The contract right of a coupon holder under the Virginia Act of
March 30, 1871, whereby his coupons are receivable in payment of
taxes, can be exercised only by a taxpayer, and a bill in equity
for an injunction to restrain tax collectors from refusing to
receive them when tendered in payment of taxes will not lie in
behalf of a coupon holder who does not allege himself to be also a
taxpayer. Such a bill calls for a decree declaring merely an
abstract right, and does not show any breach of the contract or
other ground of relief.
MR. JUSTICE MATTHEWS delivered the opinion of the Court.
The appellee, who was complainant below, a citizen of New York,
filed his bill in equity in the Circuit Court of the United States
for the Eastern District of Virginia against Morton Marye,
described as "Auditor of the Commonwealth of Virginia;" Samuel C.
Greenhow, Treasurer of the City of Richmond; A. L. Hill Treasurer
of the City of Norfolk, and V. G. Dunnington, Treasurer of the City
of Lynchburg; R. B. Munford, Commissioner of Revenue for the City
of Richmond; Charles W. Price, for the City of Lynchburg, and
Charles D. Langley, for the City of Norfolk; all citizens of
Virginia.
The complainant avers in his bill that he is the owner of
overdue coupons to the amount of $28,010, cut from bonds of the
State of Virginia issued under the Act of March 30, 1871, which
coupons are receivable, by the terms of that act, in payment at and
after maturity, for all taxes, debts, and demands due the state. A
list of these coupons, described by the numbers and amounts of the
bonds, is exhibited with the
Page 114 U. S. 326
bill. He claims that these coupons constitute a contract with
the state by which it agreed to pay the amount of each to the
holder at maturity, and second, in case of default, that the holder
should have the right to assign or transfer the same to any
taxpayer or other debtor of the state, with the quality of being
received for taxes and other demands due the state and with the
guarantee that the state would receive them specifically in payment
pro tanto for any such taxes and demands, and that they
should be accepted by any of her tax collectors from any of her
taxpayers or debtors in discharge and payment of such taxes or
other dues.
The defendants to the bill, it is alleged, are officers of the
state, charged severally with the collection of certain taxes and
license fees and other dues to the state, and it is charged that in
pursuance of certain statutes passed since the Act of March 30,
1871, and the issue of the bonds and coupons under it, they are
forbidden to receive these and similar coupons in payment of taxes
and other dues to the state, which statutes, it is averred, impair
the obligation of the contract between the state and the holder of
its coupons, and are accordingly in violation of the Constitution
of the United States, and are null and void; but that nevertheless
the defendants, as officers of the state, as is publicly known,
habitually refuse to accept coupons when tendered by taxpayers, in
payment of taxes and other dues to the state, with the collection
of which they are severally charged, and the General Assembly of
Virginia has also passed statutes repealing all laws which provided
any remedy for the enforcement of the right to have them so
received.
The bill then proceeds as follows:
"And your petitioner furthermore shows that confiding in his
right to a specific performance of said contract, and in his title
to equitable relief, should the same be denied, he hath made
arrangements with sundry taxpayers of Virginia to use his above
coupons in payment of their taxes and license taxes, now due, by
which arrangement, if the said coupons can be used without delay or
difficulty, he will receive nearly par therefor, and thus be able
to have his coupons collected.
Page 114 U. S. 327
But unless they are so accepted in payment when tendered, the
said taxpayers will not use them at all, because they are compelled
to pay their taxes forthwith under heavy penalties, and to obtain
their licenses immediately or cease from business, so that if the
collectors of these taxes continue to refuse to accept these
coupons, and so render necessary an appeal to the courts, and a
separate action by each taxpayer upon each tender, such refusal
will be tantamount to an utter destruction of the rights of your
petitioner, because delays will thus occur which the taxpayers
cannot submit to for the above-named reasons and others, and thus
your petitioner will be deprived of the benefit of the arrangements
he has made, as well as of all opportunity of having his coupons so
used at any time save in small amounts and at rare intervals."
