When a suit does not really and substantially involve a dispute
or controversy as to the effect or construction of the Constitution
of the United States upon the determination of which the result
depends, then it is not a suit arising under the Constitution.
Upon the bill and answer in this case, no such dispute or
controversy arose as would give original jurisdiction to the
Circuit Court of the United States without regard to the diverse
citizenship of the parties.
The act of the Legislature of Louisiana repealing the act
creating the Board of Metropolitan Police and other acts in
relation thereto, was, in itself, a mere change of an
instrumentality of municipal government, and as, upon the record,
it must be assumed that the assets of that board and the remedies
in respect thereof of those who held evidences of indebtedness
issued by the board remained unaffected by the repealing act, the
act could not be attacked in this way as unconstitutional because
it made no specific provision for the payment of such indebtedness,
on the liquidation of the affairs of the board.
Whether this suit be regarded as seeking a decree against
defendants as on a creditors' bill, or as by analogy to garnishee
process, it was, under the pleadings, a suit to recover the
contents of choses in action within the meaning of the Judiciary
Act of 1887 and 1888, and, as the bill contained no averment that
the suit could have been maintained by the assignors, the
jurisdiction of the circuit court cannot be sustained on the ground
of diverse citizenship.
This is a certificate from the United States Circuit Court of
Appeals for the Fifth Circuit, under section six of the Judiciary
Act of March 3, 1891, the statement and questions of law so
certified being as follows:
"The complainant, an alien, filed his bill of complaint in the
circuit court against the City of New Orleans and other municipal
corporations, citizens of the State of Louisiana, alleging, among
other things, as follows,
viz.:"
" That by an act of the Legislature of Louisiana (No. 74)
approved September 14, 1868, the Parishes of Orleans (including
Page 153 U. S. 412
the City of New Orleans), Jefferson, and St. Bernard were
territorially united in one district for the purpose of police
government therein, called the 'Metropolitan Police District of New
Orleans, Louisiana.' That the government of said district for
police purposes was vested in a board of commissioners styled the
'Board of Metropolitan Police.'"
" That said board was required to appoint all the officers and
employees of the police force required in said district, and their
salaries, which were prescribed by the act, were required to be
paid monthly. That by said act, and acts of said legislature
supplementary to and amendatory thereof, said board was required to
make annually an estimate of the expenses of maintaining a police
force in said district, and to apportion the same to the several
cities and parishes within said district, and said cities and
parishes were required by said acts to promptly pay, and to provide
the means for promptly paying, the amounts thus apportioned to
them,"
"and they were authorized and required to raise the amount by
levying taxes for that purpose."
"That said board of Metropolitan police, in obedience to the
laws creating and governing the same, organized a Metropolitan
police force in said district and appointed and employed the
officers and members thereof, who entered upon their duties and
rendered services under contracts therewith to be paid the salaries
fixed by law for such employment, such contracts being made upon
the faith of its revenues applicable to their payment being
unimpaired."
"That said board annually made the estimates of the expenses of
maintaining such police force and apportioned the same to the
several cities and parishes in the district, and that large sums
are due and unpaid on account thereof by the City of New Orleans
and other corporations made defendants in the bill."
"That by the provisions of an act of said legislature approved
February 27, 1869, and subsequent acts, all warrants issued in
payment of salaries of officers, employees, and members of the
Metropolitan police, and for the expenses of said board, were made
receivable for all parish and municipal
Page 153 U. S. 413
taxes and licenses within the limits of the Metropolitan police
district, and for all debts due or to become due to the parishes
and cities within said district not exceeding in any one year the
amount of their respective apportionments for that year."
" That by an Act of said legislature (No. 35) approved March 31,
1887, said Act No. 74, of September 14, 1868, establishing said
Metropolitan police district; said Act No. 44, of February 27,
1869, making all warrants issued in payment of Metropolitan police
salaries and expenses receivable for all municipal and parish taxes
within the district; said Act No. 94, of March 30, 1870, requiring
the several cities and parishes within the district to pay, and to
provide the means for the payment of, their apportionments of the
expenses of the board of Metropolitan police; said Act No. 16, of
March 24, 1875, entitled 'An act to enforce the payment by the City
of New Orleans and the several cities and parishes of the
Metropolitan police district of the apportionment made upon them by
the board of Metropolitan police, and for other purposes,' as well
as all other acts amendatory of said above-enumerated acts, or upon
the same subject matter, were repealed, and said board of
Metropolitan police was abolished, and no provision was made for
the liquidation of its affairs, or the payment of its debts."
" That said repealing act was in violation of Section 10,
Article I, of the Constitution of the United States in that it
impaired the obligation of the contracts made by said board of
Metropolitan police with its officers and employees, and others to
whom it was indebted, and who had contracted with and rendered
services to said board upon the faith of said provisions of law for
the enforced payment and collection of the sums due to it as
aforesaid from the several cities and parishes within said
district, out of which funds only they could be paid, and to that
extent said act was and is null and void."
