Railroad Co. v. McClure — 77 U.S. 511

Majority — SWAYNE J.

p. 511

Railroad Company v. McClure.

Syllabus

1. No jurisdiction exists in this court under the 25th section of the Judieiary Act, to review a decision of the highest court of the State, maintaining the validity of a law which it has been set up “ impairs the obligation of a contract,” when the law set up as having this effect was in existence when the alleged contract was made, and the highest State court has only decided that there was no contract in the case.

2. A constitution of a State is in this case admitted to be a “law,” within the meaning of that clause of the Constitution of the United States, which ordains that “ no State shall pass any law impairing the obligation of contracts.”

Error to the Supreme Court of Iowa; the case in its principal features being thus:

The District Court of Washington County, Iowa, on a bill by the county to restrain the collection of taxes for the pay.ment of certain county bonds issued to railroads in June and July, 1858, and where the fact whether, at the time the bonds were issued, the then constitution of.the State gave authority to counties to issue such bonds, was one of the issues raised by the pleadings, enjoined the collection; so apparently, in effect, deciding that the bonds were void under the constitution of the State existing when they were issued. The

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creditors,appealed to the Supreme Court of the State. That . court affirmed, the judgment.. T.he record brought here from.it showed that the. creditors made the question before that court,.. that.the. decision of the court below.violated; that .clause in the, Constitution of the United States which-provides that no.-State shall, pass any jaw impairing the obli-,gation-Qf; contracts; and the decision of this,.court was against the right set up iinder such clause of the Constitution.”

The creditors now brought 'their case here as within the 25th section of.the Judiciary. Act, which-enacts .that.final judgments in the highest court of a State where is drawn in: question the validity of a statute of, or authority exercised under any State on the ground of their being repugnant to the Constitution . . . of the United States, and the decision is in favor of such, their validity, may be re-examined and- reversed or affirmed in this court.

The Supreme-Court of Iowa, as appeared from its published opinion, considered that' the decision of the inferior-court, which, it stated, had adjudged the bonds to be unconstitutional,-and so null and void ab initio (in other words, had adjudged that there was no contract in the case), was not a decision against the clause of the Constitution of the Uiiited 'State's which says that .no State shall pass any law impairing the obligation of contracts;” and on this ground affirmed it.

Mr. Grant, for the plaintiff in error,

referred to cases in the Supreme Court of Iowa to-show that at'the time when the bonds were issued, the constitution of that State, now construed by its courts in the -decision below, so as not ;to authorize the. issue by counties of railroad, bonds, had been construed so as to authorize such issues;^[1] and argued that the later interpretation, adverse to the validity of'the bonds, impaired the obligations of_a. contract; as this court, had decided.^[2]

stated the case, and delivered the opinion of the court.

This is a writ of error to the'Supreme Court of the State of Iowa. The case is brought into this court under the 25th section of the Judiciary Act of 1789'. •

Nathaniel McClur.e, and the other complainants who are such in their own right, filed a bill in equity in the District Court of Washington County, whereby they sought to enjoin the collection of taxes, to be applied' in the payment of the interest upon certain bonds issued by that county to the Ohio and Mississippi Bailroad Company, as set forth in the bill.

Samuel S. Owen, the county treasurer and collector, and S. P. Young,'the county judge,, were made defendants.

McClure died, and his legal representatives were made parties complainant in his stead. A preliminary injunction was granted; The Ohio and Mississippi Bailroad Company prayed to be made a party; whs made a party accordingly; and filed an answer,, alleging, among other things, that Thomas Durant, Betsey D. Tracey, Joseph E. .Sheffield, Clai’k'Durant, Thomas' Dunn, and William Newton, were bond fide holders of $132,000 of said bonds, and that, without their being parties, ño decree could be made iii the cause.; The complainants amended their bill by making those persons defendants, and those defendants thereupon- prayed to have thé causé removed to the District Court of the United States for the Southern Division of Iowa. The application was overruled.' They'then filed.au answer, wherein they' maintained the validity of the.bonds, and a.verred that they and the other holders, held them bond fide,'and prayed that the comity judge and the'county treasurer should'be decreed' to collect'the'amount'Of taxes requisite to pay the interest which had accrued. ' They afterwards filed a supplemental' answer, in which they set fo'rth that, on the 15th of August,-1860, Clark Durant, for himself and th'e other defendants, owners of said bonds, commenced in-the' District Court'of the United States for the District of Iów'a' an action at law against the County" of Washington -upon 'the' bonds and com.

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pons referred to in the bill, to recover the instalments of interest due thereon for July, 1859, January, 1860, and July, 1860, and that the County of Washington appeared and pleaded in bar the .same matters that are set up in the bill, and particularly that the issuing of the bonds was unconstitutional and void, that judgment was rendered in favor of the plaintiff, and that the said county thereupon removed the cause to the Supreme Court of the United States, where it was still pending. The board of supervisors were subsequently made defendants in.this case. The District Court of Washington County decreed a perpetual injunction as prayed for. The case was taken- by appeal to the Supreme Court of the State. In that court the defendants filed two supplemental answers. In the first it was alleged that since the filing of their preceding answer the case of Durant v. The County of Washington, taken to the Supreme Court of the United States, had been dismissed from that court, and that the judgment of.the District Court of the United States for the District of Iowa then stood in force, and was unsatisfied. The second answer set forth that on the day of , 1867, the defendants, Clark Durant and others, by the judgment of the Circuit Court of the United States for the District of Iowa, upon due process of law, recovered a further and other judgment upon interest warrants of said bonds to the amount of $70,652.37; that in said action Clark Durant was plaintiff' and the County of Washington defendant, and that the complainants are taxpayers of that county, and privies to said judgment. The board of .supervisors also answered in the appellate court. A stipulation was filed by the counsel of the parties admitting the facts set forth in the supplemental answers as to the judgments alleged to have been recovered and the dismissal of the writ of error from this court. The motion to remove the cause to the proper court of the United States was renewed and overruled, as it had been in the court below. . The Supreme Court of the State affirmed the decree of the District Court of Washington County. .The record shows that the counsel for the plaintiff in error waived in the Supreme Court of the State

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all questions except the one relating to the validity of the bonds. The opinion of the court was confined to that subject. The bonds were held to be invalid upon the ground that they were unauthorized and were forbidden by the constitution of the State.. The same counsel in his brief and argument here has discussed only that subject.- He has presented no other proposition for our consideration. Under these circumstances we have not deemed it proper to extend our examination of the case beyond this point.

The-question of the validity of the bonds is not one of Federal jurisdiction. The Constitution of the United States declares,^[1] that no State shall-pass a law “ impairing the obligation of contracts.” The constitution of a State is undoubtedly a law within the meaning of this prohibition.. A State can no more do what is thus forbidden by one than by the other. There is the same impediment in Jhe way of both. But the State has passed no law upon the subject, and the constitution of the State, which, as construed by the Supreme Court of the State, has worked the result complained of, was in force when the bonds-, were issued. The 25th section of the Judiciary Act of 1789 specifies the questions of which we can take cognizance in this class of cases, and expressly excludes all others from our consideration. It is clear that the question before us is not within the affirmative category.

If the case had been brought up from the Circuit Court under the 22d section of the Judiciary Act, this question and all others arising on the record, would have been open for examination. The 25th section is more limited -in its operation.

The case will be dismissed por want op jurisdiction, and •emanded to the court whence it came.

* Article I, 10.