text:
Burlington and Missouri River Railroad Company v. County of Otoe

ON certificate of division from the Circuit Court of Nebraska; the case being thus:

An act of the Territorial legislature of Nebraska, approved January 1st, 1861, enacted:

'That the commissioners of any county should have power to submit to the people of any county at any regular or special election, the question whether the county will aid or construct any road; and said commissioners may aid any enterprise designed for the benefit of the county as aforesaid, whenever a majority of the people thereof shall be in favor of the proposition as provided in this section.

'When the question submitted involves the borrowing or expenditure of money, the proposition of the question must be accompanied by a provision to lay a tax for the payment thereof, in addition to the usual taxes under section sixteen of this chapter; and no vote adopting the question proposed shall be valid, unless it likewise adopt the amount of tax to be levied to meet the liability incurred.'

This Territorial act being in force, the county cle k of Otoe County, one Bennett, issued the following call:

'In pursuance of the authority in me vested by law, I hereby call a meeting of the commissioners of Otoe County, to be held at their usual place of meeting in Nebraska City, of said county, on Saturday, the 24th day of February, A. D. 1866, to take into consideration the question of submitting to the people of said county the issue of the bonds of said county, not exceeding $200,000 in amount, to be used in procuring to said county an eastern railroad connection.

'ELISHA BENNETT,

'County Clerk.'

In pursuance of this notice, the county commissioners met and ordered an election to be held on the 17th day of March, 1866. The order for this election was as follows:

'It is ordered that an election be held on the 17th day of March, 1866, in and throughout the county of Otoe, N. T., for the purpose of ascertaining whether the commissioners of Otoe County shall issue bonds not to exceed $200,000, for the purpose of securing an eastern railroad connection for Nebraska City, N. T.'

An election was held accordingly, and at it 1362 votes were cast in favor of the said proposition, and 201 votes cast against it.

The Council Bluffs and St. Joseph Railroad Company having built a railroad from Council Bluffs, in Iowa, to St. Joseph in Missouri, near Nebraska City, $40,000 of the bonds of Otoe County, so as aforesaid voted for, were issued to it; the said bonds having been issued to secure an eastern railroad connection, and the same having been secured by way of St. Joseph and by way of Council Bluffs.

After this, that is to say, in February, 1867, Nebraska was admitted into the Union; and adopted a constitution of government. That constitution thus ordains:'The legislative authority of the State shall be vested in a General Assembly, which shall consist of a Senate and House of Representatives.

'The property of no person shall be taken for public use without just compensation.

'The credit of the State shall never be given or bound in aid of any individual association or corporation.

'For the purpose of defraying extraordinary expenses the State may contract public debts, but such debts shall never in the aggregate exceed $50,000.

'All powers not herein delegated remain to the people.'

This constitution being in force, the legislature of the State of Nebraska, on the 15th of February, 1869, passed 'An act to authorize the county commissioners of Otoe County to issue the bonds of said county to the amount of $150,000 to the Burlington and Missouri River Railroad Company, or any other railroad company running east from Nebraska City.' The Burlington and Missouri River Railroad Company, here named, was a foreign corporation; one incorporated by the State of Iowa. The act of the Nebraska legislature was in these words:

'WHEREAS the qualified electors of the county of Otoe, and State of Nebraska, have heretofore, at an election held for that purpose, authorized the county commissioners of said county to issue the bonds of said county in payment of stock to any railroad in Fremont County, Iowa, that would secure to Nebraska City an eastern railroad connection, to the amount of $200,000; and whereas but $40,000 have been issued.

'SECTION 1. Therefore, be it enacted &c., That said commissioners be, and they are hereby authorized to issue $150,000 of the bonds aforesaid to the Burlington and Missouri River Railroad Company, or any other railroad company that will secure to Nebraska City a direct eastern railroad connection, as a donation to said railroad company, on such terms and conditions as may be imposed by said county commissioners.

'SECTION 2. Said bonds, when so issued, are hereby declared to be binding obligations on said county, and to be governed by the terms and conditions of an act entitled 'An act to enable counties, cities, and precincts to borrow money or to issue bonds to aid in the construction or completion of works of internal improvements in this State, and to legal ze bonds already issued for such purpose,' approved February, A. D. 1869.'

On the 23d day of July, 1869, the board of county commissioners of Otoe County reciting that the people of the county had voted $200,000 in bonds, in aid of an eastern railroad connection, of which bonds there remained unappropriated over $150,000, passed a resolution to the effect that if the said Burlington and Missouri River Railroad Company would within a limited time named, build a certain road described (which it was stated the company proposed to build, upon the condition that Otoe County 'will donate and give to said company' $150,000 in the bonds above referred to); and if the said company would equip and work the said road as a through eastern connection, then the county commissioners would issue and deliver to the said railroad company $150,000 of the said bonds theretofore voted by the said county to such eastern connection; the resolution to operate as a contract between the county and the railroad company, if accepted by the latter within a time named. The resolution was accepted by the railroad company. The Burlington and Missouri River Railroad Company within the time built and has ever since worked a railroad such as was contemplated.

In this state of things, on the 23d day of July, 1869, the county commissioners passed a resolution directing the county clerk to deliver to the railroad company the bonds with the coupons attached, which was by him accordingly done on the 27th day of September, 1869. There was no vote of the people other than that above mentioned authorizing the issue of said bonds to said company.

The Burlington and Missouri River Railroad Company sold and transferred the said bonds with the coupons attached, for value, and before maturity of any of the coupons, to the Chicago, Quincy, and Burlington Railroad Company, another foreign corporation, to wit, a corporation of Illinois. The coupons as they came due were detached from their respective bonds, but not being paid, that company sued the county of Otoe in the court below. On the trial the judges were divided in opinion on the two following questions, and the questions were certified and sent here for answers:

First. Whether or not the act of February 15th, 1869, authorizing the county to issue bonds in aid of a railroad outside of the State conflicted with the constitution of the State of Nebraska.

Second. Whether the county commissioners of Otoe County, under the act of February 15th, 1869, could lawfully issue the bonds from which the coupons in suit were detached, without the proposition to vote the bonds for the purpose indicated, and also a tax to pay the same, being or having been submitted to a vote of the people of the county as provided by the act of the Territorial legislature of Nebraska, approved January 1st, 1861.

Mr. G. B. Scofield, for the county:

1. By the constitution of Nebraska all power not delegated to the legislature remains with the people. For defraying extraordinary expenses, the State may contract a debt not exceeding $50,000. Building a railroad is not an extraordinary occasion; nor was the limit here observed.

2. The constitution of Nebraska ordains that 'the property of no person shall be taken for public use without just compensation.' Now persons may be properly taxed for the public benefit; that is to say, for the benefit of all. Private property, indeed, is then taken, but a compensation is received. When, however, their property is taken for the benefit of a private corporation, as in this case, it is taken without compensation. Certainly the property taken here by tax is, in view of the purpose to which it is applied, taken without any due process of law.

3. But if the preceding propositions were questionable, it seems unquestionable that no legislature can take one man's property to make a present of it-to give it by way of donation-to another man, or to a private corporation, which is but an aggregation of men. This has been judicially decided by respectable courts. Still less, if possible, can the legislature delegate to the small political divisions which exist under the names of counties, townships, cities, boroughs, &c., a power of this dangerous kind. The objects for which these small political divisions are brought into existence are quite different.

4. Finally, and above all, the railroad to be aided is wholly outside, not only of the county of Otoe, but of the State of Nebraska. It is a foreign corporation. No benefits local and peculiar arise to the county of Otoe from this railroad. The people of the county have no right to use it, except as all people everywhere have; that is to say, on paying for its use. Even the advantages set up as a justification for the tax are of a speculative kind.

Mr. J. M. Woolworth, contra.

Mr. Justice STRONG delivered the opinion of the court.


text: Talk:Burlington and Missouri River Railroad Company v. County of Otoe

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text:
Burlington and Missouri River Railroad Company v. County of Otoe/Opinion of the Court

The first question upon which the judges of the Circuit Court divided was whether the act of the legislature of Nebraska, approved February 15th, 1869, authorizing the county of Otoe to issue bonds in aid of a railroad outside of the State, conflicts with the constitution of that State.