"The bill further avers that complainant is the holder and owner
of Metropolitan police warrants, certificates, and claims against
said board of Metropolitan police, said warrants and certificates
having been issued by said board for services rendered and supplies
furnished, and said claims being for services
Page 153 U. S. 414
rendered and supplies furnished thereto under contracts
therewith, said warrants, certificates, and claims amounting to
$5,032.90, and that other due and unpaid warrants and certificates
issued by said board are outstanding, and sums are due and owing by
it for services rendered and supplies furnished to it exceeding
$200,000."
"And it is also averred:"
" That the only assets of said board of Metropolitan police at
the time it was abolished were the amounts due to it by said City
of New Orleans, and by the other defendants, as herein stated. That
the aggregate amount of said indebtedness to said board largely
exceeds the total amount of its debts and liabilities. That law and
equity require that the amount of said assets should be
ascertained, and the just proportion due by each of the defendants
adjusted, and that the liabilities of said board of police be fixed
and determined, and paid out of said assets, and, if the same
exceed the liabilities of the board, that said defendants be
required to pay their
pro rata shares thereof."
" That said board of Metropolitan police was a body corporate
under the laws of its creation, and by the repeal of said laws
ceased to be, and had and has no representative or successor,
against whom suit might have been or may now be brought for the
establishment of the demands of the complainant herein, and he is
remediless except in this honorable court, where matters of this
nature are cognizable and relievable. Wherefore, he brings this his
bill in behalf of himself and all other creditors of said board,
similarly situated, who may come in, and contribute to the expenses
of this suit."
"The prayer of the bill, in substance, is that an account be
taken"
"of all the debts, liabilities, and unpaid dues, of every kind,
of said board of Metropolitan police, including the warrants,
certificates, and claims of your orator, and of all others who may
come in and avail themselves of the decree to be made herein, and
contribute to the expense of this suit; that a like account may be
taken of the amount due by each of said defendants to said board of
Metropolitan police for the balances of their unpaid apportionments
of police expenses, as
Page 153 U. S. 415
well as of all police taxes collected by them, and withheld from
said board, and that said defendants be decreed to pay into the
hands of some discreet person, to be appointed receiver by this
honorable court, their several
pro rata shares of the
amount so found to be due to creditors of said board of
Metropolitan police, including all costs of the administration
thereof, and that the funds thus realized be applied to the payment
of your orator's said warrants, certificates, and claims, and of
such other persons as may be creditors of said board, and who shall
come in and establish their claims, and also to the payment of
interest thereon, and all expenses of administration, and
costs."
"The defendant the City of New Orleans demurred to the bill,
assigning, among other causes of demurrer, the following:"
" That the complainant's said bill of complaint -- in case the
same were true, which this defendant does in no wise admit --
contains not any matter of equity whereon this Court can ground any
decree, or give the complainant any relief or assistance, as
against this defendant."
" That the bill complains of the repeal by the Legislature of
Louisiana of the aforesaid acts organizing and relating to the
Metropolitan police force and the Metropolitan police board, and by
reason of said repeal, the bill alleges, the Metropolitan police
board was abolished, and no provision was made, or now exists, for
the liquidation of the affairs, or for the payment of the alleged
debts, of said board, and the bill calls upon this court to grant
relief for the payment of said alleged debts of said Metropolitan
police board; but this defendant shows that the only mode of
payment of said alleged debts, if any, of the late Metropolitan
police board, a political body for the administration of the police
of the city, is by taxes to be levied for that purpose, and, if it
be true, as asserted by said bill, that no provision now exists for
the payment of said debts, this Court has no power to direct the
levy of taxes for said asserted debts, or any power whatever to
grant any relief in respect to the matters of which the bill
complains."
"The demurrer was overruled."
"Said defendant then filed an answer, and, among other
Page 153 U. S. 416
things, averred as follows:"
" Further answering, defendant admits that, by the Act of the
Legislature of Louisiana, No. 35 of 1877, the various acts
organizing the Metropolitan police board were repealed. But all the
provision for the payment of said Metropolitan police was the levy
of the Metropolitan police taxes authorized by law, and said taxes
had already been levied far in excess of taxes that should have
been imposed, and the repealing legislation did not interfere in
any manner with the levy and application of said taxes, to the
extent that they could be collected, to the payment of the legal
obligations of said Metropolitan police board. And with this
statement, and a reference to said repealing act, this defendant
denies the allegation in the bill that, by such repealing
legislation, no provision was made for the liquidation of the
affairs of said board, or payment of its debts."
