A title, right, privilege or immunity under the Constitution, or
any treaty or statute of the United States, is not properly set up
or claimed under Rev.Stat. § 709 when suggested for the first time
in a petition for rehearing after judgment.
The provisions of the Code of Practice of Louisiana in relation
to judgments of the supreme court of that state do not require the
application of any different rule.
Where a decree is entered by a court of the United States by
consent and in accordance with an agreement between the parties
referred to therein, no title or right claimed under an authority
exercised under the United States is decided against by a state
court in determining that the validity of a particular article of
such agreement was not in controversy or passed upon in the cause
in which the decree was rendered, and in the
Page 137 U. S. 49
instance of a decree similarly entered by a court of one state,
due effect to the final judgment of such court is not refused to be
given by a like determination by a court of another state.
Motion to dismiss or affirm. The case was stated by the court as
follows:
The Texas and Pacific Railway Company, represented by its
receiver, filed its petition against the Southern Pacific Company
in the Civil District Court for the Parish of Orleans on the 11th
of April, 1888. The receiver was subsequently discharged and
afterwards died, and the cause was ordered to be proceeded with in
the name of the railway company as sole plaintiff. By the petition,
the company described itself as a corporation created by and under
the laws of the United States, namely, certain enumerated acts of
Congress. After stating that the plaintiff had offices in Texas and
at New Orleans, and that its lines of railway extended or reached,
by track-running arrangements or connections, from El Paso, Texas,
to New Orleans, and to Galveston, Texas, the petition set up an
agreement entered into on the 26th of November, 1881, by Huntington
of New York, on behalf of himself and his associates, and certain
railway corporations, with Gould of New York, on behalf of himself
and his associates and certain railway corporations, a copy of
which agreement was annexed, and further alleged that thereafter,
on or about February 18, 1885, this agreement was amended by a
modification, a copy of which was also annexed. The object of the
contract as expressed may be briefly described as in substance the
settlement of pending litigation in the courts of Texas, Arizona,
and New Mexico, the release and relinquishment of certain disputed
rights and franchises of plaintiff west of El Paso, and the
construction of plaintiff's track to make a junction with the other
railroads at a certain point east of El Paso. The petition further
averred that the agreement and its modification had been duly
adopted and ratified by the several corporations mentioned, and
that it had been in all things complied with by the plaintiff as
well as by the other parties of the second part.
Page 137 U. S. 50
The petition also averred:
"That in pursuance of said agreement, the same was duly made a
decree of the court in the said litigation herein referred to, and
in said courts of Texas, New Mexico and Arizona, as by duly
certified copies of said decrees will appear and in the form shown
by the copy hereto annexed as part hereof and marked Exhibit 'C,'
which decrees conformed with and carried out said agreement."
Article VI of the agreement and the modification were then set
forth, and related to the disposition of business and division of
earnings between points in respect to which the lines of plaintiff
and defendant were competing, as subsequently determined.
The petition then alleged that the defendant, a corporation
created and organized under the laws of Kentucky but doing business
in Louisiana and having its principal place of business in the City
of New Orleans, with a general manager there authorized to receive
service of process, and which company was controlled by Huntington
and his associates, took possession and control about November,
1884, of the railroad companies mentioned in the agreement as
represented by Huntington, etc., and adopted as its own and assumed
the rights and obligations of the agreement and its modification,
and since had been and was now liable as party of the first part
for all the obligations of the parties thereto of the first part;
that it rendered accounts of the business done by it, under the
agreement and modification, down to March 31, 1887, and the
defendant up to that time recognized the plaintiff as the party to
whom accounting should be made; that by Article XV of the
agreement, it was provided that either or any of the several
railroad companies, parties thereto, might maintain any action,
either at law or in equity, against either, any, or all of the
other railroad companies, to protect any rights secured by the
agreement, or to specifically enforce the same, or to recover
damages for a breach of the same affecting its interest; that
plaintiff was entitled to an accounting and to a decree against the
defendant for the amount which would then appear to be due under
said agreement, and demanded judgment against the defendant for the
sum of $352,717.78, alleged
Page 137 U. S. 51
to be due up to March 31, 1887, and for a further sum of
$200,000 and over from March 31, 1887, and a small additional claim
for an excess of earnings in its favor in the operation of certain
lines of railroad in New Mexico and Arizona, and for such
additional claims as might be discovered and ascertained on
trial.
Exhibit "C" purported to be a copy of the decree of the District
Court of the Third Judicial District of New Mexico which contained
the following clause:
"The aforesaid decree is made to carry out the provisions in
this behalf of said agreement, dated November 26, 1881, which is
hereby made a part of this decree, and by consent of the parties,
and upon consideration by the court, is hereby ordered to be
binding upon each and all of the parties hereto in all its
stipulations and agreements as therein shown, and said decree does
not affect or otherwise interfere with the provisions of the
agreement."