Unless we close our eyes to what has again and again been decided by this court, and by the highest courts of most of the States, it would be difficult to discover any sufficient reason for holding that this act was transgressive of the power vested by the constitution of the State in the legislature. That the legislative power of the State has been conferred generally upon the legislature is not denied, and that all such power may be exercised by that body, except so far as it is expressly withheld, is a proposition which admits of no doubt. It is true that, in construing the Federal Constitution, Congress must be held to have only those powers which are granted expressly or by necessary implication, but the opposite rule is the one to be applied to the construction of a State constitution. The legislature of a State may exercise all powers which are properly legislative, unless they are forbidden by the State or National Constitution. This is a principle that has never been called in question. If, then, the act we are considering was legislative in its character, it is incumbent upon those who deny its validity to show some prohibition in the constitution of the State against such legislation. And that it was an exercise of legislative power is not difficult to maintain. No one questions that the establishment and maintenance of highways, and the opening facilities for access to markets, are within the province of every State legislature upon which has been conferred general legislative power. These things are necessarily done by law. The State may establish highways or avenues to markets by its own direct action, or it may empower or direct one of its municipal divisions to establish them, or to assist in their construction. Indeed, it has been by such action that most of the highways of the country have come into existence. They owe their being either to some general enactment of a State legislature or to some law that authorized a municipal division of the State to construct and maintain them at its own expense. They are the creatures of law, whether they are common county or township roads, or turnpikes, or canals, or railways. And that authority given to a municipal corporation to aid in the construction of a turnpike, canal, or railroad is a legitimate exercise of legislative power, unless the power be expressly denied, is not only plain in reason, but it is established by a number and weight of authorities beyond what can be adduced in support of almost any other legal proposition. The highest courts of the States have affirmed it in nearly a hundred decisions, and this court has asserted the same doctrine nearly a score of times. It is no longer open to debate.

Then what is there in the constitution of the State of Nebraska which denies this power to the legislature? There is no direct or express prohibition. General legislative power is vested in the legislature. None was reserved to the people of the State. There are, however, certain restrictions that may be noticed. The constitution declares that 'the property of no person shall be taken for public use without just compensation,' and it is earnestly contended that this prohibits the legislature from passing any laws in aid of the construction of a railroad that may result in the imposition of taxes. It is said that the act of February 15th, 1869, is taking private property for a public use without compensation. It would be a sufficient answer to this to say that a similar provision is found in the constitution of almost every State, the legislature of which has been held authorized to legalize municipal subscriptions in aid of railroad companies. It has never been held to prohibit such legislation as we are now considering. But the clause prohibiting taking private property for public use without just compensation has no reference to taxation. If it has, then all taxation is forbidden, for 'just compensation' means pecuniary recompense to the person whose property is taken equivalent in value to the property. If a county is authorized to build a court-house or a jail, and to impose taxes to defray the cost, private property is as truly taken for public use without compensation as it is when the county is authorized to build a railroad or a turnpike, or to aid in the construction and to levy taxes for the expenditure. But it is taken in neither case in the constitutional sense. The restriction is upon the right of eminent domain, not upon the right of taxation.

We find nothing else in the constitution of the State that can with any reason be claimed to restrain the power of the legislature to authorize municipal aid to railroads, or other highways. There is a clause that declares 'the credit of the State shall never be given to, or bound in aid of any individual association or corporation,' and another that ordains that the debts of the State shall never, in the aggregate, exceed $50,000, but these refer only to State action and State liability.

In view, therefore, of the organic law of the State, and of the decisions which have been made in regard to other similar constitutional provisions, both in the highest courts of the States and in this court, we think it cannot be doubted the legislature of Nebraska had authority to authorize its municipal divisions to incur indebtedness and to impose taxation in aid of railroad companies.

It is urged, however, against the validity of the act now under consideration that it authorized a donation of the county bonds to the railroad company, and it is insisted that if even the legislature could empower the county to subscribe to the stock of such a corporation, it could not constitutionally authorize a donation. Yet there is no solid ground of distinction between a subscription to stock and an appropriation of money or credit. Both are for the purpose of aiding in the construction of the road; both are aimed at the same object, securing a public advantage, obtaining a highway or an avenue to the markets of the country; both may be equally burdensome to the taxpayers of the county. The stock subscribed for may be worthless, and known to be so. That the legislature of the State might have granted aid directly to any railroad company by actual donation of money from its treasury will not be controverted. No one questions that in the absence of some constitutional inhibition the power of a State to appropriate its money, however raised, is limited only by the sense of justice and by the sound discretion of its legislature. If the power to tax be unrestricted, the power to appropriate the taxes is necessarily equally so. Accordingly nothing has been more common in the State and Federal governments than appropriations of public money raised y taxation to objects, in regard to which no legal liability has existed. State legislatures have made donations for numerous purposes, wherever, in their judgment, the public well-being required them, and the right to make such gifts has never been seriously questioned. As has been said, the security against abuse of power by a legislature in this direction is found in the wisdom and sense of propriety of its members, and in their responsibility to their constituents. But if a State can directly levy taxes to make donations to improvement companies, or to other objects which, in the judgment of its legislature, it may be well to aid, it will be found difficult to maintain that it may not confer upon its municipal divisions power to do the same thing. Counties, cities, and towns exist only for the convenient administration of the government. Such organizations are instruments of the State, created to carry out its will. When they are authorized or directed to levy a tax, or to appropriate its proceeds, the State through them is doing indirectly what it might do directly. It is true the burden of the duty may thus rest upon only a single political division, but the legislature has undoubted power to apportion a public burden among all the taxpayers of the State, or among those of a particular section. In its judgment, those of a single section may reap the principal benefit from a proposed expenditure, as from the construction of a road, a bridge, an almshouse, or a hospital. It is not unjust, therefore, that they should alone bear the burden. This subject has been so often discussed, and the principles we have asserted have been so thoroughly vindicated, that it seems to be needless to say more, or even to refer at large to the decisions. A few only are cited.

One other objection to the constitutionality of the act is urged. It is that it authorized aid to a railroad beyond the limits of the county, and outside the State. There is nothing in this objection. It was for the legislature to determine whether the object to be aided was one in which the people of the State had an interest, and it is very obvious that the interests of the people of Otoe County may have been more involved in the construction of a road giving them a connection with an eastern market than they could be in the construction of any road wholly within the county. But that the objection has no weight may be seen in Gelpcke v. Dubuque, and in Walker v. Cincinnati.

We conclude, therefore, that the act of the legislature of February 15th, 1869, is not in conflict with the constitution of the State.

The second question upon which the Circuit Court divided was 'whether the county commissioners of Otoe County could, under the act of February 15th, 1869, lawfully issue the bonds from which the coupons in suit were detached, without the proposition to vote the bonds for the purpose indicated, and also a tax to pay the same being or having been submitted to a vote of the people of the county, as provided by the act of the Territorial legislature of Nebraska, passed January 1st, 1861.'

This question we answer in the affirmative. If the legislature had power to authorize the county officers to extend aid on behalf of the county or State to a railroad company, as we have seen it had, very plainly it could prescribe the mode in which such aid might be extended, as well as the terms and conditions of the extension, and it needed no assistance from a popular vote of the municipality. Such a vote could not have enlarged legislative power. But the act of 1869 was an unconditional bestowal of authority upon the county commissioners to issue the bonds to the rail oad company. It required no precedent action of the voters of the county. It assumed that their assent had been obtained. That prior to 1869 the sanction of approval by a local popular vote had been required for municipal aid to railroad companies, or improvement companies, is quite immaterial. The requisition was but the act of an annual legislature which any subsequent legislature could abrogate or annul.

It must, therefore, be certified to the Circuit Court, first, that the act of February 15th, 1869, is not unconstitutional; and, second, that the county commissioners of Otoe County could lawfully issue the bonds from which the coupons in suit were detached, without any submission to a vote of the people of the county of the proposition to approve the bonds, or a tax for the payment thereof.

CERTIFIED ACCORDINGLY.

The CHIEF JUSTICE, Mr. Justice MILLER, and Mr. Justice DAVIS dissented from the opinion in this case.


text: Talk:Burlington and Missouri River Railroad Company v. County of Otoe/Opinion of the Court


text: Olcott v. The Supervisors of the county of Fond du Lac


text: Talk:Olcott v. The Supervisors of the county of Fond du Lac


text:
Olcott v. The Supervisors of the county of Fond du Lac/Opinion of the Court

ERROR to the Circuit Court for the Eastern District of Wisconsin; in which court Olcott sued the supervisors of the county of Fond du Lac, Michigan, upon certain county orders issued by the county February the 15th, 1869, in pursuance of an act of Assembly of the State, approved on the 10th of April, 1867, and entitled 'An act to authorize the county of Fond du Lac to aid the completion of the Sheboygan and Fond du Lac Railroad, and to aid the building of a railroad from the city of Fond du Lac to the city of Ripon.'

This act authorized the people of the county to vote upon the question whether they would aid the building of the railroads named; and provided, in case the vote should be in favor of granting aid, that 'county orders' should be issued as the roads should be completed. The sixth section of the act was thus:

'If, under the provisions of this act, the said county of Fond du Lac shall furnish the aid contemplated in this act, then the railroad companies, or their successors and assigns, shall transport wheat upon the said roads upon the following terms for ten years: Wheat by the car-load from the city of Fond du Lac, and from stations east thereof within the county of Fond du Lac, to the city of Sheboygan, at a price not exceeding five cents per bushel; and from the city of Ripon to the city of Sheboygan, at a price not exceeding seven cents per bushel; and from all stations between the cities of Fond du Lac and Ripon to Sheboygan, at a rate pro rata with the freight from Fond du Lac to Sheboygan; and the companies or corporations owning and building the said roads, their successors and assigns, shall make such arrangements between themselves as shall give full effect to the provisions of this section, and the rates of freight above limited shall also apply to the companies owning or operating the said roads over and upon all other railroads where said companies respectively run their cars for the transportation of freight.'