" This defendant again affirms that said repealing act did not
interfere in any manner with the means of payment of all lawful
obligations of said board, nor with the right of those who had made
lawful contracts -- that is, to the extent authorized by law --
with said board, and this defendant again refers to the illegal and
void apportionments of said board, and to the alleged contracts
made by it, far in excess of the means applicable to the support of
the Metropolitan police, and far in excess of their power, and
denies to be true that said repealing act was in violation of the
Constitution of the United States, or 'impaired the obligation of
the contracts of said board with its officers and employees who had
contracted with and rendered services to said board upon the faith
of said provisions of law for the enforced payment and collection
of the sums due to it from the several cities and parishes within
said district,' and denies that said act was null and void in any
respect, or to any extent."
"Said answer also averred that the city was liable to said board
only for such police taxes as she collected, and that she had fully
accounted for all such collections, and denies that she is now
making any such collections, and that any such taxes are
collectible."
"Issue being joined, the case was referred to a master to
Page 153 U. S. 417
take an account of the amounts due by the defendants to said
board and of its outstanding liabilities. He reported as due by the
City of New Orleans on account of its apportionments a balance of
$241,106.54 and an indebtedness of the board incurred on account of
said city, and still unpaid, amounting to $123,963.06, besides
interest thereon. Small amounts were found due by the other
defendants, and also by the board on their account."
"Prior to the decree, a number of creditors of the board, some
of whom were citizens of Louisiana, with leave of court, intervened
in the suit, made proof of their claims before the master, claimed
the benefit of the decree, and prayed to be permitted to share in
the distribution."
"Of the amount of claims proved before the master, and covered
by the decree, the complainant, an alien, holds $5,777.78; an alien
intervener holds $815.78; interveners who are citizens of Louisiana
hold $81,100.51, and interveners whose citizenship does not appear
hold $30,302.16. Other claims, amounting to $13,363.21, were proved
before the master by persons whose citizenship does not appear, and
who have not intervened."
"And it appearing that complainant and interveners were
assignees of the certificates, warrants, and claims of which they
made proof before the master, and that their assignors were
citizens of Louisiana, and there being no averment in the bill that
the assignors might have sued thereon in the circuit court if no
transfer thereof had been made, the City of New Orleans moved to
dismiss the suit for want of jurisdiction in said court."
"The motion was denied, and a final decree made requiring the
defendants to pay their virile shares of the indebtedness of the
board, as reported by the master. From such decree an appeal was
taken to this court, and the case came on to be heard upon the
errors assigned, whereupon, the court desiring the instruction of
the honorable the Supreme Court of the United States for the proper
decision of the questions arising herein touching the jurisdiction
of the circuit court, it is hereby ordered that the following
questions and propositions
Page 153 U. S. 418
of law be certified to said Supreme Court, in accordance with
the provisions of section 6 of the act entitled"
"An act to establish circuit courts of appeals and define and
regulate in certain cases the jurisdiction of the circuit court of
the United States and for other purposes,"
"approved March 3, 1891, to-wit:"
"First. Does the case made by the bill, alleging that the board
of police has been abolished, and left without successor or legal
representative, and no provision has been made for the application
of its assets to the payment of its debts and the answer herein,
constitute a suit in equity arising under the Constitution of the
United States, and within the jurisdiction of the Circuit Court of
the United States for the Eastern District of Louisiana, without
regard to the diverse citizenship of the parties?"
"Second. The warrants and the certificates held by the
complainant having been issued for services rendered and supplies
furnished under contract with the board of Metropolitan police,
when the laws required said warrants and certificates to be
received by the defendants in payment of all licenses, taxes, and
other dues, and all such laws having been repealed by the
Legislature of Louisiana without making other provision for the
redemption of said warrants and certificates, was this an
impairment of the obligation of the contract in relation to such
warrants and certificates, within the meaning of Article I, Section
10, of the Constitution of the United States?"
"Third. Do the pleadings show a suit to recover the contents of
choses in action within the meaning of the Judiciary Act of 1887
and 1888, so as to preclude the complainant, as assignee, from
suing in the circuit court of the United States to establish a fund
out of which he, in common with other creditors of the late
Metropolitan police board, may be paid
pro rata upon their
claims?"
"Fourth. Considering all the allegations in the bill of
complaint, and the provisions in the Constitution and laws of
Louisiana respecting the Metropolitan police board, and the
Metropolitan police warrants and certificates, and the redemption
circuit court
Page 153 U. S. 419
and payment of said certificates, does the case show a liability
on the part of the City of New Orleans to contribute to a fund for
the payment of said warrants and certificates beyond its liability
for taxes assessed and collected in pursuance of the apportionments
made?"