The prayer for relief is as follows:
"In tender consideration whereof, and inasmuch as your
petitioner is without adequate relief save in a court of equity,
wherein such matters are properly cognizable, and inasmuch as he
will suffer great and irreparable loss and damage, exceeding $500
in amount, unless relief is afforded him immediately, and the
above-named officers are required to perform specifically the
contract aforesaid, and receive his said coupons in payment of all
or any of the dues and taxes above-named immediately upon their
being tendered therefor by any taxpayer or applicant for a license,
and to avoid a multiplicity of suits and prevent an obstruction of
justice, he prays that Morton Marye, Auditor of Virginia, Samuel C.
Greenhow, A. L. Hill and V. G. Dunnington, Treasurers of the Cities
of Richmond, Norfolk, and Lynchurg, respectively, and R. B.
Munford, Charles D. Langley, and Charles W. Price, Commissioners of
the Revenue for said cities, respectively, be made parties
defendant hereto, with apt words to charge them, and may be
required on oath to answer fully the allegations hereof."
"And that the said defendants, their assistants, clerks, and
agents be required and compelled to specifically perform the said
coupon contract according to its legal tenor and effect, and to
accept your orator's said coupons or any of them from any taxpayer
presenting them or any of them in payment of
Page 114 U. S. 328
his taxes, license taxes, or other dues and to receipt therefor
or certify the payment and deposit thereof in cases of applications
for license in precisely the same form and with precisely the same
force and effect as they would do if said tender, payment, or
deposit were made in money. And that your honors will decree said
coupons to be genuine, legal coupons, legally receivable for all
taxes, debts, and demands due the State of Virginia, and especially
for all license taxes or assessments by whatever name the same may
be called. And to the end that your orator may have full relief in
the premises, he also prays that a preliminary restraining order
and injunction may be issued without delay enjoining and
restraining the said defendants, their assistants, clerks, and
agents and each and every one of them from refusing to accept any
of the coupons named in the Exhibit A herewith in full payment
pro tanto of the taxes, license taxes, or other dues due
by any taxpayer to the state who may tender the same in payment
thereof, and enjoining and restraining them from refusing to
execute and deliver forthwith to such taxpayer his tax bill, duly
receipted, or to an applicant for a license a certificate that the
amount of coupons tendered by such applicant has been deposited
with him in payment of the tax or deposit required or assessed for
said license, and from refusing, immediately upon the presentation
of such certificate, to grant and issue the license applied for to
such applicant, all in the same manner, and to have precisely the
same force and effect as if said payments were made in coin or
currency."
There is also a prayer for general relief.
There was a final decree on bill, answer, replication, and
proofs, granting the injunction as prayed for, and the defendants
appealed.
This bill is without precedent, and should have been dismissed.
It is a clear case, as stated, of
damnum absque injuria.
So far as the contract with the complainant was that the state
should pay to him his coupons at maturity, there is, no doubt, a
breach, but he asks no relief as to that, for there is no remedy by
suit to compel the state to pay its debts. So far as the contract
was to receive the coupons of the complainant
Page 114 U. S. 329
in payment of taxes and other dues to the state, there is no
breach, for he does not allege that any of them have been tendered
by any taxpayer or debtor to the state in payment of taxes or other
dues, nor that there has been a refusal on the part of any tax
collector or other officer of the state charged with the collection
and receipt of taxes and dues to the state to receive them in
payment therefor. Personally the complainant has no right to offer
them for such purpose, for he owes no taxes or other debt to the
state. There is nothing shown in the bill by which he is prevented
from transferring them to others who would have the legal right to
use them in that way, except that, being discredited for such uses
by the previous refusals of the officers of the state to receive
other but similar coupons, the complainant can find no one willing
to purchase them from him at a reasonable price for such purposes.
This damage is not actionable, because it is not a direct and legal
consequence of a breach of the contract, and is not distinguishable
from the damage any creditor might suffer from the known inability
or unwillingness of his debtors to perform their obligations. Such
discredit might, and often does, result in the bankruptcy and
financial ruin of the creditor, but no action lies to recover
damages for the consequential loss, which the law does not connect
with the default, as cause and effect. To enable the complainant to
avail himself of the benefit of his contract with the state to
receive his coupons in payment of taxes, he must first assign them
to someone who has taxes to pay, as he has not; but when he does
so, by the assignment he has lost his interest in the contract and
his right to demand its performance, all right to which he has
transferred with the coupons. It is only when in the hands of
taxpayers or other debtors that the coupons are receivable in
payment of taxes and debts due to the state.
