Internal Revenue-Claims for Refund on Stamps. 1871, a deed was executed by the Atlantic and Lake Erie Railway Company, conveying its property to a trustee, in trust, to secure the payment of certain coupon-bonds, which, at that time, it purposed to issue. The deed was stamped at the rate of one dollar for each and every thousand dollars of the proposed bonds, and was delivered to the trustee and duly recorded. None of the bonds described in the deed were ever issued, but the company canceled both the trust-deed and the bonds, and, in lieu thereof, a new trust-deed and new bonds, of another description, were executed and delivered." And the question is, whether this case falls within the provision of section 3426, Revised Statutes. The trust deed first mentioned was intended to be a security for money loaned to the company, of which loan the bonds set forth in the deed, when issued, would be the evidence. This was its sole purpose. Until the bonds were issued, the deed, though delivered, was of no force or significance. It conveyed no interest to the trustee or anybody else. It had no vitality. There was certainly no necessity for stamping the paper, for it had not yet come into life as a conveyance. The action of the company in stamping, delivering, and recording it, was premature. Error or mistake was discovered in the transaction, and both deed and bonds were canceled. Now, the conveyances which the law of 1864 required to be stamped were such as conveyed some interest, or for which some consideration was given, and the stamp was a tax upon the value of the interest conveyed, or upon the amount of money borrowed, in case of a mortgage or a deed of trust made for the security of a loan. But this paper was a nullity; it conveyed nothing, it secured nothing. I am of opinion, therefore, that the case is fairly within the words and intent of section 3426, Revised Statutes. The stamps were "through mistake unnecessarily used, and the rates or duties represented by them were paid in error." And I think it is a case for an allowance by the Commissioner, unless the claim is barred by section 3228, according to the view thereof above expressed. I am, very respectfully, your obedient servant, Hon. B. H. BRISTOW, Secretary of the Treasury. Payment of Cotton-Claims at the Treasury. PAYMENT OF COTTON-CLAIMS AT THE TREASURY. The words "lawful owners," as employed in the 5th section of the act of May 18, 1872, chap. 1872, signify such persons as have a legal interest in the proceeds of the cotton or in any portion thereof; that is to say, first, the holders of the absolute legal title to the cotton at the time of its seizure; and, second, those who had possession in a representative capacity, with a lien for services or for advances and expenses. The claimant of a purely equitable interest, (i. e., one who can only claim through a trustee, the legal title being in the latter,) cannot, in general, be deemed the lawful owner within the meaning of the act. Exceptions hereto indicated. The executors or administrators of deceased lawful owners are their legal representatives; but these may also, under some circumstances, be the heirs or next of kin of such owners. It is not the duty of the Secretary, under said act, to decide between conflicting claims on equitable grounds alone; and in a coutest between a trustee and a beneficiary, the former is entitled to possession where the trust remains unexecuted and possession is necessary to enable him to execute it. In May, 1863, one H., a resident of Arkansas, being the owner of certain bales of cotton, sold and delivered the same to the Bank of Chattanooga, Tennessee, receiving therefor the price agreed upon. Afterward these bales, (the name of the cashier of the bank being marked thereon,) while in his possession, were unlawfully seized by the agents of the United States, sold, and the proceeds turned into the Treasury. By a law of Tennessee, in force at the time of the sale, banks of that State were prohibited from using or employing any of their moneys in trade or commerce: Held that, notwithstanding said law, the purchase was valid as between H. and the bank, and consequently that, as between them, the latter was lawful owner of the cotton when seized. However, assuming that the purchase in that case, although in the name of the bank, was in fact made by the bank (not with its own funds, but) with the funds of a third party, or with funds belonging to the estate of a decedent, the ownership of the cotton was in the estate or party with whose money it was bought. The seizure of cotton by an authorized agent of the Treasury Department does not raise a conclusive presumption that the proceeds thereof went into the Treasury. DEPARTMENT OF JUSTICE, SIR: I have considered attentively the subject of your communication of August 20, 1874, in which you request my opinion upon certain questions having reference to the practical administration of the 5th section of the act of Congress o May 18, 1872, (17 Stat., 134.) Payment of Cotton-Claims at the Treasury. The act provides that the net proceeds of "all cotton seized after the 30th day of June, 1865, by the agents of the Govern. ment unlawfully, and in violation of their instructions," shall be paid directly to the "lawful owners" of said cotton or to their legal representatives. You ask, first, "Who are to be deemed the lawful owners, or what constitutes lawful ownership under the act ?” The statute is a remedial one. It provides a summary process, for those who claim to have been the owners of the cotton, to reach the proceeds of it, to wit, direct application to the Secretary of the Treasury. He is made the final judge and executor of the law, and there is no appeal from his decision. It was evidently the intention of Congress that the Secretary should pay over the proceeds to those who have a legal right to the immediate possession of them. They