The circuit court of appeals
"further ordered that the bill of complaint, and the demurrer
and answer of the City of New Orleans thereto, be made a part of
the transcript certifying the aforesaid questions, together with
the following sample copies of the warrants, certificates,payrolls,
and assignments forming the basis of complainant's demand,
to-wit:"
"
Warrant Filed with and Part of
Assignment"
"
(Copy)"
"
Central Department, Metropolitan Police"
"
(No. 10,253)"
"New Orleans, May 18th, 1874"
"Treasurer of the Board Metropolitan Police:"
"Pay to the order of James Reilly, fifty 00/100 dollars."
"By order of the board."
"$50.00 [Signed] E. Parker,
Chief Clerk"
"
Certificate Filed with and Part of
Assignment"
"
(Copy)"
"
Central Department, Metropolitan Police"
"
No. 4,748 $73.97"
"New Orleans, Jan. 13, 1876"
"This is to certify that the board of Metropolitan police is
indebted to P. Moran, No. 22, first precinct, in the sum of
seventy-three 97/100 dollars, for salary for account of the month
of December, 1875."
"[Signed] L. T. Murdock"
"
Treasurer Board Metropolitan Police"
"The amount due as per this certificate will not be paid unless
the certificate is delivered to the treasurer of the board."
Then followed form of payrolls, the one given being
Page 153 U. S. 420
approved January 5, 1877, for $4,976.04, and the bill, demurrer,
and answer, which were set forth at length.
Page 153 U. S. 423
MR. CHIEF JUSTICE FULLER, after stating the facts in the
foregoing language, delivered the opinion of the Court.
The first and third questions propounded relate to the
jurisdiction of the circuit court, which was invoked on two
grounds: (1) that the case was one arising under the
Page 153 U. S. 424
Constitution of the United States, and (2) on diverse
citizenship.
1. When a suit does not really and substantially involve a
dispute or controversy as to the effect or construction of the
Constitution upon the determination of which the result depends,
then it is not a suit arising under the Constitution.
Shreveport v. Cole, 129 U. S. 36;
Starin v. New York, 115 U. S. 248,
115 U. S. 257;
Gold Washing & Water Co. v. Keyes, 96 U. S.
199.
The judicial power extends to all cases in law and equity
arising under the Constitution, but these are cases actually, and
not potentially, arising, and jurisdiction cannot be assumed on
mere hypothesis. In this class of cases, it is necessary to the
exercise of original jurisdiction by the circuit court that the
cause of action should depend upon the construction and application
of the Constitution, and it is readily seen that cases in that
predicament must be rare. Ordinarily the question of the repugnancy
of a state statute to the impairment clause of the Constitution is
to be passed upon by the state courts in the first instance, the
presumption being in all cases that they will do what the
Constitution and laws of the United States require.
Chicago
& Alton Railroad v. Wiggins Ferry Co., 108 U. S.
18,. And if there be ground for complaint of their
decision, the remedy is by writ of error, under section 709 of the
Revised Statutes. Congress gave its construction to that part of
the Constitution by the twenty-fifth section of the Judiciary Act
of 1789, and has adhered to it in subsequent legislation.
But assuming that such repugnancy might be so set up as to form
an independent ground of jurisdiction in the circuit court, it
becomes necessary, in order to dispose of the inquiry whether such
a dispute or controversy was really involved here, to refer to
certain legislation of the State of Louisiana,
By act No. 74 of 1868 (Acts La. 1868, 85), the Parishes of
Orleans, Jefferson, and St. Bernard were united into a district
called the "Metropolitan Police District of New Orleans,
Louisiana," and a board created, styled the "Board of Metropolitan
Police," upon which were conferred the
Page 153 U. S. 425
powers and duties pertaining to police government and discipline
in that district, with power to issue warrants and certificates for
the payment of the police, and other expenses. These expenses were
to be borne by the cities, towns, and parishes of the district, and
apportionments or estimates thereof were to be made annually by the
board against each of the cities and parishes, which were to be
"binding upon the respective cities and towns interested therein,"
and the cities, towns, and parishes were empowered and directed to
annually levy and collect taxes to raise the sums of money so
estimated and apportioned, to be paid over to the state treasurer,
and constitute a fund to be paid, out on warrants as provided.
By Act No. 44 of 1869 (Acts La. 1869, 42), and act No. 92 of
1869, amending and reenacting the original act (Acts La. 1869, 92),
warrants issued in payment of the salaries of officers, employees,
and members of the Metropolitan police in accordance with Act No.
74 of 1868 were made receivable for all parish and municipal
licenses and taxes within the limits of the Metropolitan police
district, provided the aggregate so received in each current year
should not exceed the amount of the apportionment for that
year.
By Act No. 41 of 1870 (Acts La. 1870, 74), all warrants, checks,
and orders issued in payment of the salaries of Metropolitan
police, and all warrants, checks, and orders issued, or that might
thereafter be issued, for the supplies and expenses of the board,
were made receivable for all police and municipal taxes and debts
to become due for the police of New Orleans, Jefferson, and
Carrollton, provided that the aggregate of such warrants, checks,
or orders so received in each current year should not exceed the
apportionment.
