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U.S. Supreme Court

Amy v. Shelby County Taxing District, 114 U.S. 387 (1885)

Amy v. Shelby County Taxing District

Submitted January 8, 1885

Decided April 18, 1885

114 U.S. 387


When a person owing taxes to a municipal corporation becomes the owner of obligations of the municipality which are by law receivable in payment of its taxes, the extinguishment of the tax and the debt is clearly within the doctrine of setoff of mutual obligations.

A state law authorizing a debtor of a municipality to procure the obligations of the municipality and use them as a setoff for his own debt is not liable to constitutional objection as divesting creditors of the municipality of vested rights, or as impairing the obligation of contracts.

Page 114 U. S. 388

The act of the Legislature of Tennessee of March 23, 1883, authorizing municipal corporations and taxing districts to compromise their debts by the issue of new bonds at the rate of fifty percent of the principal and past due interest, and providing that the acceptance of the compromise shall work a transfer of the creditor's debt with a right to the municipality or district to enforce it, and the act of the same date providing that such new bonds and their matured coupons shall be received in payment of back taxes at the same rate as the bonds known as the Flippin bonds, did not divest the holders of unpreferred debts of the City of Memphis of any rights conferred upon them by the previous legislation set forth or referred to in Meriwether v. Garrett, 102 U. S. 472, and violated no provision of the Constitution of the United States in those respects

This was a bill in equity filed in a state court of Tennessee by the plaintiffs in error as plaintiffs below to have rights secured to them which were alleged to be invaded by legislation of that state referred to in the opinion of the court. A decree was rendered dismissing the bill, which decree was affirmed by the supreme court on appeal. The plaintiff below sued out this writ of error to review the latter judgment. The facts which make the federal question are stated in the opinion of the Court.

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