A vote was taken under the act, and was in favor of granting the aid. The county orders were accordingly issued in conformity with the act. They were all made payable to the Sheboygan and Fond du Lac Railroad Company, or bearer, and those now sued on had passed, bon a fide, into the hands of Olcott.

In 1870, that is to say, subsequent to the issue of these orders, though prior to the trial of this case in the court below, the Supreme Court of the State of Wisconsin, in the case of Whiting v. Fond du Lac County, held this act to be void, upon the ground that the building of a railroad, to be owned and worked by a corporation in the usual way, was not an object in which the public were interested, and therefore that the act in question was void, for the reason that it authorized the levy of a tax for a private and not a public purpose. The court there said:

'The question is as to the power of the legislature to raise money or to authorize it o be raised, by taxation, for the purpose of donating it to a private corporation. We held, in Curtis v. Whipple, that the legislature possessed no such power, and the conclusion in that case we think follows inevitably in this, from the principles stated in the opinion. The cases are not distinguishable, except in the single circumstance that the corporation here, to which it is proposed to give the money, is a railroad company in behalf of which the power of eminent domain has been exercised by the State for the purpose of enabling it to secure the land over which to build its road. . . . But though a railroad company may be, as to its capacity to assume and exercise in the name of the State the power of eminent domain delegated to it, so far a public or quasi public corporation, yet in all its other powers, functions, and capacities it is essentially a private corporation, not distinguishable from any other of that name or character. . . . The road, with all its rolling stock, buildings, fixtures, and other property pertaining to it, is private property, owned, operated, and used by the company for the exclusive benefit and advantage of the stockholders. This constitutes a private corporation in the fullest sense of the term. . . . And if we examine any book of authority on the subject, we shall find that such is and always has been the rule of the law as to the corporate character of such companies, notwithstanding the delegation of power of eminent domain, and their consequent subjection in a certain degree to public use and convenience. They are always classed among private corporations, such as banking, insurance, and manufacturing corporations, and corporations for the building of bridges, turnpikes, canals, &c. . . . Our conclusion, therefore, is that though a railroad company may possess this single exceptional corporate characteristic, it is, nevertheless, essentially a private corporation, coming fully within the operation of the principles laid down in Curtis v. Whipple, and that the taxation complained of cannot be sustained.'

The court below, in this case, held that decision to be binding upon the Federal courts, and charged that the act under which the orders were issued was void. Judgment having gone accordingly it was now here for review.

It may here be mentioned that by the constitution of Wisconsin, the legislature of the State has power to alter or repeal charters granted by it.

Mr. M. H. Carpenter, for the plaintiff in error:

First. Was the decision of the State court binding upon the court below? and,

Second. If not binding, was it correct in principle?

I. As to the first point.

1. A leading motive to the adoption of the Constitution was to make the people of all the States one people, for commercial purposes. This object was secured by two provisions of the Constitution; one providing that no State should make any law impairing the obligation of a contract; the other, that a citizen of one State might sue a citizen of another State in the courts of the Union. The Constitution was designed to secure results, and whatever defeats the design of the Constitution is unconstitutional. When the citizen of one State contracts with a citizen of another State, he acquires a constitutional right to have his contract construed and enforced by the Federal courts. Judicial power is the power to determine what are the rights and duties, respectively, of the parties to a particular litigation growing out of such of their transactions as the case involves; and this power the Constitution confers upon the court and denies to Congress. The decision must be the result of the opinions and judgment of the judges who pronounce it; and Congress cannot constitutionally say that the courts shall decide otherwise, nor can the courts decide otherwise without violating their constitutional duty.

The Jud ciary Act provides that the laws of the several States shall be regarded as rules of decision in trials at the common law, in the courts of the United States, 'in cases where they apply.' The question is where do they apply? In cases of contract, the law of the State in force when the contract was made forms part of the contract, and must be applied in the Federal courts in construing and enforcing the contract. A decision of the State court, made before the contract, settling the law of the State, is authority in the Federal court, without regard to whether it be sound or unsound in principle, because the parties must be presumed to have contracted with reference to it. But a decision made after the contract was entered into, forms no part of the contract; the parties did not contract with reference to such decision; and to hold it binding upon the Federal courts, is to deny to a foreign creditor his constitutional right to have the conscientious opinion and judgment of Federal judges upon his contract. It would be offensive for the Federal courts to say to the creditor: 'You may sue in our courts, if you fear the State courts are prejudiced against your claim; but we must decide as the State courts would, because we are bound by all the decisions they have made since you entered into the contract.'

The broad principle ought to be declared by this court, that no State court decision affecting the validity of a contract, made after the contract was entered into, is conclusive upon the Federal courts. All the decisions in this court are consistent with this principle, but the principle itself has not been expressly declared. Yet in no way can injustice to a foreign creditor be prevented but by planting the doctrine upon its proper foundation, and saying that decisions of the State courts pronounced subsequent to the contract are not conclusive upon the Federal courts. If they are, the machinery of a double judiciary, State and Federal, is a mockery and a snare.

2. The decision of the State court is not binding upon the Federal courts, because it was not declaratory of local law. It was based upon general reasoning, and upon the theory that aiding the construction of a railroad was not an exercise of the power of taxation, but taking the property of A. and giving it to B.

No particular provision of the State constitution or principle of local law was relied upon. The decision, if it be sound, invalidates the similar enactments of every State, and the acts of Congress granting aid to the Pacific Railroads. It is only where some principle of local law is declared by a State court that its decisions are binding upon the Federal courts.

The constitutions of Wisconsin and Illinois are precisely alike in this respect. The Supreme Court of the latter State, since the decision of Whiting v. Fond du Lac County, has decided a similar case exactly the other way, fully considering the question and rejecting the entire reasoning of the court in Whiting's Case, and holding just such a statute valid under just such a constitution as that of Wisconsin, and enforcing obligations like those sued on in this case.

Now, suppose an action in the Federal court of Wisconsin, and one in the Federal court of Illinois, upon the contracts respectively, and both brought at the same term into this court. This court, if bound by such State decisions, would have to decide one case one way and the other the other way, while in every respect which ought to determine the cases they are identical. This would be a remarkable result to be worked out by the judiciary of a Union established especially to give uniformity to commercial law and commercial regulations. Then suppose a case in this court involving the constitutionality of the subsidies granted by Congress in aid of the Pacific Railroad. This court would undoubtedly hold, for that is the law, that the building of such a road is a proper work for the government, one in which the whole nation is i terested, and that such subsidies are valid. Now, in addition to the humiliation of three such decisions, reported, perhaps, in the same volume, it would logically result that this court had determined that after a citizen of New York had entered into a contract in Wisconsin with a citizen of that State, which was valid upon principle, and was not impugned by any decision of the State court, at the time it was entered into-a contract which the Federal court, a year after it was made, would have held valid-had been annulled and destroyed by a decision of the State court, made long subsequent to the contract, in a case to which the creditor was not a party, of which he had no notice, to which he had never assented, and which was wholly wrong in principle. It is submitted that after this the right of a foreign creditor to sue in a Federal court would not be very valuable.

3. This court has repeatedly decided that if a contract be valid by the law of a State as understood and administered by the different departments of the State government at the time the contract was made, no subsequent change of decisions by the State courts can render it invalid.

Prior to the making of the contracts in suit the State court had repeatedly settled all the principles necessary to sustain the validity of these contracts. That court had held that the power of taxation might constitutionally be exercised in favor of any enterprise in which the public had the least possible interest. It did so in Broadhead v. Milwaukee, and in Soens v. Racine. The constitution of Wisconsin forbids the taking of private property except for a public use; that is, a use in which the public are interested. In Robbins v. Railroad the court held that land might be taken for a railroad under the right of eminent domain, because such taking was for a public use. In Hasbrouck v. Milwaukee, the court sustained a tax to build a harbor on Lake Michigan, at Milwaukee, and based their decision upon the ground that such harbor was as much a matter of public interest as a railroad, and that it was well settled that taxation could be exercised to aid in the construction of a railroad.

To show how utterly at war with these decisions, made years before the contracts, is the decision in Whiting v. Fond du Lac County, holding that taxation in aid of the building of a railroad is not for a public object, and therefore void, let us condense the doctrine of the cases and see how the conclusions agree:

1st. A tax may be authorized by the legislature for any object in which the public have the least possible interest.

2d. The right of eminent domain can only be exercised in aid of an object in which the public have some interest.

1st. The power of taxation cannot be exercised in aid of the construction of a railroad, because the public have no interest in a railroad; and

2d. The right of eminent domain may be exercised in aid of the construction of a railroad, because the public have an interest in it.

The conclusions are obviously such as this court cannot assent to.

II. As to the second point. The decision of the State court in Whiting v. Fond du Lac County was erroneous.

1. Railroads are public highways. Upon no other ground can the right of eminent domain in favor of a railroad company, be vindicated. Therefore every decision sustaining this right, is an authority in favor of the power to raise money by taxation for that purpose; and such decisions have been made by all American courts, State and National.