By Act No. 33 of 1874 (Laws La. 1874, sec. 4, pp. 68, 70), it
was enacted, among other things, that all Metropolitan police taxes
should be collected in cash, and that it should be unlawful to
receive in payment for said taxes any warrants of indebtedness of
any kind whatever, provided that warrants and certificates issued
prior to January 1, 1874, should still be received for taxes due
for the years prior to that date.
In 1875 (Laws La. 1875, 35, No. 16) an act was passed to
Page 153 U. S. 426
the effect that the total amount of apportionments should be
divided into twelve equal parts, and that weekly settlements of
taxes collected should be made, and that whenever the City of New
Orleans, or any city or parish making part of the police district,
should fail to pay the full amount of its
pro rata share
for any month, the tax bills should be transferred to the
Metropolitan police board for collection.
By Act No. 35, passed at an extra session of the legislature in
1877, and approved March 31 (Acts La. Extra Sess. 1877, p. 57), the
acts of 1868, 1869, 1870, and 1875, above referred to, and other
acts upon the subject, were repealed, and the police system
transferred to the city.
It was ordained by the constitutional convention of 1879
"that all taxes and licenses due any parish or municipal
corporation prior to January 1, 1879, may be payable in any valid
warrants, scrip or floating indebtedness of said parish or
municipal corporation, except judgments."
Acts La. 1880, Constitution, etc., p. 68. And, by act No. 49 of
1880 (Laws La. 1880, p. 48), it was enacted that all parish or
municipal corporations should
"receive for all taxes and licenses due said parish or municipal
corporations prior to January 1, 1879, all valid warrants, scrip or
evidence of indebtedness of said parish or municipal corporations,
except judgments, without any discrimination as to what year said
warrants, scrip or evidence of indebtedness shall have been issued,
provided, that all valid Metropolitan police warrants or scrip for
the years 1874, 1875, and 1876 shall be receivable only for that
portion of the tax levied for the Metropolitan police fund and no
other, without any discrimination as to the year in which said
warrants were issued or said taxes levied."
This bill was framed upon the theory that the City of New
Orleans, the City of Kenner, and certain parishes were debtors for
the amount of the apportionments as to each of them made by the
police board during the eight years of its existence (from 1869 to
1876, inclusive), and that there was a large balance due on said
apportionments which constituted a fund for distribution among the
creditors of that board. The bill stated that the assets of the
board at the time it was abolished "were
Page 153 U. S. 427
the amounts due to it by said City of New Orleans and by the
other defendants, as herein stated," and that "the aggregate amount
of such indebtedness to said board largely exceeds the total amount
of its debts and liabilities." It was also, however, averred that
the City of New Orleans,
"annually, during the whole period of the existence of said
board, included in her budget of expenditures the amount thus
apportioned to her, and, in pursuance of said authority, levied
taxes for the purpose of paying the same,"
and
"has from day to day, and from year to year, ever since the
passage of the repealing Act of March 31, 1877, aforesaid,
continued to collect the taxes levied as aforesaid for the purpose
of paying the apportionments of said city for police expenses, as
aforesaid made, and notified thereto, and is now making such
collections and enforcing the payment of taxes levied for that
purpose, and now has a large sum of money thus realized, which is
applicable to the payment of said city's indebtedness to said board
of police, and ought to be distributed among the creditors of said
board in reduction of their claims, including those of your
orator."
The prayer of the bill was that an account be taken of the
debts, liabilities, and unpaid dues of every kind of said board of
Metropolitan police; that an account be taken of the amount due by
each of the defendants to the board "for the balances of their
unpaid apportionments of police expenses, as well as of all police
taxes collected by them, and withheld from said board;" that a
receiver be appointed, to whom the defendants be decreed to pay
their several
pro rata shares of the amount found to be
due to creditors of the board, including costs, and that the funds
thus realized be applied to the payment of complainant's warrants,
certificates, and claims, and of such other persons as may be
creditors of the board, and who should come in and establish their
claims, and also to the payment of interest, expenses, and costs.
The bill averred that, by Act No. 35 of 1877, Acts No. 74 of 1868,
No. 44 of 1869, No. 94 of 1870, and No. 16 of 1875, and other acts
not enumerated, were repealed, and the eleventh paragraph of the
bill contained the allegation upon which the contention rested that
the suit was one arising under the Constitution of the United
States, it
Page 153 U. S. 428
being averred
"that said repealing act was in violation of Section 10, Article
I, of the Constitution of the United States in that it impaired the
obligation of the contracts made by said board of Metropolitan
police with its officers and employees, and others to whom it was
indebted, and who had contracted with and rendered services to said
board upon the faith of said provisions of law for the enforced
payment and collection of the sums due to it as aforesaid from the
several cities and parishes within said district, out of which
funds, only, they could be paid, and to that extent said act was
and is null and void."