The bill as framed therefore calls for a declaration of an
abstract character that the contract set out requiring coupons to
be received in payment of taxes and debts due to the state is
valid; that the statutes of the General Assembly of Virginia
impairing its obligations are contrary to the Constitution of the
United States, and therefore void, and that it is the legal
Page 114 U. S. 330
duty of the collecting officers of the state to receive them
when offered in payment of such taxes and debts.
But no court sits to determine questions of law
in
thesi. There must be a litigation upon actual transactions
between real parties, growing out of a controversy affecting legal
or equitable rights as to person or property. All questions of law
arising in such cases are judicially determinable. The present is
not a case of that description.
The decree of the circuit court is accordingly reversed, and
the cause is remanded with directions to dismiss the bill.
MR. JUSTICE BRADLEY, with whom concurred THE CHIEF JUSTICE, MR.
JUSTICE MILLER, and MR. JUSTICE GRAY, dissenting.
THE CHIEF JUSTICE and JUSTICES MILLER, GRAY, and myself dissent
from the opinions and judgments of the majority of the Court in
which they sustain the claims of the holders of coupons against the
State of Virginia, and I have been requested to state the grounds
on which our dissent is based. And first, those which apply to the
case of the Baltimore and Ohio Railroad Company. This company is a
corporation of the State of Maryland, and operates, as lessee,
certain railroads situated in Virginia. It filed a bill in equity
in the Circuit Court of the United States for the Western District
of Virginia alleging a tender of coupons in payment of the taxes
due upon the railroads in its possession and praying for a decree
declaring that such tender, with a deposit of the coupons in court
amounted to payment, and that the proceedings of the auditor in
imposing a penal assessment for pretended nonpayment of the taxes
were void, a and that an injunction be issued to restrain the
treasurer from seizing or selling any of the property of the
company for the said taxes.
The fundamental ground of our dissent is that this proceeding,
and all the other proceedings on these coupons brought here for our
review, are virtually suits against the State of Virginia to compel
a specific performance by the State of her agreement to receive the
said coupons in payment of all taxes, dues, and demands. However
just such a proceeding may seem in the abstract, or however willing
courts might be to sustain
Page 114 U. S. 331
it if it were constitutional, yet, looking at the case as it
really is, we regard it as directly repugnant to the Eleventh
Amendment of the Constitution, which declares that
"The judicial power of the United States shall not be construed
to extend to any suit in law or equity commenced or prosecuted
against anyone of the United States by citizens of another state or
by citizens or subjects of any foreign state."
The counsel for the bondholders press upon our attention that
provision of the Constitution which declares that no state shall
pass any law impairing the obligation of a contract, and insist
that the laws passed by the Legislature of Virginia forbidding the
receipt of coupons for taxes, since the passage of the act of 1871
by which they were made receivable, are unconstitutional and
absolutely void, and that no officer or tax collector of the state
is bound to regard, but, on the contrary, each is bound to
disregard, them. So that we have one provision of the Constitution
set up against the other, and are asked to enforce that relating to
contracts by regarding the individual officers as the real parties
proceeded against, and ignoring the fact that, in the matter of
receiving coupons in payment of taxes, the officers only represent
the state. By this technical device it is supposed that the
Eleventh Amendment may be evaded. In our opinion, this is not a
sound or fair interpretation of the Constitution. If the contract
clause and the Eleventh Amendment come into conflict, the latter
has paramount force. It was adopted as an amendment to the
Constitution, and operates as an amendment of every part of the
Constitution to which it is at any time found to be repugnant.
