding it, for the use and benefit of the state in the extinguishment of a certain debt.” See same case, p. 187, and the tenth section of the Planters’ Bank charter; Statutes from 1824 to 1838, p. 243.
    By what right does Mr. Young sue for it, thenl We concede that it is a general rule, and may be the law of this case, when it is put in a position to apply it; that no trust will be permitted to fail for the want of trustees to execute it. But does it appear by the act of 1844, that this trust (the sinking fund) was failing for want of trustees to execute it, and therefore Mr. Young was appointed trustee 1 Does it so appear on the face of this record 1 If it does not so appear, putting the power of the legislature out of the question, then the declaration is bad, and the demurrer was rightly sustained.
    But granting that, between the record and the statute, it sufficiently appears, that the trust was failing for want of a trustee, and that Mr. Young was therefore appointed to execute it, where did the legislature get the power to make the appointment?
    We need not argue at this time of day, we presume, that the legislature has no such power. -
    The charter of the bank created a trust, and provided for trustees to execute it; conveyed, in the act creating the fund, the trust property to trustees who were thenceforth its legal managers. The act of 1844, to use the language of the syllabus in The Commercial Bank of Natchez v. Chambers et al., 8 S. & M. 9, “’created a limited agency.” The first by its terms created a trust; the látter by its terms proposed to do nothing more than to create “a suitable and competent agent,” with certain prescribed powers.
    If the legislature had intended to appoint a trustee, because the trust fund required such appointment, to prevent its failure, it would doubtless have recited in the act some of the facts that a skilful attorney would insert in a bill in chancery for that purpose*
    Therefore, as the act of 1844 is not good in form to convey this property to Mr. Young, and as there was a defect of power in the legislature so to convey it, even if the form were good, we must conclude that, all that portion of the act, out of which this case grows, is a misprint, or, perhaps; a mere oversight of the enlightened law-making power. .
    3. But if we go out of the record, to matters ■ which may exist in pais, what then would be the state of facts? We would first, certainly, find that one of the original trusteeg to whom the'sinking fund was conveyed, namely, the auditor of public accounts, was in being and perfectly able, and no doubt willing to execute the trust; at least he has never signified his inability to do so. That he is an existing, trustee, is judicially known to the court; and as to the other two trustees, we would probably find that their powers, by some peculiar legislation, have passed into the hands of one of the sets of trustees, to whom, by legislative enactments, have passed all the interest and authority that the president and cashier of the bank had over the subject matter of this suit. Or, if we should find as to them, that their powers as trustees have been destroyed by the state, and not preserved to anyone else, then the auditor either has full powers as surviving trustee to execute the trust; or if not, it is his duty to apply to the chancellor for such power as will enable him to do it.
    
      A. J. Paxton, on same side.
    1. The sinking fund is a collateral security pledged to the payment of the accruing interest on two millions of dollars (state bonds) and to $ 250,000 of the principal, vested in trustees responsible to the parties interested, only through the courts of the country for the faithful discharge of their duties; the state is only rémotely and contingently interested in this fund, and the contract under which it was created she specifically denied to herself the right to apply it to any other purpose, and reserved only by implication a general right of legislation over it as over the property of any individual in the community.
    The legislation on this subject is maintained on the ground of state interest in the fund. I understand the rule of law to be that, when a state contracts with individuals, she places herself as it regards the contract on an equal footing with them. When a state takes stock in a bank, or becomes otherwise interested therein, the bank does not thereby become a public corporation, subject to,unqualified legislative control, but the state as a stockholder has no greater rights or powers than any individual stockholder. If she contracts even by voluntary donation with individuals, she cannot revoke, annul, or qualify, such contract, or any of its stipulations by virtue of her sovereign power. Such contract is as sacredly protected by the constitution of the United States from violation by subsequent legislation as is any contract between individuals merely. Fletcher v. Peck, 2 Cond. R. 308 ; Commercial Bank of Natchez v. Chambers et al., 8 S. & M. 9; Angelí & Ames, 23, 24, 25; Bank of the United States v. Planters’ Bank of Georgia, 9 Wheat. 904; Allen v. McKeen, 1 Sumner, C. C. R. 276.
    On this point Mr. Paxton further argued at length that the appointment of the state commissioner was divesting the rights of the commissioners of the sinking fund, who were in the office when their successor is appointed.
    