To this petition the defendant filed peremptory exceptions to
the effect that the contract sued upon being a railway pool between
competing railroad companies to divide between them their earnings
from competitive traffic was illegal for the reason that it was
injurious to the public interest and contrary to public policy, and
hence it could not be enforced by a court of justice; that the
contract contravened a clause in the Constitution of Texas, in
force at the time it was entered into, and that even if valid, the
contract was terminated by the provisions of the Act of Congress
approved February 4, 1887, entitled "An Act to Regulate Commerce,"
which went into effect the third of April, 1887, and was generally
known as the Interstate Commerce Act.
The cause went to trial and testimony was taken on the
exceptions, bearing upon the relative positions of the railroad
companies that were parties to the pooling agreement and the injury
to the public from the destruction of competition arising
therefrom. The acts of incorporation of the defendant, and of the
various companies, parties to the contract, and represented by
Huntington, were introduced in evidence, and the plaintiff offered
the acts of Congress and of the Texas referred to in the
pleadings.
Page 137 U. S. 52
The district court, on the 21st of December, 1888, entered the
following order upon its minutes:
"In these exceptions submitted to the court for adjudication,
and the court considering the prohibition contained in art. 10,
sec. 5, of the Constitution of Texas, adopted in 1876, and for
reasons orally assigned by the court, the law and evidence being in
favor of plaintiff in exceptions, it is ordered that the peremptory
exceptions filed herein on May 19, 1888, be maintained, and
accordingly that plaintiff's suit be dismissed. Judgment rendered
December 21, 1888, with costs."
The plaintiff filed its motion for a new trial, enumerating
various grounds therefor, which motion was overruled and judgment
signed, whereupon plaintiff carried the cause by appeal to the
supreme court of the state and there assigned numerous errors. In
none of the grounds for new trial or the errors assigned were the
alleged federal questions hereafter referred to specially set up.
The supreme court held that the pooling contract sued on was
illegal and void upon general principles of law and public policy,
and upon that ground affirmed the judgment of the court below. The
court in its opinion expressly declared that it did not find it
necessary to pass upon the defenses based upon the Constitution of
Texas and the Interstate Commerce Act.
Plaintiff thereupon filed an application for a rehearing in
which it claimed, among other things, that the court had denied
plaintiff's rights under the decrees of the courts of New Mexico,
Arizona and Texas; that the acts of Congress referred to in the
petition conferred upon plaintiff the right to enter into the
agreement, public policy to the contrary notwithstanding, and that,
as the subject matter of the contract sued on related to interstate
commerce and Congress had not forbidden such an agreement, "any
attempt to apply state laws to annul such agreement is unlawful."
The supreme court denied the rehearing, and an application was then
made to the Chief Justice of Louisiana for a
writ of error,
which was refused, but the writ was subsequently allowed by one of
the justices of this Court. The cause having been docketed, the
defendant in error moved to dismiss or affirm.
Page 137 U. S.
53
MR. CHIEF JUSTICE FULLER, after stating the facts as above,
delivered the opinion of the Court.
The decision of the Supreme Court of Louisiana was not against
the validity of a treaty or statute of, or an authority exercised
under, the United States, nor in favor of the validity of a statute
of, or an authority exercised under, any state, drawn in question
on the ground of repugnancy to the Constitution, treaties, or laws
of the United States, and in order to maintain jurisdiction because
of the denial by the state court of any title, right, privilege, or
immunity claimed under the Constitution or any treaty or statute of
the United States, it must appear on the record that such title,
right, privilege, or immunity was "specially set up or claimed" at
the proper time and in the proper way.
It is contended that the plaintiff company had the right, under
the acts of Congress by which it was incorporated, to make the
contract in question, and hence that the decision that such
contract was illegal and contrary to public policy constituted a
denial of a right or privilege conferred by a statute of the United
States, and also that, as the agreement related to earnings from
interstate as well as from intrastate traffic, such decision was an
interference with the freedom of interstate commerce within the
prohibition of the commerce clause of the Constitution of the
United States. But it does not appear that either of these
propositions was presented to the trial court in any way, or
advanced in the supreme court, until urged in the petition for a
rehearing. The title, right, privilege, or immunity was not
specially set up or claimed at the proper time and in the proper
way. It is true that under the law of Louisiana, a judgment of the
supreme court does not become final until after six judicial days
from the rendering of the judgment have elapsed, within which time
a dissatisfied
Page 137 U. S. 54
party may apply for a new hearing of the cause; but it does not
follow that new grounds for decision will be allowed to be
presented, or will be considered on such application, and the
general rule is otherwise. La. Code of Practice, Arts. 538, 539,
547, 548, 911, 912;
Rightor v. Phelps, 1 Rob. 330;
Stark v. Burke, 9 La.Ann. 344;
Caldwell v. Western
Marine Ins. Co., 19 La. 48;
Hanson v. City of
Lafayette, 18 La. 309. And while the court is required to
state the reasons of its judgments, it is not obliged to give
reasons for refusing a new hearing. Code of Practice, Arts. 909,
914.