The City of New Orleans demurred to the bill for want of equity
because the city had never been liable as a debtor directly upon
the apportionments, and because, so far as the payment of the
warrants and certificates was enforceable through the levy of
taxes, such levy, if needed, could not be directed in this
proceeding. The demurrer was overruled, and the city answered. The
answer denied that the act of 1877 either changed, or attempted to
change or affect in any manner or degree the rights or remedies of
the holders of the warrants and certificates; denied that the
apportionments had ever been debts of the city, and averred that
they were designed simply as the basis on which the city was to
levy the Metropolitan police taxes; denied that tax levies already
made, or the means of collection, were interfered with, and
maintained that under the Metropolitan police acts, its only
liability was for taxes collected, of which it had then none in its
hands.
The jurisdiction in equity in this case is found in the
inadequacy of the remedy at law, either because the rights claimed
could not be enforced at law or because they could not be
administered in that forum. The bill was manifestly framed to bring
the case within the class in which receivers are appointed to
collect the assets and pay the creditors of a dissolved
corporation.
Broughton v. Pensacola, 93 U. S.
266,
93 U. S. 268;
Meriweather v. Garrett, 102 U. S. 472,
102 U. S. 527.
Indeed, it was expressly averred that the state courts had
proceeded upon that principle in respect of similar warrants and
certificates, and reference was made, in terms, to a decision of
the Supreme Court of Louisiana in that behalf.
Harrison v. City
of New
Page 153 U. S. 429
Orleans, 40 La.Ann. 509. The contention was that the
holders of these warrants had a right to bring an action at law
against the board of police to recover thereon, and that the
dissolution of the board left the complainants without remedy,
except in a court of equity, judgment and execution at law not
being required because impossible by reason of the dissolution of
the board. Therefore the court in chancery was appealed to to lay
hold of the assets of the board, as in the nature of a trust fund,
and apply them to the payment of the claims. Those assets, as shown
by the bill, were the apportionments, the tax levies, and the taxes
collected. These were the means provided by law for the payment of
debts created by the board, and, if they were left unaffected by
the repealing act, the alleged impairment had no basis to rest on.
That act was essentially a mere change of an instrumentality of
municipal government. It abolished the police organization
established in 1868 and vested in the city the function of
maintaining its own police. This legislation was not in
contravention of the Constitution of the United States, and was
enacted in the exercise of the undisputed power of the state in
that regard. In making the change, no obligation rested on the
state to create an independent and corporate successor of the board
or to provide for the application of its assets to the payment of
its debts if existing laws were ample to effect that purpose. In
that view, the City of New Orleans remained, for all purposes, so
far as creditors were concerned, the representative of the board,
and if the city were under a liability to pay the apportionments in
cash, it was not absolved from that liability by the dissolution of
the board. Although the creditors could not avail themselves of the
instrumentality of the board to sue for the apportionments (if that
could ever have been done), still, as those apportionments had all
been made, and taxes had been levied, and were in course of
collection, to pay them, or so much thereof as was needed to pay
the warrants and certificates, the act of 1877 left the City of New
Orleans to respond as before to the creditors in reference thereto,
and the remedies to which they could resort were quite as efficient
as they ever had been.
Page 153 U. S. 430
In
New Orleans v. Gaines' Administrator, 131 U.
S. 191, it was held that under the jurisprudence
prevailing in Louisiana, a creditor might exercise the rights of
action of his debtor, a right analogous to the garnishee or trustee
process in some states, and that this right could be enforced in a
federal court by a suit in equity, on the principle of subrogation.
But if this bill could be maintained on the doctrine therein
recognized, or if the equitable principle of apportionment, as
between parties charged with a common burden, were applicable as
justifying equity interposition, the result on the point under
consideration would be the same. Jurisdiction could not be obtained
upon the bare averment of an anticipation that the city might rely
on the repealing act as wiping out apportionments, tax levies, and
tax collections, and that the state courts would so decide. And the
bill made no such specific averment, with which, indeed, many of
its allegations were wholly inconsistent, while the defense of the
city not only rested on no such ground, but the answer denied that
the repealing act was susceptible of that construction, or could be
given that effect.
This would be equally true if, as suggested by counsel for the
city, the board could never have been treated as a debtor (unless
it had collected taxes under act No. 16 of 1875, and retained
them), inasmuch as it had nothing to do with raising the sums
apportioned to the local authorities, upon whom alone the duty was
devolved to accomplish that through the exercise of the power of
taxation, and the holders of warrants and certificates could, from
the first, only have resorted to the police fund created through
the medium of the annual apportionments.