2. There is no constitutional objection to raising money to give it as a donation to a railroad company, under the circumstances of this case, which do not exist to an act authorizing the municipalities to subscribe for stock and pay by taxation. Now, the Supreme Court of Wisconsin has decided in two cases, never reversed, tha such aid might be given.

3. The building of roads as a means of facilitating commerce, is a proper work of government; a subject clearly within the legislative power, and has been so regarded in every civilized nation from early times. The sixth section of the charter of this particular road tended directly to a public benefit.

Messrs. I. C. Sloan and J. R. Bennett, contra:

I. The question below arose upon an act of the legislature of Wisconsin; an act in its nature a private act. Now the highest court of Wisconsin had interpreted that act; had declared its meaning and effect. It had declared that the act authorized the levy of a public tax for a private purpose; in other words, that it took private property without compensation for a public purpose. Certainly this is an interpretation of a State act by the State court. And it is the established doctrine of this court that it will adopt and follow the decisions of the State courts in the construction of their own State constitutions, and statutes passed in pursuance of them, when that construction has been settled by the highest judicial tribunal of the State. Prim a facie, then, the Circuit Court did right to respect it.

Mr. Carpenter would argue that no decision-apparently, not even one by the highest court of the State, confessedly upon its own constitution and laws, and though not opposed to prior decisions in the State-should be regarded by this court if made after a contract has been entered into by a foreigner. But the risk of a decision upon an uninterpreted State constitution or law is what a foreigner may be as well asked to take as a citizen.

Mr. Carpenter, however, relies on four cases to show that the decision in Whiting v. Fond du Lac County was opposed to former ones. But what do they decide?

Brodhead v. Milwaukee decided that a State legislature might authorize a municipal corporation to raise money by taxation for bounty to volunteers to suppress an insurrection against the lawful government; in other words, perhaps, to repel a public enemy entering its own gates from sacking and burning it, and killing its citizens.

Soens v. Racine decided that the citizens of Racine were rightly taxed to improve a breakwater, which it was necessary to improve in order to stay the action of the waters of a lake and preserve the very soil of the city, and of course the buildings on it, from being washed away.

In Robbins v. Railroad it was held that private property might be taken by a railroad for its roadbed under an exercise of the power of eminent domain delegated by the State, and, of course, on compensation being made.

In Hasbrouck v. Milwaukee the citizens of Milwaukee were taxed to improve a harbor which the city, that is to say, which they themselves in their municipal capacity owned.

These were all cases of taxation for the direct and immediate benefit of the public.

The courts which decided them doubtless in their opinions used some general language; but this is but dictum. What were the facts? What were the cases? What the judgments? These, when the adjudications are cited for precedents, are the lawyer-like and pertinent inquiries. It will not do to sever the language of the court from the facts of the case before it, and to attempt to apply it to a different state of facts; facts where the object of the tax is to promote strictly individual, and to add to or to enhance the value of merely private, property. And particularly is this unallowable, when the power to tax for any private purpose was expressly denied in the opinions.

Still, therefore, Whiting v. Fond du Lac County was rightly held obligatory independently of its own merits. If so this case is ended.

II. But if it did not bind the Circuit Court technically it was correct in principle.

Cases are cited on the other side which decide that acts of legislature authorizing municipal corporations to subscribe for stock, and pay by taxation, are valid. But since, as before those decisions, the legality of permitting such corporations to engage in making railroads has been denied by the ablest jurists in this country, including notably Mr. Redfield; and when this power has been sustained in courts by the decisions, it has generally been by a much-divided court. But whether right or wrong is unimportant, for in Whiting v. Fond du Lac County the court was asked to go much further, and to hold that counties and towns might be taxed to pay for the stock subscribed for by others. It was asked to declare that the State might compel the people to make a donation to railroads in which they have no interest; that the State, under the taxing power, might transfer A.'s money to B. without an equivalent. Such an act is in violation of all our State constitutions, and of natural justice. The Supreme Court of Wisconsin declined to take this step, and held that it was unlawful to tax the people for such a purpose. And this appeal is brought to have this court in effect reverse that decision. We trust that it will not be reversed. It is maintained by weighty arguments given in the report of it. And the judgment of the court has been supported by the reasoning of the Supreme Court of Michigan in ''Ex rel. Howell v. Town Board of Salem''. The leading opinion in this case is delivered by Cooley, J., whose name is familiar in this court by his oft-cited and valuable work on Constitutional Limitations, and who has acquired a national reputation for learning and ability as a constitutional lawyer. We refer to his opinion at large as our best argument.

Mr. Justice STRONG delivered the opinion of the court.

Whether the act of Assembly of the State of Wisconsin, approved April 10th, 1867, under which the county orders or promissory notes sued upon, in this case, were issued, was a lawful exercise of constitutional power, is the only question in the case. In the court below, the jury was instructed, in substance, that the issue of the orders was unauthorized and void, and that the act of Assembly, above referred to, was an unconstitutional exercise of legislative power. No other question was made at the trial, and no other is now presented to us for our determination.

At the outset we are met by the fact that the Supreme Court of the State has decided the act was unauthorized by the constitution. It was thus ruled in Whiting v. Fond du Lac County. If that decision is binding upon the Federal courts, if it has established a rule which we are under obligations to follow, the matter is settled.

It is undoubtedly true in general, that this court does follow the decisions of the highest courts of the States respecting local questions peculiar to themselves, or respecting the construction of their own constitutions and laws. But it must be kept in mind that it is only decisions upon local questions, those which are peculiar to the several. States, or adjudications upon the meaning of the constitution or statutes of a State, which the Federal courts adopt as rules for their own judgments. That Whiting v. Fond du Lac County was not a determination of any question of local law, is manifest. It is not claimed to have been that. But it is relied upon as having given a construction to the constitution of the State. Very plainly, however, such was not its character or effect. The question considered by the court was not one of interpretation or construction. The meaning of no provision of the State constitution was considered or declared. What was considered was the uses for which taxation generally, taxation by any government, might be authorized, and particularly whether the construction and maintenance of a railroad, owned by a corporation, is a matter of p blic concern. It was asserted (what nobody doubts), that the taxing power of a State extends no farther than to raise money for a public use, as distinguished from private, or to accomplish some end public in its nature, and it was decided that building a railroad, if it be constructed and owned by a corporation, though built by authority of the State, is not a matter in which the public has any interest, of such a nature as to warrant taxation in its aid. For this reason it was held that the State had no power to authorize the imposition of taxes to aid in the construction of such a railroad, and therefore that the statute giving Fond du Lac County power to extend such aid was invalid. This was a determination of no local question, or question of statutory or constitutional construction. It was not decided that the legislature had not general legislative power; or that it might not impose or authorize the imposition of taxes for any public use. Now, whether a use is public or private is not a question of constitutional construction. It is a question of general law. It has as much reference to the constitution of any other State as it has to the State of Wisconsin. Its solution must be sought not in the decisions of any single State tribunal, but in general principles common to all courts. The nature of taxation, what uses are public and what are private, and the extent of unrestricted legislative power, are matters which, like questions of commercial law, no State court can conclusively determine for us. This consideration alone satisfies our minds that Whiting v. Fond du Lac County furnishes no rule which should control our judgment, though the case is undoubtedly entitled to great respect.

There is another consideration that leads directly to the same conclusion. This court has always ruled that if a contract when made was valid under the constitution and laws of a State, as they had been previously expounded by its judicial tribunals, and as they were understood at the time, no subsequent action by the legislature or the judiciary will be regarded by this court as establishing its invalidity. Such a rule is based upon the highest principles of justice. Parties have a right to contract, and they do contract in view of the law as declared to them when their engagements are formed. Nothing can justify us in holding them to any other rule. If, then, the doctrine asserted in Whiting v. Fond du Lac County is inconsistent with what was the recognized law of the State when the county orders were issued, we are under no obligation to accept it and apply it to this case. The orders were issued in February, 1869, and it was not until 1870 that the Supreme Court of the State decided that the uses for which taxation was authorized by the statute of April 10th, 1867, were not public uses, and therefore that the statute was invalid. Prior to 1870 it seems to have been as well settled in Wisconsin as elsewhere that the construction of a railway was a matter of public concern, and not the less so because done by a private corporation. That the State might itself make such an improvement, and impose taxes to defray the cost, or exercise its right of eminent domain therefor, was beyond question. Yet confessedly it could neither take property or tax for such a purpose, unless the use for which the property was taken or the tax collected was a public one. And it was also the undoubted law of the State that building a railroad or a canal by an incorporated company was an act done for a public use, and thus the power of the legislature to delegate to such a company the State right of eminent domain was justified. In Pratt v. Brown, it was said by the Supreme Court of the State that the incorporation of companies for the purpose of constructing railroads or canals affords the best illustration of the delegation of power to exercise the right of eminent domain, by the condemnation and seizure of private property for public use upon making just compensation therefore. It i admitted that the only principle upon which such delegation of power can be justified is that the property taken by these companies is taken for the public use. Similar language was used and a decision to the same effect was made in Robbins v. The Railroad Company. In Hasbrouck v. Milwaukee, a case where the right to tax for the improvement of a harbor was under consideration, the court used this significant language:

'The power of municipal corporations, when authorized by the legislature to engage in works of internal improvement, SUCH AS THE BUILDING OF RAILROADS, canals, harbors, and the like, or to loan their credit in aid thereof, and to defray the expenses of such improvements, MAKE GOOD THEIR PLEDGES by an exercise of the power of taxing the persons and property of their citizens, has always been sustained on the ground that such works, although they are in general operated and controlled by private corporations, are nevertheless, by reason of the facilities which they offord for trade, commerce, and intercommunication between different and distant portions of the country, indispensable to the public interests and public functions. It was originally supposed that they would add, and subsequent experience demonstrated that they have added vastly, and almost immeasurably, to the general business, the commercial prosperity, and the pecuniary resources of the inhabitants of cities, towns, villages, and rural districts through which they pass, and with which they are connected. It is, in view of these results, the public good thus produced, and the benefits thus conferred upon the persons and property of all the individuals composing the community, that courts have been able to pronounce them matters of public concern, for the accomplishment of which the taxing power might lawfully be called into action. It is in this sense that they are said to fall so far within the purposes for which municipal corporations are created, that such corporations may engage in, or pledge their credit for their construction.'

