other special dividends which may be made upon collaterals held hereunder. 66 66 The stamp required upon this promissory note is easily determined, the law being that upon promissory notes a stamp is required of the value of 2 cents for a sum not exceeding $100, and for each $100 or fractional part thereof in excess of $100 2 cents. The paper following the note presents two phases: In the first place, it is a pledge of certain specific personal property described therein, as security for the payment of the promissory note for $100,000. It therefor requires a stamp as a pledge of personal property for the payment of a definite and certain sum of money, to wit: the sum of $100,000. The actual value of the 1,000 shares of Chicago and North western Railway common stock, which is deposited and pledged, is not stated, but if it were it would not be material, for the stamp required upon a mortgage or pledge of property given to secure the payment of a definite and certain sum is governed by the sum secured to be paid, and not by the actual value of the property included in the mortgage or pledge. For instance, if A borrows from B$5,000 and gives a note for it to B, and at the same time executes a mortgage or pledge as security for its payment upon property worth $50,000, the stamp upon the mortgage or pledge would not be estimated by the actual value of the property, but by the amount secured to be paid, as set forth in the face of the mortgage or pledge. So then the note for $100,000 and the paper executed in conjunction with it, pledging the stock described as security for the payment, do not, so far as I can see, present any difficulty in arriving at the stamp required to be placed thereon under the provisions of the war-revenue act. As before stated, in the first place, the one thousand shares of railroad stock are deposited and pledged to the Northern Trust Company as security for the payment of the above and foregoing note, meaning the note for $100,000. Then follows the stipulation in these words: "and all other liabilities of the undersigned to said trust company, or its assigns heretofore or hereafter contracted." This presents the second phase of the instrument, and is the one from which the principal question arises. The provision of the war-revenue act is that a mortgage or pledge of property made as security for the payment of any definite and certain sum of money, lent at the time or previously due and owing, or forborne to be paid being payable shall be stamped, etc. * * * The stipulations in the instrument, aside from those which make it a pledge for the payment of a definite and certain sum, are in the nature of a guarantee for unliquidated debts or for liabilities to accrue in future. There is no definite or certain sum stated in the instrument except as to the $100,000 note, for which the property stands pledged. In this respect the instrument may be treated not as a pledge as contemplated in the war-revenue act, but as an agreement that certain collateral held by the bank shall be held as a basis of credit to the owner, or to meet liabilities depending upon the happening of future contingencies. The property thus deposited and held by the bank may or may not become liable as security for a debt of the owner, or it might, in the business dealings of the owner with the bank, be considered one day as collateral security and another day it would not, for the status of his account could, by deposits or credits, be changed from that of debtor to creditor within a day or even within an hour or less time. It seems, of course, that the instruments or agreements like the one under consideration are made to the bank by patrons and depositors with the view of obtaining credit, and of constituting security to the bank through the means of property held by the bank for the repayment of overdrafts or other indebtedness or liability which may be incurred, but as long as the depositor or patron has funds in bank to meet his checks or drafts, or does not incur liability to the bank by note or other evidence specifying indebtedness, the bank could not hold any security that he had deposited with it under the terms of this paper. It is only when the contingency arises under the terms of the stipulation or agreement that the property deposited with the bank can be held. Before the provisions of the war-revenue act would apply the amount of the indebtedness must be liquidated and rendered certain, and in order to require a stamp upon the paper which pledges the property for the amount of the debt thus rendered certain, the amount for which the property is pledged must be definitely set forth in the face of the pledge itself, or the instrument pledging the property as security should accompany the note or evidence of debt, the payment of which it is intended to secure. I am unwilling to construe a paper like the one we are considering as of such character as to require a revenue stamp. Take a case like this: Suppose a man, who has valuable securities, such as Government bonds, etc., desires to obtain credit at a bank; he goes to the bank and deposits these securities as a basis of credit, and he stipulates, as in the case under consideration, that if at any time he