In any aspect, the decision of the questions involved did not
depend on the federal Constitution. The construction or application
of that instrument in one way would not defeat complainants, nor,
in another, sustain them.
We are not dealing with a writ of error to review the final
judgment of the highest court of a state in a suit wherein the
validity of a statute of the state was drawn in question on the
ground of repugnancy to the Constitution of the United States,
Page 153 U. S. 431
and the decision was in favor of its validity, but with the
original jurisdiction of the circuit court, sought to be sustained
on the ground that the cause of action arose under, and was
dependent upon, the Constitution.
We are of opinion that the case made upon bill and answer did
not really and substantially involve a dispute or controversy as to
the effect or construction of the Constitution upon the
determination of which the result of the suit depended. Reference
is made in the argument to the fact that the city filed a demurrer,
which was overruled, but the first question is confined to the case
on bill and answer, and, moreover, the filing of the demurrer could
not, under the circumstances, give jurisdiction to the circuit
court if it did not otherwise exist.
This conclusion covers the second question, which specifically
inquires whether there was an impairment of the obligations of the
contract arising upon the warrants and certificates by reason of
the repeal of laws making them receivable in payment of licenses,
taxes, and other debts. Of course, there was no such impairment by
the act of 1877, if that act left in force substantially the mode
of payment of warrants provided by existing laws, and the bill did
not attack Act No. 33 of 1874, which suspended the tender of
warrants and certificates for taxes except for the years prior to
January 1, 1874, while under the ordinance of 1879, by Act No. 49
of 1880, the police warrants or scrip for 1874, 1875, and 1876 were
made receivable for police taxes without discrimination as to the
year in which the warrants were issued, or the taxes levied.
The bill did not claim the right assumed by the second question
to have been taken away, but it was insisted that the warrants and
certificates were payable "in cash," and it is argued that the act
of 1880 was itself an impairment, in making them receivable for
taxes, which might restrict their payment in money. The difficulty
with this second question is that the bill does not seek to compel
the city to receive the warrants and certificates for taxes, but,
on the other hand, demands that they be paid in cash, under the
theory that the
Page 153 U. S. 432
city owes the amount of the apportionments, or has taxes
collected on hand, so that no dispute or controversy as to the
receivability of the warrants and certificates, determinative of
the case, was involved.
The circuit court cannot be given jurisdiction by the suggestion
of the impairment of a contract in respect of which the complainant
seeks no relief, and there is here no averment raising such an
issue.
2. We have seen that the ground of equitable cognizance relied
on is that the holders of these warrants and certificates had the
right to bring an action at law against the board of police to
recover thereon, and that the dissolution of the board left the
complainants without remedy, except in a court of equity; judgment
and execution at law not being required because impossible by
reason of the dissolution of the board. It is insisted that the
city stands in the position of a debtor for taxes collected on
police board apportionments, and for the amount of the
apportionments themselves, so far as outstanding. If this were so,
and the police board were still in existence, and liable to suit,
then complainants would be obliged to recover judgment against the
board, and proceed against the city by way of creditor's bill to
enforce the collection. Granting that this could be done without
judgment after and because the board had ceased to exist,
nevertheless the claims of complainants must be established under
the bill precisely as they would have to be in an action at law.
Although it is ingeniously said that the suit is one to "establish
a fund," this does not change the fact that it is a suit to recover
on the warrants and certificates, and then enforce their payment by
a decree over against the city. The establishment of a fund is, in
this instance, only another name for the ascertainment of an
indebtedness of the city to the board, available to the creditors
of the board after their claims, as such, are judicially
determined.
By the first section of the Act of March 3, 1887, c. 373, 24
Stat. 552, amendatory of the act determining the jurisdiction of
circuit courts of the United States, as corrected by the Act of
August 13, 1888, c. 866, 25 Stat. 433, no circuit or district
Page 153 U. S. 433
court has cognizance of any suit to recover the contents of any
promissory note or other chose in action in favor of an assignee
unless such suit might have been prosecuted in such court to
recover the said contents if no assignment or transfer had been
made.
This provision was taken from the eleventh section of the
Judiciary Act of 1789, and carried forward into section 629 of the
Revised Statutes, and was designed to prevent the evasion of the
discrimination in respect of suits between citizens of the same
state, and suits between citizens of different states, established
by the Constitution and laws of the United States.
It appears in the Act of March 3, 1875, c. 137, 18 Stat. 470, in
somewhat different phraseology, and the restriction as to suits on
promissory notes was removed, but restored by the act of 1887.
In
Sheldon v.
Sill, 8 How. 441, it was held, under the act of
1789, that the endorsee of a negotiable promissory note, secured to
the payee by a mortgage, could not sue in the courts of the United
States to foreclose the mortgage unless the mortgagee could, but
this was necessarily ruled otherwise under the act of 1875.
Tredway v. Sanger, 107 U. S. 323.