So also in Soens v. Racine, where the validity of a law authorizing a local tax to secure the lake shore was in question, the court discussed at length the nature of a public use for which taxation was lawful, and ruled that the use was a public one though only the property of some inhabitants of the city was saved, remarking that to determine whether a matter is a public or merely private concern we have not to determine whether or not the interests of some individuals will be directly promoted, but whether those of the whole or the greater part of the community will be. And again, in Brodhead v. Milwaukee, the court said: 'The legislature cannot create a public debt, or levy a tax, or authorize a municipal corporation to do so, in order to raise funds for a mere private purpose. It cannot, in the form of a tax, take the money of the citizen and give it to an individual, the public interest or welfare being in no way connected with the transaction. The objects for which the money is raised by taxation must be public, and such as subserve the common interest and wellbeing of the community required to contribute. . . . To justify the court in arresting the proceedings and declaring the tax void, the absence of all possible public interest in the purposes for which the funds are raised must be clear and palpable; so clear and palpable as to be perceptible by every mind AT THE FIRST BLUSH.'

All these expositions of the law of the State were made by its highest court before the county orders now in suit were issued. They certainly did assert tha building a railroad, whether built by the State or by a corporation created by the State for the purpose, was a matter of public concern, and that because it was a public use, the right of eminent domain might be exerted or delegated for it, and taxation might be authorized for its aid. It was the declared law of the State, therefore, when the bonds now in suit were issued, that the uses of railroads, though built by private corporations, were public uses, such as warranted the exercise of the public right of eminent domain in their aid, and also the power of taxation.

We are not, then, concluded by a decision, made in 1870, that such public uses are not of a nature to justify the imposition of taxes. We are at liberty to inquire what are public uses, and what restrictions, if any, are imposed upon the State's taxing power.

It is not claimed that the constitution of Wisconsin contains any express denial of power in the legislature to authorize municipal corporations to aid in the construction of railroads, or to impose taxes for that purpose. The entire legislative power of the State is confessedly vested in the General Assembly. An implied inhibition only is asserted. It is insisted that, as the State cannot itself impose taxes for any other than a public use, so the legislature cannot empower a municipal division of the State to levy and collect taxes for any other than such a use, and it is denied that taxation to enable the county of Fond du Lac to aid in the completion of the Sheboygan and Fond du Lac Railroad is taxation for a public use. No one contends that the power of a State to tax, or to authorize taxation, is not limited by the uses to which the proceeds may be devoted. Undoubtedly taxes may not be laid for a private use. But is the construction of a railroad by a company incorporated by a State for the purpose of building it, and endowed with the State's right of eminent domain, a thing in which the State has, as such, no interest? That the legislature of Wisconsin may alter or repeal the charter granted to the Sheboygan and Fond du Lac Railroad Company is certain. This is a power reserved by the constitution. The railroad can, therefore, be controlled and regulated by the State. Its use can be defined; its tolls and rates for transportation may be limited. Is a work made by authority of the State, subject thus to its regulation, and having for its object an increase of public convenience, to be regarded as ordinary private property?

That railroads, though constructed by private corporations and owned by them, are public highways, has been the doctrine of nearly all the courts ever since such conveniences for passage and transportation have had any existence. Very early the question arose whether a State's right of eminent domain could be exercised by a private corporation created for the purpose of constructing a railroad. Clearly it could not, unless taking land for such a purpose by such an agency is taking land for public use. The right of eminent domain nowhere justifies taking property for a private use. Yet it is a doctrine universally accepted that a State legislature may authorize a private corporation to take land for the construction of such a road, making compensation to the owner. What else does this doctrine mean if not that building a railroad, though it be built by a private corporation, is an act done for a public use? And the reason why the use has always been held a public one is that such a road is a highway, whether made by the government itself or by the agency of corporate bodies, or even by individuals when they obtain their power to construct it from legislative grant. It would be useless to cite the numerous decisions to this effect which have been made in the State courts. We may, however, refer to two or three which exhibit fully not only the doctrine itself, but the reasons upon which it rests.

Whether the use of a railroad is a public or a private one depends in no measure upon the question who constructed it or who owns it. It has never been considered a matter of any importance that the road was built by the agency of a private corporation. No matter who is the agent, the function performed is that of the State. Though the ownership is private the use is public. So turnpikes, bridges, ferries, and canals, although made by individuals under public grants, or by companies, are regarded as publici juris. The right to exact tolls or charge freights is granted for a service to the public. The owners may be private companies, but they are compellable to permit the public to use their works in the manner in which such works can be used. That all persons may not put their own cars upon the road, and use their own motive power, has no bearing upon the question whether the road is a public highway. It bears only upon the mode of use, of which the legislature is the exclusive judge.

It is unnecessary, however, to pursue this branch of the inquiry further, for it is not seriously denied that a railroad, though constructed and owned by a private corporation, is a matter of public concern, and that its uses are so far public that the right of eminent domain of the State may be exerted to facilitate its construction. But it is contended that though the purpose and the use may be public, sufficiently to justify taking private property, they are not public when the right to impose taxes is asserted. It is argued that there are differences between the power of taxation and the power of taking private property for a public use, and that because of these differences it does not follow that wherever the one power may be exerted the other can. We do not care to inquire whether this is so or not. The question now is whether if a railroad, built and owned by a private corporation, is for a public use, because it is a highway, taxes may not be imposed in furtherance of that use. If there be any purpose for which taxation would seem to be legitimate it is the making and maintenance of highways. They have always been governmental affairs, and it has ever been recognized as one of the most important duties of the State to provide and care for them. Taxation for such uses has been immemorially imposed. When, therefore, it is settled that a railroad is a highway for public uses, there can be no substantial reason why the power of the State to tax may not be exerted in its behalf. It is said that railroads are not public highways per se; that they are only declared such by the decisions of the courts, and that they have been declared public only with respect to the power of eminent domain. This is a mistake. In their very nature they are public highways. It needed no decision of courts to make them such. True they must be used in a peculiar manner, and under certain restrictions, but they are facilities for passage and transportation afforded to the public, of which the public has a right to avail itself. As well might it be said a turnpike is a highway, only because declared such by judicial decision. A railroad built by a State no one claims would be anything else than a public highway, justifying taxation for its construction and maintenance, though it could be no more open to public use than is a road built and owned by a corporation. Yet it is the purpose and the uses of a work which determine its character. And if the purpose is one for which the State may properly levy a tax upon its citizens at large, its legislature has the power to apportion and impose the duty, or confer the power of assuming it upon the municipal divisions of the State. And surely it cannot be maintained that ownership by the public, or by the State, of the thing in behalf of which taxation is imposed, is necessary to justify the imposit on. There are many acknowledged public uses that have no relation to ownership. Indeed, most public expenditures are for purposes apart from any proprietorship of the State. A public use may, indeed, consist in the possession, occupation, and enjoyment of property by the public, or agents of the public, but it is not necessarily so. Even in regard to common roads, generally, the public has no ownership of the soil, no right of possession, or occupation. It has a mere right of passage. While, then, it may be true that ownership of property may sometimes bear upon the question whether the uses of the property are public, it is not the test.

