l. If by any direction of a supreme court of a state an entire
cause is determined, the decision, when reduced to form and entered
in the records of the court, constitutes a final judgment, whatever
may be its technical designation, and is subject in a proper case
to review by this Court.
So held where, upon appeal from
an interlocutory order made by a circuit court of Indiana granting
a temporary injunction, the supreme court of the state reversed the
order and remanded the cause to the lower court with directions to
dismiss the complaint.
2. Unless restrained by provisions of its constitution, the
legislature of a state
Page 93 U. S. 109
possesses the power to direct a restitution to taxpayers of a
county or other municipal corporation of property exacted from them
by taxation, into whatever form the property may be changed, so
long as it remains in possession of the municipality. The exercise
of this power infringes upon no provision of the federal
Constitution.
By an act of the Legislature of Indiana, passed on the twelfth
day of May, 1869, counties and townships in that state were
authorized to aid in the construction of railroads, by taking stock
in railroad companies, and making donations to them. Before giving
the aid, it was necessary for the officers of the county, the board
of commissioners, to consult the electors of the county upon the
subject, and obtain their approval of the proceeding at an election
called for that purpose. Such approval having been obtained from
the electors of Tippecanoe County, the board of commissioners of
the county, during the years 1871, 1872, and 1873, subscribed and
paid for stock in the Lafayette, Muncie & Bloomington Railroad
Company, a corporation organized under the laws of the state, and
engaged at the time in building a railroad passing through the
county. The stock thus subscribed and paid for amounted to six
thousand six hundred and ten shares, of the par value of fifty
dollars a share, and for them the company issued its certificates
to the commissioners. The money with which the stock was paid was
collected by a special tax levied for that purpose. The act
provided for collecting the money before the subscription could be
made.
Afterwards, on the 17th of December, 1872, the legislature
passed an act
"to require railroad companies to issue stock, paid for by taxes
voted in aid of the construction of their railroads, to the
taxpayers or their assigns, and to issue unclaimed stock for the
benefit of the common school fund."
This act provided, that, in all cases where stock had been taken
by counties and paid for from taxes levied and collected under the
act of May, 1869, it should be the duty of the treasurer of the
proper county, upon request prior to Jan. 1, 1874, to issue to the
several taxpayers living, and to the personal representatives of
such as may have died, a certificate, stating the amount of tax
paid by them respectively, the date of payment, and the
Page 93 U. S. 110
name of the company in aid of which the tax was paid, as the
fact should appear from the proper tax duplicates and record in his
office.
The certificates thus issued were made assignable, and any
lawful holder could present and surrender them to the proper
company previous to Jan. 1, 1874, in sums equal in amount to any
number of shares, and it was made the duty of the company to issue
a certificate of paid-up capital stock to the amount of the
certificate of taxes paid which was surrendered. For the stock
unclaimed within the time designated a certificate was to issue to
different townships in the county, for the benefit of the common
school fund. The act declared that the issuing of the stock to
individuals or townships, as thus provided, should operate to
cancel
pro tanto the stock held by the county under the
provisions of the act of May, 1869.
The present complaint was filed by the commissioners of the
county in the Tippecanoe Civil Circuit Court, to restrain the
treasurer of the county from issuing to taxpayers the certificates
of taxes paid, as provided by the act of 1872. The treasurer had
previously, against the remonstrance of the commissioners, issued a
number of certificates to different parties, and declared his
intention to issue certificates to all parties applying who were
entitled to receive them under the act. In the complaint, the
commissioners denied the power of the state to take the stock, or
any part of it, from them and give it to individuals for their
private benefit, and alleged that by the issuing of the
certificates their right was made questionable, a cloud was cast
upon their title, and the market value of the stock held by them
was destroyed, and that they were deprived of their rights as
stockholders in the company. They therefore prayed that a temporary
injunction be granted against the treasurer, and that it might be
made perpetual on the hearing.
The complaint was verified, and after notice and argument of
counsel, an order was made granting a temporary injunction, as
prayed. On appeal to the supreme court of the state, the order, or
the judgment, as it is termed in the language of the record, was
reversed, and the cause remanded to the lower court, with
instructions to dismiss the complaint. From this judgment the cause
is brought to this Court on a writ of error.
Page 93 U. S. 113
MR. JUSTICE FIELD, after making the foregoing statement of the
case, delivered the opinion of the Court.