Every amendment of a law or Constitution revokes, alters, or adds
something. It is the last declared will of the lawmaker, and has
paramount force and effect. The states became dissatisfied with
certain parts of the Constitution as construed by the courts,
whereby, in a manner not anticipated, they were subjected to be
dragged into court like a common delinquent at the suit of
individuals. They demanded that this should be changed, and it was
changed by the Eleventh Amendment. The language of the Constitution
was not changed, but it became subject and subordinate to the
paramount declaration of
Page 114 U. S. 332
the amendment. The Constitution still declares that no state
shall pass any law impairing the obligation of a contract, but the
effect of the amendment is that even if a state should pass a law
impairing the validity of its own contract, no redress can be had
for the enforcement thereof against the state in the federal
courts. In other words, in consequence of the amendment, no state
can be coerced into a fulfillment of its contracts or other
obligations to individuals by the instrumentality of the federal
judiciary. It is true, it cannot proceed against them contrary to
its contract, but, on the other hand, it cannot be proceeded
against on its contract. All those who deal with a state have full
notice of this fundamental condition. They know, or are bound to
know, that they must depend upon the faith of the state for the
performance of its contracts, just as if no federal Constitution
existed, and cannot resort to compulsion unless the state chooses
to permit itself to be sued.
Moreover, the Eleventh Amendment is not intended as a mere
formula of words, to be slurred over by subtle methods of
interpretation so as to give it a literal compliance without
regarding its substantial meaning and purpose. It is a grave and
solemn condition, exacted by sovereign states for the purpose of
preserving and vindicating their sovereign right to deal with their
creditors and others propounding claims against them, according to
their own views of what may be required by public faith and the
necessities of the body politic. We have no right, if we were
disposed, to fritter away the substance of this solemn stipulation
by any neat and skillful manipulation of its words. We are bound to
give it its full and substantial meaning and effect. It is only
thus that all public instruments should be construed.
Now what is the object of all this litigation which fills our
courts in reference to the Virginia bonds and coupons but an
attempt, through the medium of the federal courts, to coerce the
State of Virginia into a fulfillment of her contract? To enforce a
specific performance of her agreement? It is nothing less. That is
the object of the bill in the case of the Baltimore and Ohio
Railroad Company. That is the object
Page 114 U. S. 333
of the bill of Parsons against the state auditor and others.
That is also the object of those actions of detinue and trespass
which are brought against the collectors of Richmond and other
places. Injunctions are sought, mandamuses are sought, damages are
sought, for the sole purpose of enforcing a specific performance of
the engagement made by the state, by the act of 1871, to receive
the coupons of its bonds issued under that act in payment of taxes
and other dues to the state.
There is no question about the validity of the taxes. They are
admittedly due. The officer is entitled to collect them; his
authority is undisputed. The coupons are tendered in payment not as
money, for they have no quality of money, but as a setoff which, as
is insisted, the state has agreed to allow. The taxpayer stands on
this agreement. That is the situation, and that is the whole of it.
He stands on the agreement, and seeks to enforce it. All suits
undertaken for this end are, in truth and reality, suits against
the state to compel a compliance with its agreement.
A setoff is nothing but a cross-action, and can no more be
enforced against a state without its consent than a direct action
can be. When setoffs are allowed against the sovereign, it is
always by virtue of some express statute.
It is argued, however, that these coupons are not setoffs, but
cash. How it can be pretended that they are cash it is difficult to
comprehend. To regard them as cash would make them unconstitutional
and void under that clause of the Constitution which prohibits any
state from emitting bills of credit. But it is insisted that if not
cash, the state agreed that they should be received as cash. Then
it is the agreement which is relied on, and, as before said, it is
the performance of this agreement which is sought to be
enforced.
Another argument made use of to show that the coupons are not
setoffs is that, by virtue of the agreement to receive them in
payment, they inhere in the claim for taxes as a ground of
extinguishment, and not as a distinct counter-demand. This cannot
be true, because taxes imposed by the state or by its authority are
pure and unmixed duties, accruing year by year for the public
service, without any relation to, or dependence
Page 114 U. S. 334
upon, collateral obligations. Whether the taxpayer has or has
not any coupons is an accidental circumstance in no way affecting
his taxes. If he has them and does not tender them, his taxes must
be paid; if he has them and does tender them, they can only be
tendered by way of setoff, for, as we have seen, they have no
necessary connection with or relation to the taxes until they are
so tendered.