The argument most earnestly urged against the constitutionality of the act is that it attempted to authorize Fond du Lac County to assist the railroad company by a donation. It is stoutly contended that the legislature could not authorize the county to impose taxes to enable it to make a donation in aid of the construction of the railroad, even if its ultimate uses are public. But why not? If the county can be empowered to aid the work because it is a public use, what difference can it make in what mode the aid be extended? It is conceded that in Wisconsin municipal corporations may be authorized to become subscribers to the stock of private railroad companies, and to raise money by taxation to meet bonds given in payment of the subscriptions. This has been decided by the highest court of the State. And the reasons given for the decision are, not that the municipal bodies acquired property rights by their subscriptions, or that they thereby obtained partial control of the railroad companies, but that subscriptions to the stock were a mode of aiding a work in which the public had an interest, a work of such a nature that it might properly be aided by taxation. Never was the right to tax supposed to rest in any degree upon anything else. Whether the stock had value or not was not even considered. Equally with the taxation, the municipal subscription could be justified only because it was for a public use. If taxation is invalid because laid for a private use, the nature of the use cannot be changed by receiving stock for the money raised. There is no substantial difference in principle between aid given to a railroad company by subscription to its stock and aid given by donations of money or land. The burden upon the county may be the same in whichever mode the aid is given, and the uses promoted are precisely the same. And the courts have never attempted to make any distinction in the cases; certainly not until the case of Whiting v. Fond du Lac County, and even then no real difference is shown. On the other hand, the power to tax for the purpose of making donations in aid of railroads built by private corporations has been affirmed. We have, however, considered this subject in the case of the Railroad Co. v. County of Otoe, and nothing more need now be said. What we have already remarked is sufficient to show that in our opinion the act of the legislature of Wisconsin, approved April 10th, 1867, was a constitutional exercise of legislative power, and consequently that the Circuit Court erred in instructing the jury that it was unconstitutional and void, and in directing a verdict for the defendants.

JUDGMENT REVERSED, and the record remitted, with instructions to award

A VENIRE DE NOVO.

The CHIEF JUSTICE, Mr. Justice MILLER, and Mr. Justice DAVIS dissented from the preceding opinion.


text: Talk:Olcott v. The Supervisors of the county of Fond du Lac/Opinion of the Court


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Ex parte in the Matter of the United States

ON motion by the Attorney-General, for an alternative writ of mandamus directed to the Court of Claims, commanding the said court to hear and decide certain motions for a new trial in the case of Russell v. The United States (in which case the said Russell set up a claim for services of the steamer J. H. Russell, which he alleged had been impressed into the service of the United States during the rebellion), and for stay of payment of a judgment given by the said court against the United States in that case; or in default thereof to show cause to the contrary.

[This case was a continuation in another form of Ex parte Russell, where this court had occasion to consider the meaning of the act of June 25th, 1868, which enacts that the Court of Claims, at any time while any suit is pending before or on appeal from it, or within two years after 'the final disposition' of any such suit, 'may, on motion, on behalf of the United States, grant a new trial. . . and stay the payment of any judgment;' and where, on the same facts as are hereinafter stated, the Supreme Court held that the words 'final disposition' extend to a final disposition of any case before it, and that mandamus and not appeal was the proper remedy. The points involved in this case will be better understood by reading the report of the one.]

The rule nisi being granted, the chief justice and judges of the Court of Claims, in answer to the rule, submitted to this court the following statement of the facts connected with the motions specified in the rule, and the action of the Court of Claims and the judges thereof, in reference to the first named of the said motions; the said statement by them being dated April 24th, 1872, and signed by the whole five judges of the court.

'On the 1st of June, 1871, the Assistant Attorney-General of the United States filed in the said Court of Claims, on behalf of the defendants, a motion for a new trial in the case of Russell v. The United States, and assigned as a ground for the motion that fraud, wrong, and injustice had been done in the premises, in this: that for a part of the amount for which judgment had been rendered by this court in favor of the said Russell, his receipt in full had been found in the office of the Third Auditor of the Treasury, which receipt had come to the knowledge of the Attorney-General after the rendition of said judgment.

'On the 18th of September, 1871, he filed in the clerk's office of the court a specification of additional reasons for a new trial in support of the motion filed by him on the 1st of June, 1871, as aforesaid; one of which specifications indicated that, owing to a variance between the original depositions filed in the cause by the claimant and the printed copies thereof, upon which the judgment was rendered in favor of Russell, the said judgment was largely in excess of the amount which Russell should have recovered, as appeared from the actual evidence in the case, which variance had come to the knowledge of the Attorney-General after the rendition of the judgment in favor of Russell; and the other of the specifications averred that it appeared, from original receipts on file in the office of the Third Auditor of the Treasury, and from original reports on file in the office of the Quartermaster-General (copies of which receipts and reports were filed with the said specifications), that the steamer J. H. Russell was not seized or impressed into the service of the United States, as alleged by Russell, and as this court found, but was employed by the United States simply as a common carrier; and that Russell had been paid in full for the services of the boat during the time covered by the judgment; and that the said receipts and reports first came to the knowledge of the Attorney-General after the rendition of the judgment in favor of the said Russell.

'On the 22d of November, 1871, the said motion for a new trial having been argued on behalf of the defendants in support of it, and on behalf of the said Russell against it, before the court composed of Drake, Chief Jsutice, and Loring, Peck, and Nott, Judges, was submitted to the court.

'In conference thereon the said judges were equally divided in opinion; but the majority of them did not authorize any judgment to be entered in open court upon the motion; nor was any such judgment rendered.

'On the 11th of December, 1871, while the said motion was still pending in conference before the judges to whom it had been submitted, the Assistant Attorney-General filed a motion in open court to remand the said motion for a new trial to the law docket for a reargument; and on the 13th day of the said month, it was ordered by the majority of the court that a reargument of the motion for a new trial should be granted; whereupon Judges Peck and Nott dissented, and Judge Nott read in open court and placed on file the following opinion, giving reasons for their dissent:

"The defendants' motion for a new trial in this case was argued before and submitted to four of the judges of this court for their decision. It was also stated on the argument by the counsel for the claimant, and conceded by the counsel for the defendants, that the Supreme Court had affirmed the judgment of this court. Subsequently, and while the motion was still under advisement, an oral suggestion was made by the Assistant Attorney-General that the case be remanded and heard before a full bench, the only legal reason assigned being the decision of the Supreme Court affirming the judgment of this court. The counsel for the claimant objected, on the ground that the decision of the Supreme Court had been known and was announced on the hearing. The suggestion of the Attorney-General was not a motion, according to the rules of the court, but it was subsequently reduced to writing and filed.

"We are of the opinion on these facts that the final judgment of this court, affirmed by the Supreme Court, is property which cannot be taken away except by proceedings in due form of law, and that it should be protected by the full discharge of our judicial duty; that the four judges who heard the motion constitute a tribunal which can alone decide it, and that it is the right of the parties to have it decided by them; that the fifth member of the court, who did not hear it, and to whom it was not submitted, can take no part in its disposition; that the suggestion of the Assistant Attorney-General presents no legal or just ground for ordering a reargument; and that the defendants' motion for a new trial is unjust, inequitable, and contrary to the intent of both the statute and the common law, and it must be denied.

"We are also of the opinion that this decision, by a moiety of the four judges constituting the tribunal that heard the motion, and to which it was submitted, does, ipso facto, deny the motion, according to the constant and invariable practice of this court and of the Supreme Court; and that on its rendition an order should be entered by the court denying the motion.'

'On the 12th of December, 1871, the attorney of the said Russell produced in open court the mandate of the Supreme Court of the United States, affirming the judgment rendered by this court in favor of said Russell, and the same was ordered by this court to be placed on file.

'On the 29th of January, 1872, the said motion for a new trial came up before a full bench of this court for reargument, when a majority of the court decided, for the reasons stated in the following order entered on the record of the court, that the said motion should be dismissed, the Chief Justice and Loring, J., dissenting:


text: Talk:Ex parte in the Matter of the United States


text:
Ex parte in the Matter of the United States/Opinion of the Court

"In this case it was ordered that the defendants' motion for a new trial be dismissed for want of juris iction, because, since the same was made, the mandate of the Supreme Court has been filed affirming the judgment of the court in this case, and because two of the four judges before whom the motion was argued, and to whom it was submitted on the 21st of November, 1871, have heretofore rendered and filed their decision that the motion be denied upon the merits.'

'Since the making of this order no action has been taken by this court in reference to said motion for a new trial.

'The reasons assigned in said order against the jurisdiction of this court to hear and determine said motion, are the only cause which the majority of the court have to show why the alternative mandamus should not issue from the Supreme Court in this case.

'In regard to the motion for stay of payment of judgment in the case of said Russell, which was filed by the Assistant Attorney-General, on behalf of the defendants, on the 11th of November, 1871, no action has at any time been taken by this court in relation thereto, and it is now on the files of this court undecided. It was a motion to stay payment of the judgment pending the said motion for a new trial, and the Assistant Attorney-General has not heretofore called it up for hearing.'

Justices Peck and Nott, for themselves, gave these additional reasons against the rule:

'That the defendants, by voluntarily arguing their appeal in the Supreme Court, after having made their several motions in the Court of Claims, which they did not proceed to argue in apt time, and by allowing the Supreme Court to proceed to judgment thereon while their motions in the Court of Claims were still pending, were guilty of experimenting upon the decisions of both courts, in a manner prejudicial to the ends of public justice; and that the course pursued by them in the Supreme Court while their motions in the Court of Claims were still pending, must be deemed a withdrawal of those motions from the latter court. And that it was against the course of justice for the defendants to subject the claimant to the expense and risk of a needless trial in the Supreme Court.'