It is objected
in limine that this Court has no
jurisdiction of the cause, on the alleged ground that the judgment
rendered is not a final judgment. The order of the circuit court,
granting a preliminary injunction was, it is true, interlocutory,
and, if the judgment of the supreme court of the state had been
limited to a simple reversal, the objection would have been
tenable. The cause would then have remained in the circuit court
for further proceedings. But the direction to that court,
accompanying the reversal of its order to dismiss the complaint,
made a final disposition of the cause. With the entry of that
judgment the cause was at an end. With the peculiarities of the
practice of the Indiana courts we have nothing to do. If, upon an
appeal from an interlocutory order, a final disposition of the
merits of a cause can be made in that state, it is no concern of
ours. If by any direction the entire cause is in fact, determined,
the decision, when reduced to form and entered
Page 93 U. S. 114
in the records of the court, constitutes a final judgment,
subject in a proper case to our review, whatever may be its
technical designation. The course adopted in this case was
evidently pursued, from the fact that the whole merits of the
controversy had been considered on the motion for the preliminary
injunction. The application was founded upon the alleged invalidity
of the act of 1872; no other matter was discussed, and all
objections of form in the proceeding were waived, that the validity
of the act might be considered and determined. Being determined
against the view advanced by the plaintiffs, the cause, so far as
the state courts were concerned, was practically at an end.
In this Court also, the validity of the act of 1872 is the sole
question presented. The act is assailed here, as in the court
below, as authorizing an invasion of the right of private property,
and as impairing the obligation of an executed contract. Were the
transaction one between the state and a private individual, the
invalidity of the act would not be a matter of serious doubt.
Private property cannot be taken from individuals by the state,
except for public purposes, and then only upon compensation, or by
way of taxation, and any enactments to that end would be regarded
as an illegitimate and unwarranted exercise of legislative power.
And any attempt by the legislature to take private property from
its grantee, and restore it to its grantor, would be in conflict
with the constitutional inhibition against impairing the obligation
of contracts.
But between the state and municipal corporations, such as
cities, counties, and towns, the relation is different from that
between the state and the individual. Municipal corporations are
mere instrumentalities of the state, for the convenient
administration of government, and their powers may be qualified,
enlarged, or withdrawn, at the pleasure of the legislature. Their
tenure of property, derived from the state for specific public
purposes, or obtained for such purposes through means which the
state alone can authorize -- that is, taxation -- is so far subject
to the control of the legislature that the property may be applied
to other public uses of the municipality than those originally
designated. This follows from the nature of such bodies, and the
dependent character of their existence.
Page 93 U. S. 115
But property, derived by them from other sources, is often held,
by the terms of its grant, for special uses, from which it cannot
be diverted by the legislature. In such cases, the property is
protected by all the guards against legislative interference
possessed by individuals and private corporations for their
property. And there would seem to be reasons equally cogent, in
abstract justice, against a diversion by the legislature from the
purposes of a municipality of property raised for its use by
taxation from its inhabitants. There are probably provisions in the
constitutions of the several states which would prevent any marked
diversion in that way; but whether a contract between the state and
the municipality, within the protection of the federal
Constitution, is implied in such cases, that the property acquired
shall not be diverted from the purposes of the municipality and
appropriated to other uses, is a question we are not now called
upon to determine. In the present case, it is not necessary for us
to go over the ground, so ably explored by the judges of the
Supreme Court of Indiana, and attempt to mark the line within which
the state may control and dispose of property held by a municipal
corporation, and beyond which its action is subject to the same
restraints as are its dealings with the property of individuals. It
is enough that the present case is free from difficulty. Here there
is no attempted diversion of the property from the purpose for
which it was acquired; that purpose has been accomplished. The
money having been obtained by compulsory contribution from the
inhabitants, the legislature could undoubtedly have directed its
restitution to them at any time before the subscription was made.
If the road had been previously built, and the aid contemplated had
thus become unnecessary, such restitution would have been proper
and just. Numerous cases might be named where the return of taxes
collected would be the only just proceeding to be taken. Money
raised for a special emergency may not be required by the emergency
ceasing.
The changed condition of the property collected in this case, by
its use in paying for the stock subscribed, could not affect the
power of the state; it only made the subsequent distribution of the
property to the taxpayers a matter of greater difficulty. Nor could
the fact, that the commissioners of the county
Page 93 U. S. 116
took the certificate in their name for the stock subscribed,
remove the property from the control of the state. The
commissioners took the stock not to hold as an investment which was
to yield an annual revenue to the county, but to aid in the
construction of a work in which the public were interested -- a
railroad through the county. As justly observed by counsel, the
management of the affairs of a railroad company is no part of the
proper business of a county; and when the purpose designed by the
subscription was accomplished, it was sound policy to relieve the
county officers from any participation in such management. Of the
power of the state to direct a restitution to taxpayers of a
county, or other municipal corporation, of property exacted from
them by taxation, into whatever form the property may be changed,
so long as it remains in possession of the municipality, we have no
doubt. The exercise of the power infringes upon no provision of the
federal Constitution. Further than this, it is not necessary for us
to go for the disposition of this case.
Judgment affirmed.
