Shawnee Sewerage & Drainage Co. v. Stearns - 220 U.S. 462 (1911)
U.S. Supreme Court
Shawnee Sewerage & Drainage Co. v. Stearns, 220 U.S. 462 (1911)
Shawnee Sewerage and Drainage Company v. Stearns
Submitted March 14, 1911
Decided April 10, 1911
220 U.S. 462
A simple breach of a contract by a municipality does not amount to an act impairing the obligation of the contract.
A statute authorizing the issuing of bonds for the purpose of constructing a public utility cannot impair the obligation of a contract made subsequent to the enactment of such statute.
The breach of a contract is neither confiscation of property nor the taking of property without due process of law. St. Paul Gas Light Co. v. St. Paul, 181 U. S. 145.
Where diversity of citizenship does not exist and plaintiff's claim is based on a simple breach of contract by a municipality, the case is not one arising under the contract or due process clause of the Constitution, and the Circuit Court has not jurisdiction.
Where the Circuit Court dismisses a bill on the merits, but it appears that jurisdiction did not exist, the decree must be reversed and the cause remanded with instructions to dismiss for want of jurisdiction. McGilvra v. Ross, 215 U. S. 70.
The facts, which involve the jurisdiction of the circuit court of cases arising under the Constitution and laws of the United States, are stated in the opinion.