After argument by Mr. G. H. Williams, Attorney-General, for the motion, and Mr. William Penn Clarke, contra, the court, on the 6th of May, 1872, ordered a PEREMPTORY MANDAMUS to issue, commanding the Court of Claims to hear and decide the motions for a new trial.

On the 31st of August following, the claimant, Russell, filed in the Court of Claims a remittitur of $4000 of his judgment, being one of the sums on account of the allowance of which in the judgment of that court, the defendants moved for a new trial; and the remainder of his claim was paid at the Treasury.


text: Talk:Ex parte in the Matter of the United States/Opinion of the Court


text: United States Statutes at Large/Volume 1/3rd Congress/1st Session/Chapter 36


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Page:Lectures on Modern History.djvu/309

 in fourteen degrees, from the ensign to the marshal. A new aristocracy superseded the old, and the ancient nobles were forced to serve, in order to be somebody, when away from the ancestral home. They were important, not by their possessions or their descent, but by the position in which they stood towards the emperor. Peter had imbibed too much of the rationalism of the West to be a persecutor. He was severe with the schismatics, who existed only as opponents of change and enemies of civilisation; and as there were no Jews in Russia, he decreed that in future there should be none. But he built churches for the foreigners whom he brought into the country, and did not attempt to sustain the domination of the Muscovite clergy, who, like the English, professed passive obedience, but obeyed without approval. When the last patriarch was dying he expressed the wish that all men of other faith—Catholic, Protestant, and Mahomedan—should be burnt, and their places of worship levelled with the ground.

Peter's schemes of change were so tremendous that most Russians recoiled and wished them no success. His own family opposed him, and became a centre of plotting opposition. He repudiated his wife, and sent her to the seclusion of a convent. His second empress was a peasant woman, whose name was Martha, but was called, in Russia, Catharine. It was uncertain whether her husband was dead. It was certain that Peter's first wife was living. Nobody minded. But Alexis, the son of the earlier marriage, took the conservative side, and became, from 1711, the hope of those who rejected Peter's anti-national, cosmopolitan, chiefly Dutch and German system of reform. He longed for the Asiatic twilight of the past, and the discontented longed for him to succeed. Peter, seeing that he was a poor creature, wished him to resign his claim. Alexis fled, and placed himself under the protection of the emperor Charles VI. He was discovered in the castle of St. Elmo at Naples, and brought back to Russia, where he was condemned to death, and died of torture. The plan had been to return to the ancient


text:
Author:Horace Arthur Rose

Works

 * A Glossary of the Tribes and Castes of the Punjab and North-West Frontier Province. 3 volumes (1911–1919) (Scan: volume 2 only)
 * A Compendium of the Punjab Customary Law (1907)
 * The Darvishes; or, Oriental spiritualism (1927)
 * The Darvishes; or, Oriental spiritualism (1927)
 * The Darvishes; or, Oriental spiritualism (1927)
 * The Darvishes; or, Oriental spiritualism (1927)

title: Author:Horace Arthur Rose


text: United States Statutes at Large/Volume 1/3rd Congress/1st Session/Chapter 37


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Page:Lectures on Modern History.djvu/310

 ways, and to give Petersburg back to the Swedes, with the command of the coast. The clergy were mixed up in it, and Peter now secured himself against the Church. He had left the patriarchate vacant. He now abolished it, and divided its powers.

A kindred spirit had arisen, capable of carrying out reform in the Church, Procopovitch had become a united Greek, in order to be admitted to foreign universities. He studied in Rome, and in Germany he became familiar with Lutheran theology. He came back with much of the religious culture of the West, and Peter appointed him to one of the sees. The bishops protested. They said that he was a heretic seventeen times over. And they proposed, if they were not believed, that the matter should be decided by the three eastern patriarchs. It was a scheme to disconnect the Church from the State, to merge it in the Eastern Church. Procopovitch defeated his enemies, and drew up the plan by which the Church was brought under the civil power, much on the lines of Henry VIII. It was governed, thenceforward, by the Holy Synod, which was controlled by a great official who represented the emperor. The clergy ceased to be an obstacle. The government of the Church by the Synod was part of a plan of government by boards, which had been suggested by Leibniz. The empire was governed by a Senate of eight, of ten, at one time of twenty members. Under the Senate, which made laws, were ten ministerial departments, or boards, like our Treasury or Admiralty, which executed them. And there were eleven governors of provinces, each larger than a European monarchy. Men fit for such a responsiblityresponsibility [sic] could not be found in Russia, and the empire was badly governed. But it was there. The transformation was accomplished. And the gigantic force was centred in the hand of a tyrant.

The concentration was such, the destruction of resisting forces was so complete, that the machine worked well in the hands of women. For almost the whole of the seventy years after Peter's death, Russia was governed by empresses. The last of them, Catharine II., was one of


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Author:Frederick William Bussell

Works

 * Religious thought and heresy in the Middle Ages
 * The School of Plato: its origin, development and revival under the Roman empire
 * The Roman empire: essays on the constitutional history from the accession of Domitian (81 A. D.) to the retirement of Nicephorus III (1081 A.D.)
 * Songs of the West: folk songs of Devon & Cornwall

title: Author:Frederick William Bussell


text:
Cordova v. Hood

APPEAL from the Circuit Court for the Western District of Texas, on a decree dismissing a bill filed to enforce a vendor's lien. The case was thus:

On the 4th of March, 1859, B. G. Shields, by instrument of writing, 'bargained and sold to G. M. Hood' (both parties being of Texas) a tract of land in that State, described, 'for the sum of $27,000, to be paid by the said Hood as follows.' Certain drafts and notes to be given by Hood were then specified; among the notes one for $9000, payable at the Union Bank, New Orleans, April 9th, 1862. The deed ended with a covenant that on the completion of the payments before mentioned Shields would warrant and defend the premises to Hood, his heirs and assigns, against all persons lawfully claiming or to claim them. In point of fact, when the papers came to be executed, the notes were signed not only by Hood, the purchaser, but also by his son, G. M. Hood, Jr. On the 1st of April, 1862, before the note that became due on the 9th matured, Hood, Sr., called on Shields and stated to him that he had some surplus cash with which he desired to pay a part of it off. Shields accordingly took his money, and a new note was executed for the balance; the old note being given up. The new note, like the old one had been, was made payable April 9th, 1862, and at the Union Bank, New Orleans. This new note shields afterwards (in the autumn of 1862) assigned to one Bartlett.

In May, 1863, Hood sold the land to two persons, named Scroggin and Hanna; and Bartlett having become bankrupt, his assignee in bankruptcy, one Cordova, now filed a bill in the court below against both the Hoods, Scroggin, and Hanna, to enforce the lien. The bill did not allege that the complainant had exhausted his remedy at law against Hood, the vendee of the land, who, or whose estate in point of fact, appeared to be solvent.

The Hoods let a decree pass pro confesso. Scroggin and Hanna set up in answer, or in argument, that all vendor's lien had been waived by taking Hood, Jr., as a party, who, not being interested, was a surety on the notes; that even if any lien had existed under or by virtue of the note of $9000, such lien was waived when that note was paid, as in law it was completely when it was surrendered; the transaction having been not a credit on an old debt, of so much cash paid, but an acceptance of cash and of a new debt, accompanied by an annihilation and extinction of the old one; that, at any rate, however all this might be as between Shields and Hood, they, Scroggin and Hanna, were purchasers, bon a fide and without notice of any lien; that further, if Shields, the vendor, might himself have enforced a lien against the land, had he continued to hold the note and debt, the right of enforcement was a right personal to him, and that it did not pass to Bartlett, his assignee, and as little certainly to Cordova, assignee in a second remove.

Shields, who was examined, thus testified:

'The recital in the instrument executed to G. M. Hood, Sr., on the 4th of March, 1850, corresponds with the facts, except that the name of G. M. Hood, Jr., was also signed to the notes. The land was sold to Mr. Hood, Sr., and his responsibility, coupled with a vendor's lien, secured by the regular form and terms of the instrument, was deemed by me a sufficient security. Mr. Hood, Jr., accompanied his father to my house, and was represented by his father to be his agent. I do not remember why it was that Mr. Hood, Jr.'s, name was signed to the notes. The deed or instrument was prepared, to the best of my recollection, before the notes, and in the absence of Mr. Hood; the notes, after the arrival of Mr. Hood and son. Their joint signatures was probably a suggestion of the moment and did not alter or take from the facts recited in the instrument. Mr. Hood, Sr., did execute the notes to secure the payment of the amounts, and at the time, and for the considerations mentioned in the deed. The additional signature of Hood, Jr., was simply that much more; a gratuity not called for by nor altering the contract. Mr. Hood, Sr., was represented, by those who knew him in Eastern Texas, to be a wealthy man. His son was considered responsible and trustworthy as far as I know. The reason for not taking a mortgage is shown by the terms of the instrument, by which the vendor's lien is plainly retained and held. I have no recollection of who was present when the terms of the instrument securing the vendor's lien were discussed, if discussed at all. There never was any question between us on that point; it being considered, of course, that my obligation of warranty in the instrument would only be made perfect or complete upon the payment of the whole amount of the purchase-money.