are the lawful owners intended by the act who have a legal interest in the proceeds or any portion of them. And by this I mean, primarily, the holders of the absolute legal title to the cotton at the time of its seizure; and, secondly, those who had possession in a representative capacity, with a lien for services or for advances and expenses. I refer to the case of The United States vs. Villalonga, on appeal from the Court of Claims. In this case, it has been held by the Supreme Court, at its present term, that "the owner spoken of in the 3d section of the captured and abandoned property act having a right to the proceeds thereof is he who has the legal interest in those proceeds, and a factor who made advances before the capture can at most recover only to the extent of his lien." The court decides that the holder of the legal title is the "owner" entitled to the proceeds of the property under the act of March 12, 1863, but does not exclude the lien-holder from the benefit of its provisions. Secondly, you inquire, "Is the owner of a purely equitable interest a lawful owner within the meaning of the statute ?” By the owner of a purely equitable interest, I understand one who can claim only through a trustee, the legal interest being in the latter; and, generally, I should say that the trustee is the lawful owner intended by the act; and yet, if the purpose of the trust has been entirely accomplished, as in case of an estate which has been settled, the debts all paid, Payment of Cotton-Claims at the Treasury. and nothing remains but that the heirs or next of kin should take the assets, I think these may well be considered the lawful owners, especially if it should appear that the administrator has been discharged. Third, "Who are to be deemed legal representatives of lawful owners?" I answer, that the legal representatives of deceased persons who were lawful owners are generally their executors or administrators, but may be their heirs or next of kin. (See 3 Opin., 29-43; 7 Opin., 60; Mrs. Stanton's Case, 4 N. & H., 456; Carroll's Case, 13 Wall., 351.) Fourthly, you inquire whether "it is obligatory upon the Secretary to decide between conflicting claims upon equitable grounds alone." Generally, I think, it is not. If I apprehend correctly the purport of the question, it is substantially covered by my answer to the second. In a contest between the trustee and the beneficiary, the former is entitled to possession if there remains in him any real living interest; if he has, in other words, any duty to perform under the trust, and possession is necessary to enable him to execute it. I come now to consider your second series of questions, which are based upon certain assumed facts or allegations of fact, as set forth in your letter. First. You ask, "Was the sale by Hamiter to the bank, being valid in other respects, rendered invalid or void by reason of the statute of Tennessee," hereinafter cited? And Second. "Who is the lawful owner of the proceeds of the cotton as between Hamiter and the bank?" These questions may be considered together. The facts upon which they are raised may be briefly stated thus: David Hamiter, of Sevier County, Arkansas, was the original owner of certain cotton. In May, 1863, he sold and delivered 104 bales thereof to the Bank of Chattanooga, and received therefor the price agreed upon. Afterward these bales of cotton, marked "Fulton," (the name of the cashier of the bank,) while in his possession, were unlawfully seized by the agents of the United States, sold, and the proceeds went into the Treasury. By the 5th section of the act of 1859-'60, passed by the legislature of the State of Tennessee, it is made Payment of Cotton-Claims at the Treasury. unlawful for the banks of that State "to use or employ any of their moneys * in trade or commerce." (1 Thompson & Stiger's compilation of the Stats. of Tennessee, p. 858.) Upon these facts, I am of opinion that the purchase by the Bank of Chattanooga was valid as between it and Hamiter. If in using its funds in the purchase of cotton the bank violated the law of Tennessee, it was answerable to that State, and might no doubt have been visited with such penalties as her laws provide. But having paid for and taken into its possession the cotton, without fraud alleged or suggested, the bank was the lawful owner as between it and Hamiter, the vendor. The contract was executed. It would be monstrous to hold that, after a fair sale of property, the price agreed on paid to the vendor, and a complete delivery by him, he might still turn round and claim title upon any pretense whatever. Thirdly. You inquire, "Assuming the purchase to have been in fact made with funds other than those of the bank, although in its name, will this circumstance defeat the title alleged to have been thus acquired, in view of the statute of Tennessee above cited?" I think the title to the cotton after its purchase was in the party with whose money it was bought, and that the statute of Tennessee may be laid entirely out of view. As an element in the case, I do not regard it as of any importance. Fourth. "Assuming the purchase to have been valid, but made with funds belonging to the estate of Benjamin Easley, to whom in that case do the proceeds belong, and who is entitled to demand and receive the same from the Secretary of the Treasury?" Upon the hypothesis stated, the cotton was the property of the estate of Easley; and if it should clearly appear that there are no debts of that estate, the administrator removed, and that there are no claimants showing a substantial interest in it except the heirs, they are the lawful owners, and entitled to the proceeds of the cotton. And, further, if it should be made clearly to appear by the adjudication of a local court of competent jurisdiction, and having jurisdiction of the parties, or if it is otherwise shown, that all interest in the property of |