should fail to pay any debt he owes the bank, either by note, overdraft, or otherwise, that the bank may hold this property, and, under certain conditions, may sell it to make good the owner's indebtedness. This does not constitute a pledge of property for the payment of a debt such as is contemplated by the act in question. The law does not say that all mortgages and pledges of property shall require a stamp, but only such mortgages and pledges as are made to secure the payment of definite and certain sums of money loaned at the time, previously due and owing, or forborne to be paid, being payable. Mortgages or pledges are sometimes given for indemnity where persons become surety upon official bonds. It is frequently the case that the principal will execute a mortgage or pledge of property to his surety to indemnify him against loss on account of the conduct of the principal. Such mortgage or pledge is not for the security of any sum until the official shall make default and the amount of his default shall be ascertained. Consequently, such instruments do not require a stamp when they are executed, because they are not to secure the payment of a definite and certain sum, but the sum which they are to secure is dependent upon a contingency which may never happen. The same in case of these deposits. The owner of the property deposited may never become liable to the bank. He may not make an overdraft or become otherwise indebted to the bank, and if he does, as before stated, how is the amount of the stamp to be determined when the paper itself states no definite or certain sum? Certain instruments and papers are required by the provisions of the war revenue act to be stamped. Still, if a man does not make the instrument or paper, he is not taxed by the law. Promissory notes are required to be stamped, and yet if a man borrows money and does not give a note he does not have to bear the burden of a stamp. So it is as to a lease or agreement made for the renting of land. If it is made in writing it has to have the stamp; but one may rent land by parole, and if he does of course there is no stamp, because the instrument required to be stamped is not executed. And numbers of other cases might be instanced of the same character. I hold, therefore, that a paper or instrument like this one, stipulating that certain securities or other property shall be held as indemnity or as a basis of credit or a guaranty generally, without specifying particular property as security for the payment of a definite and certain sum, is not liable to tax under the provisions of the war revenue act. I can not agree to the proposition that the paper or instrument under consideration, in addition to being a pledge of property for the payment of debt, is also to be construed as a power of attorney and stamped as such. A power of attorney is an instrument by which the authority of one person to act in the place and stead of another as attorney in fact is set forth. The language of this instrument does not constitute the party holding the property as security the attorney in fact of the owner. It only authorizes the holder in case of default to make the securities available for the purposes for which they were deposited, and in order to do this authority to sell and to transfer, etc., are given. This is not a power of attorney. It is only a necessary element of the instrument in order that it may be utilized to the end that it was executed. I do not think it necessary to consider the second instru ment or paper submitted, the question involved in it being substantially the same as the one I have discussed. Respectfully, VOLUNTEER ARMY-APPOINTMENTS OFFICERS. When an organization of State militia, with regimental and company officers bearing commissions from the governor of the State in which organized, is received as a body into the service of the United States under the provisions of the act of April 22, 1898, the officers so commissioned and recognized by the military authorities of the United States remain in their several grades until vacancies contemplated by the law occur, and can not be removed at will by such governor. DEPARTMENT OF JUSTICE, September 26, 1898. SIR: I have the honor to acknowledge receipt of yours of the 25th of August, ultimo, in which you submit for my opinion the facts relating to the captaincy of Company A, in the Fifth Missouri National Guard Regiment, a regiment of Missouri State militia which was accepted into the United States Volunteer Army on the 16th day of May, 1898, and you ask my opinion as to whether Charles F. O'Brien or Charles M. Howells should be recognized by the War Department as the legal captain of the said company. The facts, as I gather them from the the papers and correspondence on file in this case, are that in the month of April, 1898, after the first proclamation of the President calling for troops for the war with Spain, a regiment of militia was organized in the State of Missouri as the Fifth Regiment of Missouri National Guards. The regimental and company officers of this regiment were commissioned by the governor of the State as such, and according to their several grades, on or about the 30th of April, 1898, and 7843-VOL 22, PT 1————15 |