We are of opinion that in Louisiana, as elsewhere, a title,
right, privilege, or immunity is not properly clamed under the act
of Congress when suggested for the first time in a petition for a
rehearing after judgment. The case of
Stewart v.
Kahn, 11 Wall. 493, cited for plaintiff in error,
is not to the contrary. The petition referred to there seems to
have been simply one for review on appeal, and not a petition filed
after the case had been decided by the supreme court, and the
record showed the decision of the federal question by both
tribunals.
In the case at bar, it does not appear in direct terms or by
necessary intendment that these points were brought to the
attention of either of the courts prior to the entry of the
judgment of affirmance.
If, therefore, the maintenance of this writ of error depended
upon the questions thus raised, the motion to dismiss would be
sustained; but it is insisted in addition that the state courts did
not give due effect to the decrees of the courts of New Mexico and
Arizona and of the State of Texas, and that a title or right
claimed under an authority exercised under the United States, as
well as under the Constitution of the United States, was thereby
denied.
No certified copies of the decrees referred to were annexed to
the petition, but there was attached an uncertified copy of what
purported to have been a decree in the district court of New Mexico
between plaintiff and sundry of the railroad companies named in the
agreement, defendants. Upon the hearing, plaintiff did not present
certified copies of the decrees and insist upon rulings as to their
effect, nor did it specifically
Page 137 U. S. 55
aver in its petition that the agreement for the division of
earnings had been adjudged to be valid and binding upon the parties
by those decrees. The question of the illegality of the contract
seems to have been submitted upon the merits, and was so decided,
so that there is ground for the argument that the right had not
been properly set up or claimed in compliance with the statutory
requirement. It is earnestly urged, however, that the exceptions
were in the nature of demurrers, and that, being treated as such,
the petition, taken in connection with Exhibit C, sufficiently
presented the question. And the supreme court in its opinion, set
up as part of the record and to be found reported in 41 La.Ann.
970, said:
"A point which overshadows the discussion of all three of the
exceptions is made by plaintiff's counsel, who contends that, the
agreement between the parties having been sanctioned by a decree of
the courts in which the litigation adjusted between the railroad
companies was pending, it has now acquired the force and effect of
the thing adjudged, and hence it cannot be attacked
collaterally,"
and it proceeded to consider and dispose of that contention.
We shall overrule the motion to dismiss, but, there having been
color for it, will pass upon the motion to affirm.
In reference to the decrees, the Supreme Court of Louisiana held
that the rule invoked applied only to matters of preexisting
differences settled and compromised, and not to agreements or
contracts for future action and execution; that the subject matter
of Article VI of the agreement was not a subject of contention
between the parties, either as a difference or in the shape of any
pending litigation at the time the agreement was entered into; that
in fact it had no existence prior to the contract itself, and had
no reference to the past, but its whole operation or effect was
intended exclusively for the future; that the decree carefully
enumerated all the litigious matters which were in suit between the
several railway companies parties to the litigation then pending,
and that no other matters in the agreement were affected by the
judgment, and Mr. Justice Poche, speaking for the court, called
attention, as clearing away any doubt, to that part of the decrees
which
Page 137 U. S. 56
declared that they were made to carry out the provisions in this
behalf, and did not affect or otherwise interfere with the
provisions of the agreement.
It was concluded that the stipulations of Article VI had not the
force and effect of the thing adjudged, and were lawfully liable to
attack in the mode and manner adopted by the defendant. It was
added that this conclusion was mainly predicated upon the view that
the agreement in its entirety did not evidence a single and
connected contract, but that the instrument was used as a means to
facilitate the execution by two representatives of numerous
obligors and distinct obligees of a series of varied and distinct
contracts.
By this decision, was the validity or due effect of either of
these decrees disallowed by the state court? We do not think
so.
The decrees were entered by consent and in accordance with the
agreement, the courts merely exercising an administrative function
in recording what had been agreed to between the parties, and it
was open to the Supreme Court of Louisiana to determine, upon
general principles of law, that the validity of Article VI was not
in controversy or passed upon in the causes in which the decree was
rendered. In doing so, that court did not refuse to give due effect
to the final judgment of a court of the United States or of another
state.
The judgment is
Affirmed.