The coupons, then, are tendered, and the tax collector declines
to receive them. The state does not permit him to receive them. By
subsequent legislation, it has declared that the taxes must be paid
in money, and that the tax collector must receive nothing else in
payment, and that coupons, if offered, must be investigated in a
juridical way to ascertain their genuineness before they will be
paid, and when so ascertained, the provision for paying them is
ample. The officers have no power but what the state gives them.
They act for and on behalf of the state, and in no other way. To
sue them, therefore, because they will not receive the coupons in
payment is virtually to sue the state. The whole object is to
coerce the state. To say otherwise is to talk only for effect,
without regard to the truth of things.
If the taxes were not due, or were unconstitutional, and the
collector should attempt to collect them, by seizing property or
otherwise, it would be a different thing. There would then be an
invasion of the citizen's property without lawful authority. That
would be a trespass on the part of the officer for which he would
be properly liable in suit. So if the taxpayer should tender the
amount of his tax in lawful money, and the collector should refuse
it, and should proceed to distrain for the tax, then he would also
be a trespasser.
But neither of these things is this case. The tax is due --
undisputedly due; no money is tendered; the taxpayer only offers to
set off the coupons, which are nothing but due-bills of the state,
and pleads the state's collateral agreement to receive them. This
is not money, and bears no resemblance to money. It is simply a
promise. The state, for reasons of its own, declines to comply with
its agreement in mode and form, and forbids its officers to receive
the coupons in payment of
Page 114 U. S. 335
taxes. The taxpayer insists that the state shall comply with its
agreement. All the proceedings instituted by him to enforce the
receipt of the coupons, or to obtain redress against the collector
for not receiving them, or for proceeding to collect the tax, have
that object alone in view -- to compel the state to fulfill its
agreement. It is idle to say that the proceeding is only against
the officers. That is a mere pretense. The real object is to coerce
the state through its officers; to compel a specific performance by
the state of its agreement. It all comes back to this.
But it is said that it is not the state, but the government of
the state, which declines to receive the coupons, contrary to
engagement. It is said that the government does not represent the
state when it does an unconstitutional act or passes an
unconstitutional law. While this may be averred (as it was averred
in
Texas v.
White, 7 Wall. 700) when the government of a state
attempts to force the state from its constitutional relations with
the United States and to produce a disruption of the fundamental
bonds of the national compact, and while in such a case it may be
admissible to say that the government of the state has exercised a
usurped authority, this mode of speech is not admissible in
ordinary cases of legislation and public administration. A state
can only act by and through its constituted authorities, and it is
represented by them in all the ordinary exhibitions of sovereign
power. It may act wrongly; it may act unconstitutionally; but to
say that it is not the state that acts is to make a misuse of
terms, and tends to confound all just distinctions. It also tends,
in our judgment, to inculcate the dangerous doctrine that the
government may be treated and resisted as a usurpation whenever the
citizen, in the exercise of his private judgment, deems its acts to
be unconstitutional.
But then it will be asked has the citizen no redress against the
unconstitutional acts or laws of the state? Certainly he has. There
is no difficulty on the subject. Whenever his life, liberty, or
property is threatened, assailed, or invaded by unconstitutional
acts or by an attempt to execute unconstitutional laws, he may
defend himself in every proper way by
Page 114 U. S. 336
habeas corpus, by defense to prosecutions, by actions brought on
his own behalf, by injunction, by mandamus. Any one of these modes
of redress suitable to his case is open to him. A citizen cannot in
any way be harassed, injured, or destroyed by unconstitutional laws
without having some legal means of resistance or redress. But this
is where the state, or its officers, moves against him. The right
to all these means of protection and redress against
unconstitutional oppression and exaction is a very different thing
from the right to coerce the state into a fulfillment of its
contracts. The one is an indefeasible right, a right which cannot
be taken away; the other is never a right, but may or may not be
conceded by the state, and if conceded, may be conceded on such
terms as the state chooses to impose.