      2. In 1846 there was a partial failure of the trustees by the forfeiture of the Planters’ Bank charter, yet one of the trustees appointed under the original contract, (the auditor of public accounts,) continued in being, holding his title to the trust fund unaffected by the failure of his co-trustees; and the legislature had no better right to divest his title to the fund than they had to divest that of the three holding jointly. Whether he had or not the power to act alone in the administration of the trust, I do not consider it important to inquire at this time.
    3. But admit that, by the failure of the president and cashier of the bank, the title of the auditor to the fund, and his character as one of the commissioners of the sinking fund, also expired; it presents merely the ordinary case of a trust without a trustee to execute it, and the remedy to the parties interested is to be found only in a court of chancery. If it was strictly a public trust, the legislature might appoint the trustee, or confer the right of appointment on an executive officer. But we have seen that the state had no such interest in the fund as to make this a public trust, and the law and the appointment are still void, because of the usurpation by the legislature and executive of judicial powers.
    4. There is another view in which I would present this question. At the time of the passage of this law, a large amount of interest on, and $125,000 of the principal, of these bonds was due and unpaid. The state was discredited to that extent. This fund was derived wholly from the sale of the bonds, it was, by the contract, under which the bonds were sold, specifically pledged to the payment of the interest and the two first instal-ments of the principal debt. It wa,s, as we have seen, merely collateral to the principal liability of the state, as evidenced by the bonds. The commissioner is directed by the law to pay the amounts collected into the state treasury, and this under heavy penal responsibilities. He does not even pay it in, nor is the treasurer required to place it to the credit of the bond holders. The collateral security has fallen into the hands, not of the creditor but of the debtor. What is the effect of this? The security is extinguished. Iu plain terms, the state has confiscated the sinking fund. Her creditors had originally the state bonds, the highest evidence of the state debt; they had numerous legislative resolves declaring the validity of their demands; they had a collateral security to which they could resort, and through the courts of the country coerce by execution, the payment of their demands to the extent of the security. What have they now? They have the bonds, a little older it is true, but none the better for their advanced age; they have a few more legislative resolves and gubernatorial messages, but by omnipotent legislation the tangible security which was once within their grasp, is transformed into another “pledge of the faith of the state.” What remedy have they against the state? A mere shadow. They may sue the state by bill in chancery. The chancellor may declare their rights in the form of a decree of his court, but they can have no execution upon it. They must go again to the legislature with their decree. They have established by a decree of the chancery court, what the legislature never denied, and there the remedy ends. The money cannot be paid from the treasury except in pursuance of an appropriation made by law.
    5. The act of the 4th of March, 1848, passed subsequent to the filing of the record in this court on the appeal, cannot affect this decision; but if so, it is itself void. It assumes to the legislature judicial powers, in determining the priorities of the creditors as amongst themselves, and is thus liable to objection on constitutional grounds. It is, moreover, wholly impracticable and unavailing when taken in connection with the condition of the bonds. It authorizes the payment of the “coupons ” only. The plan and form of the bonds and the contract of sale, and term, “ coupon,” implied that the coupons should be cut from the bond and presented separately for payment, and the bond holders have accordingly-cut all the coupons from the bonds. The law, however, provides that no coupon shall be paid “unless the same is presented attached to the bond, and cut from the bond by the slate treasurer.” Thus this law, apart from constitutional objections, may be safely held as of no effect, and not one dollar of this' fund can ever be paid to the holders of the bonds as coupons, without further legislation on the subject, and must be expended for general state purposes or remain locked in the treasury, instead of being paid to those entitled, or increasing at the rate of ten per cent; per annum, as originally contracted.
    Hutchinson, in reply,
    Filed an argument of great length, reviewing the positions assumed by Mr. Paxton; and contended that they were not sustained by principles of law or common sense. He relied upon the case of the Commissioners of the Sinking Fund v. Walker, 6 How. 143, cited on the other side, as settling the law of this case, and conclusive upon the right's=of the parties.
   Mr. Justice Clavton

delivered the opinion of the court.

This was an action founded upon a note executed to the commissioners of the sinking fund for money loaned. There was a general demurrer to the declaration, which was sustained, and judgment rendered for the defendant, in the court below. The case then comes by writ of error to this court.