'The payment of a portion of the note of $9000 in advance, and taking another note, was simply a matter of convenience, and not intended, in any manner, or to any extent whatever, to impair or affect the lien retained by the terms of the instrument to secure the payment of the whole amount of the purchase-money. It was positively and unequivocally so stipulated and agreed between us at the time of the execution of the said note of $5015; so stated and understood, without question, between us.

'The note was traded to Bartlett, with the statement from me that it was secured by a vendor's lien on the land sold to Hood, Sr. I will further state that I believed at the time that Mr. Bartlett had special reference to that fact in the transaction, and that he felt that the note of G. M. Hood, Sr., to secure the remainder of the last payment for the land, with the right of the vendor's lien upon said land, was safer for him (Bartlett) than cotton, which he gave me for it; then liable at any moment to impressment.

'Both Hanna and Scroggin spoke to me, some time since-perhaps 1868 or 1869-in reference to the terms of sale by me to Hood. I gave them such information as my recollection of the facts warranted. One of them, and perhaps both, stated that they had been informed by Mr. Hood that he had paid the whole amount of the purchase-money; in reply to which I gave them true information, as nearly as I could. At the time there was more than $9000 due.'

Bartlett was also examined. He said:

'When Shields sold the note to me, he told me distinctly and positively that it was secured by a lien on the land. This was perfectly understood between us. I relied on this lien when I purchased it.'

Scroggin and Hanna were also both examined. They testified that Hood, Sr., was one of the wealthy men in Texas; that they supposed that the land had been sold to him on his personal responsibility; that with his own lips he declared to them that every dollar was paid on the land; that they had never heard of any lien. It appeared, however, on cross-examination that they had seen the record of the deed of March 4th, 1859, from Shields to Hood, before purchasing from Hood, and had had it examined by their professional adviser for their own 'protection.'

The court below confirmed the decree so far as the bill was confessed, but dismissed it as against Scroggin and Hanna. From that decree Cordova took this appeal.

Messrs. Conway Robinson, W. G. Hale, and R. T. Merrick, for the appellants; Mr. G. F. Moore, contra.

Mr. Justice STRONG delivered the opinion of the court.

title: Cordova v. Hood


text: Dictionary of National Biography, 1885-1900/Wakering, John


text: Talk:Cordova v. Hood

title: Talk:Cordova v. Hood


text:
Cordova v. Hood/Opinion of the Court

The appellees must be held to have had notice of whatever equities were revealed in the line of their title. They claim through a conveyance from Hood, Sr., who had purchased from Shields in 1859, and the deed from Shields plainly exhibited the fact that the purchase-money remained to be paid. It contained not even a receipt for the consideration of the sale. In form it was a deed of bargain and sale, but there was not enough in it to show that the use was executed in the vendee. On the contrary, it recites a consideration to be paid in instalments at subsequent dates, for which a draft and notes were given. That the vendor, by such a deed, had a lien for the unpaid purchase-money, as against the vendee and those holding under him with notice, unless the lien was waived, is the recognized doctrine of English chancery, and Texas is one of the States in which the doctrine has been adopted. It is a general principle that a vendor of land, though he has made an absolute conveyance by deed, and though the consideration is in the instrument expressed to be paid, has an equitable lien for the unpaid purchase-money, unless there has been an express or an implied waiver of it. And this lien will be enforced in equity against the vendee and all persons holding under him, except bon a fide purchasers, without notice. With greater reason, it would seem, should such a lien exist and be enforced when, as in this case, the deed, instead of containing a receipt for the purchase-money, expressly states that it remains unpaid.

The important question to be considered, therefore, is whether the lien has been waived. That there was no express waiver by Shields at the time when his deed to Hood was made and delivered, or at any subsequent time, is not only not proved, but is plainly disproved. Shields himself has testified that the lien was never released by him, and that when the note of his vendee for $5015 was taken for the unpaid portion of the larger note given at the time of the sale, it was with the distinct understanding between him and Hood that the payment then made, and the execution of the note for the balance, made no difference whatever respecting the vendor's lien to secure the balance, but 'that the land should continue just as liable to secure payment of said balance as before.'

It remains then to inquire whether there was any implied waiver of a lien. When the deed was made the vendor took for the purchase-money promissory notes signed not only by Hood, the vendee, but by Hood, Jr., his son. Had the notes been signed by the vendee alone no implication of an intent to waive a vendor's lien could have arisen. It is everywhere ruled that where such a lien is recognized at all it is not affected by the vendor's taking the bond or bill single of the vendee, or his negotiable promissory note, or his check, if not presented or if unpaid, or any instrument involving merely his personal liability. It is true that, taking a note or a bond from the vendee with a surety, has generally been held evidence of an intention to rely exclusively upon the personal security taken, and therefore, presumptively, to be an abandonment or waiver of a lien. But this raises only a presumption, open to rebuttal by evidence that such was not the intention of the parties. And we think the evidence in this case clearly shows that neither party to the deed understood that the vendor intended to take the note of Hood, Sr., and Hood, Jr., as a substitute for the lien. The only evidence we have bearing directly upon the subject is in the testimony of Shields. To some extent he does undoubtedly confound his own impressions with what occurred when the notes were given. But we think it may fairly be deduced from his statements that there was no intention then to waive the lien, which the law implied from the terms of the deed. He is unable to state why the son's name was signed in conjunction with the father's, but he is positive that the additional signature was simply a gratuity not called for by the contract nor altering it. He states also there never was any question between himself and his vendee respecting a vendor's lien, adding, it being considered, of course, that his obligation of warranty in the deed would only be made perfect or complete upon the payment of the whole amount of the purchase-money. And that taking the notes as they were taken was not intended as a waiver of a vendor's lien, or at least that it was not understood by the vendee to be such a waiver, is placed beyond doubt by what took place afterwards, on the 1st of April, 1860. There the renewed note was given for a part of the original purchase-money, and it 'was positively and unequivocally stipulated and agreed by the vendor and vendee' that the original lien was retained, that the land should continue liable as before. How could this be, if the lien had been waived? Waiver is a thing of intention as well as of action, and it is impossible to believe, in view of this testimony, there was an intention to give up the security of the land. Were this a bill to enforce the lien against the lands in the hands of Hood, the purchaser, it would not be permitted to him to assert that the vendor had, from the first, relied only upon the personal security taken.

And Scroggin and Hanna, the purchasers from Hood, are in no better position. They are not bon a fide purchasers without notice. As we have seen, the lien for the purchasemoney was apparent in the line of their title. The deed from Shields to Hood informed them that the consideration was unpaid. It imposed upon them the duty of inquiring whether it remained unpaid when they were about to make their purchase. Wherever inquiry is a duty, the party bound to make it is affected with knowledge of all which he would have discovered had he performed the duty. Means of knowledge with the duty of using them are, in equity, equivalent to knowledge itself. Had inquiry been made of the vendor, it would easily have been ascertained that a portion of the purchase-money remained unpaid. Inquiry of Hood, the debtor, if any such inquiry was made, was an idle ceremony. The deed pointed to the person from whom purchasers from Hood were bound to seek information.

It has been suggested in the argument on behalf of the appellees, that taking up the original note, and giving another note for an unpaid balance of the first, may have terminated the lien if any existed. Undoubtedly no agreement made in 1860, when the new note was given, created a vendor's lien for its security. But the original lien was for all the purchase-money, and for every part of it so long as it remained unpaid. It was not merely security for the notes first given; it was for the debt of which the notes were evidence. Giving the new note was not payment of the debt, it was only a change of the evidence, and, therefore, the fact that it was given did not affect the lien. In Mims v. Lockett, it was held that if a vendor of land takes a note for the price, and subsequently renews it, adding in the new note a sum of money due him by the vendee on a different account, his vendor's lien will not be invalidated thereby.

It has been further argued that even if Shields, the vendor, might have enforced a lien against the land had he continued to hold the note, Bartlett, his assignee, cannot. It is contended that a vendor's lien is a personal right of the vendor himself, not assignable. And hence that the assignee of a note given for the purchase-money cannot resort in equity to the land sold. It must be admitted that such is the doctrine of very many cases, perhaps of those which have been best considered, though there are many well-reasoned judgments to the contrary. But we think, for the purposes of the present case, the law, as held by the Supreme Court of Texas, must furnish the rule of decision. And the decisions of that court appear to be that an assignment of the notes given for purchase-money carries with it the lien to the assignee.

It has been held that in order to enforce a vendor's lien, the bill must show that the complainant has exhausted his remedy at law against the personal estate of the vendee, or must show that he cannot have an adequate remedy at law. And this bill makes no such showing. But in Texas, as in some other States, the creditor may proceed in the first instance to enforce the lien in equity.

Upon the whole, then, we think the Circuit Court erred in dismissing the complainant's bill. He was entitled to a decree.

DECREE REVERSED, and the case remitted with instructions to enter a decree for the complainant against Scroggin and Hanna, the appellees and defendants below.

title: Cordova v. Hood/Opinion of the Court


text: Talk:Cordova v. Hood/Opinion of the Court


text: Dictionary of National Biography, 1885-1900/Wakley, Thomas