As remarked by Mr. Justice Blatchford in
Corbin v. County of
Black Hawk, 105 U. S. 659,
105 U. S.
665,
"The contents of a contract as a chose in action, in the sense
of section 629, are the rights created by it in favor of a party in
whose behalf stipulations are made in it which he has a right to
enforce in a suit founded on the contract, and a suit to enforce
such stipulations is a suit to recover such contents."
In that case, it was held that a suit to compel the specific
performance of a contract or to enforce its other stipulations is a
suit to recover the contents of a chose in action, and not
maintainable in the circuit court by an assignee if it could not
have been prosecuted there by the assignor had no assignment been
made.
In
Shoecraft v. Bloxham, 124 U.
S. 730,
124 U. S. 735,
it was said by MR. JUSTICE FIELD that the terms used in the statute
"were designed to embrace the rights the instrument conferred which
were capable of enforcement by suit."
And see Plant Investment
Co. v. Key West Railway Co., 152 U. S. 71.
Page 153 U. S. 434
In
Walker v. Powers, 104 U. S. 245, it
was held that the assignee of a judgment founded on contract could
not maintain a suit thereon in a court on the United States unless
such a suit might have been prosecuted there if an assignment had
not been made.
Mississippi Mills v. Cohn, 150 U.
S. 202.
The facts in
Ober v. Gallagher, 93 U. S.
199, were these: Thompson, a citizen of Louisiana,
purchased from Fleming, a citizen of Arkansas, a plantation
situated in Arkansas, and gave his notes for the purchase price,
secured by a lien reserved in the conveyance, which notes Fleming
transferred to Gallagher, a citizen of Louisiana. Gallagher
afterwards sued Thompson in a court of Louisiana and recovered
judgment. At the time of the purchase, there was a judgment in
Arkansas against Fleming, upon which the lands were sold and
conveyed to Ober, to whom Thompson also conveyed them. Gallagher
afterwards filed his bill against Ober, a citizen of Arkansas, and
Thompson, who had become a citizen of Tennessee, praying that the
land might be compel the city to receive the warrants and deed of
Fleming to Thompson, to the payment of his judgment. Fleming at the
time of the commencement of the suit, had also become a citizen of
Tennessee, and it was objected that as Fleming and Thompson had
both become citizens of Tennessee, and therefore Fleming could not
sue Thompson in the courts of the United States, Gallagher could
not maintain the suit. But this Court held that Gallagher, a
citizen of Louisiana, was entitled to enforce the lien on the land
in Arkansas against Ober, a citizen of Arkansas, and Thompson, a
citizen of Tennessee, in collection of the judgment in which the
note had become merged.
Mr. Justice Story, in
Bean v. Smith, 2 Mason 252, held
that the circuit court had jurisdiction, on the ground of diverse
citizenship, in a suit in equity brought by a judgment creditor to
set aside conveyances made after suit commenced, and a few days
before the term at which judgment was expected to be obtained, in
fraud of such creditor, although the judgment was recovered in the
state court on a negotiable chose in action, on which, before
judgment, a suit could not have been maintained in the circuit
court. But there, as Mr. Justice Story
Page 153 U. S. 435
observed, the right to sue the fraudulent grantees was not a
right which had vested in another person and passed to complainant
by assignment, and, as to the fraudulent grantor, the right was a
new right growing out of a direct judgment between the parties, and
a fraud injurious to complainant, which had been devised to avoid
the satisfaction of that judgment.
The case before us is not of that character. If the board had
not been abolished, judgment could not have been recovered against
it by complainants in the circuit court, and if a judgment had been
recovered by them in the state court, a creditor's bill would have
been merely ancillary to the judgment, and could not have been
entertained in the circuit court as an original bill. Upon the
facts appearing in this record, the assignees would have acquired
no new and independent right of recovery, by reason of the
judgment, not possessed by the assignors. The board being
abolished, recovery of a judgment was dispensed with, but the
establishment of the claims was still required as the basis for
further relief, and that relief involved nothing more than recovery
over, or a direct decree, within the principles of
New Orleans
v. Gaines' Adm'r, supra, analogous to judgment on garnishee
process. The suit must therefore be regarded as a suit to enforce
the payments of the warrants and certificates, and as such, a suit
to recover their contents, and this is so on any other ground of
equity jurisdiction which has been suggested.
In our judgment, the pleadings show a suit to recover the
contents of choses in action, and as the bill contained no averment
that it could have been maintained by the assignors if no
assignments had been made (from the statement accompanying the
certificate it appears affirmatively that it could not), the
jurisdiction of the circuit court cannot be sustained on the ground
of diverse citizenship.
The first question is answered in the negative, and the
third in the affirmative, and it will be so certified.
MR. JUSTICE WHITE took no part in the consideration and decision
of this case.