The sinking fund had its origin in the charter of the Planters’ Bank, by which the governor was required to subscribe for ten thousand shares of the stock in behalf of the state, and to issue bonds therefor. By the 10th section of the charter a portion of the dividends accruing upon the stock belonging to the state, was directed to constitute a sinking fund, under the management of the auditor and the president and cashier of the bank, for the redemption of the state bonds issued to obtain money to pay for the stock subscribed by the state. The fund received subsequent accessions from other sources, but the same character adheres to it in all its changes. .

Some of the positions assumed in the argument have already received the determination of this court, in the case of the Commissioners of the Sinking Fund v. Walker, 6 How. 143. In that case, after a very elaborate argument, four points were resolved r 1st. That the state, by legislative enactment, could appoint trustees. 2d. That the plaintiffs in that case were competent to act. 3d. That a trust was created by the section of the charter before cited; and 4th. That the trustees could sue at law, on a contract made by them in discharge of their legislative functions. Had the present suit been brought by the original commissioners of the sinking fund, the whole case would be covered by this decision.

By subsequent legislative enactments, the management and control of this fund were vested in a person styled the state commissioner. The powers granted to him are quite as comprehensive and ample as those given to the first commissioners. But it is now urged, that the state could not change the trustees without the consent of' all the persons interested in the fund, though it is conceded that such change might be made with such consent.

The consent of the state has been manifested by the act itself; the consent of the trustees has been equally manifested by their surrender of the funds, and of this note, among the rest, into the hands of the new trustee. There had been no formal conveyance of the legal title in the fund to them, and none consequently was necessary from them. A legislative grant is the highest evidence of title, when the' legislature has power to make title. Grignon’s Lessee v. Astor et al., 2 How. S. C. R. 344. A surrender of the grant to the grantor revests the title in him. When the whole beneficial interest in the trust estate is vested in an individual, he may appoint a‘new trustee. Hill on Trustees, 188. If he fails' to do it, a court of chancery would compel him. '

Had any one else than the state, either the bond holders or the debtors to the fund, any interest which could prevent the exercise of this power by the state 1 The fund belonged to the state, and was expressly excepted out of the operation of the Briscoe bill. Acts of 1843, p. 54, sec. 5. The trustees were originally appointed without the assent of any third party. The bond holders'had nothing to do with their creation, and if they have any direct interest in the fund, it can only be protected or enforced in a court of equity. Upon a vacancy in the office of the trustees, the party which made the original appointment made another trustee. 'We are authorized to infer a vacancy from the fact, that the former trustees made no objection to the change. It was a high duty upon the part of the state, to see that the trust was executed, and so far from the appointment being matter of objection, the state would not have redeemed the faith which It had pledged, if it had permitted the trust to fail, by reason of the want of a trustee. If there were a trust in favor of any one but the state, then the state itself, after the vacancy in the trusteeship, became in its corporate capacity the trustee. It was its duty to provide for the execution of the trust, and it has but performed this duty in the course it pursued. No one could object but the cestuis que trust. They could only do so in a court of equity, and there probably only for an improper exercise of the power of appointment. There was no trust for the'debtors to the fund.

Then if the state commissioner be the trustee, as the successor of the former commissioners, and clothed with the legal title, can he proceed with the suit? The statute creating the office of state commissioner authorizes him to collect and receive all the effects belonging to the fund, and to manage the same, and to compel and coerce payment and settlement by suit or otherwise. These terms are quite as comprehensive as those employed in the charter of the bank, and'quite as sufficient to convey the legal title. We think they had that effect, and that the state commissioner is fully, authorized to sue for and collect the debts due the fund. We do not entertain the slightest doubt, but that payment to "frim would be a valid discharge of the debt, and the defendant be thereby fully protected.

We cannot perceive that the principles in the case of Allen v. McKeen, 1 Sumn. 276, cited in argument, have any application here. The original trustees are not before the court; they set up no claim, and they acquiesce without a murmur in the action of the.legislature. The debtors certainly have no vested right to retain the fund.

The judgment is reversed, and the cause remanded for further proceedings, in accordance with this opinion.

Judgment reversed.

Mr. Chief Justice ShaRkey, being interested, gave no opinion.  