All the cases that are cited from the books in which redress has
been afforded to individuals by the courts against state action are
cases arising out of the first class, and not out of the second --
cases of state aggression, and not of refusal to fulfill
obligations. The case of
Osborne v. The United States
Bank, 9 Wheat. 738, was of that class; so was that
of
Dartmouth College v.
Woodward, 4 Wheat. 518; so was that of
New Jersey v.
Wilson, 7 Cranch 165. So, if looked at carefully,
were those of
Davis v. Gray,
16 Wall. 203, and
Board of Liquidation v. McComb,
92 U. S. 531,
although these last cases approach nearer to suits against a state
than any others which have received the sanction of this Court. In
all these cases, the state has attempted to do some
unconstitutional act, injurious to the party, or some act which it
had entered into a contract not to do, and redress was sought
against such aggressive act; they, none of them, exhibit the case
of a state declining to pay a debt or to perform an obligation, and
the party seeking to enforce its performance by judicial
process.
As for the great mass of cases in which the remedies of mandamus
and injunction have been sanctioned to compel state officers to do
or refrain from doing some act in which the plaintiff had an
interest, they have generally been cases in which the law made it
the duty of the officers to do the act commanded or not to do the
act forbidden. Those of a different
Page 114 U. S. 337
character, as where a remedy has been taken away, have been
purely cases of demands by one individual against another, and not
of an individual against the state.
The present cases differ
toto coelo from any of these.
They are attempts to coerce a state by judicial proceedings; as
before stated, they are that and nothing else. It is useless to
attempt to deceive ourselves by an adroit use of words or by a
train of metaphysical reasoning. We cannot in that way change the
nature of things.
This is the first time, we believe, since the Eleventh Amendment
was adopted in which a state has been coerced by judicial
proceedings at the suit of individuals in the federal courts. That
this is such a case seems one of the plainest proposition that can
be stated.
As the observations already made apply equally to actions
against the officers of the state brought to recover damages or to
recover property taken for taxes as to bills for injunction and
applications for mandamus, only a few words are necessary to be
added in reference to the suit of
Poindexter v. Greenhow,
in which the first opinion was read, and to the trespass cases
similarly situated. Those are actions brought not by citizens of
another state, but by citizens of Virginia herself, in her own
courts, and the highest court of Virginia has adjudged them to be
untenable. Our jurisdiction is invoked to reverse this decision and
to sustain the actions.
The Eleventh Amendment, it is true, does not prohibit the
extension of the judicial power of the United States to suits
prosecuted against a state by its own citizens. But the evident
reason of this is that the judicial power was not granted to the
United States by the original Constitution in such cases; hence, as
it was not granted, it was not deemed necessary to prohibit it. It
was evidently supposed that the control of all litigation against a
state by its own citizens was in its own power, among that mass of
rights which was reserved to the states and the people. It would be
very strange to say that although a state cannot, in any case, be
sued by a citizen of another state since the adoption of the
Eleventh Amendment, yet in a case arising under the Constitution
and laws of the
Page 114 U. S. 338
United States, it may be sued by its own citizens. This would be
to deprive the state, with regard to its own citizens, of its
sovereign right of exemption from suit.
It seems to us that the absurdity of this proposition is its
sufficient answer. Unless the state chooses to allow itself to be
sued, it cannot be sued. It has this prerogative if no other. It is
admitted in point of form that it cannot be sued by the citizens of
other states, or of foreign states, because of the Eleventh
Amendment. The whole argument of the opinions of the majority of
the Court is directed to the object of showing that the state is
not sued in the suits under consideration. We do not remember that
it is anywhere contended that the state can be sued by its own
citizens, against its own law, merely because the Eleventh
Amendment does not in terms extend to that case.
In our judgment, none of these suits can be maintained, for the
reason that they are, in substance and effect, suits against the
State of Virginia.
We have not thought it necessary or proper to make any remarks
on the moral aspects of the case. If Virginia or any other state
has the prerogative of exemption from judicial prosecution, and of
determining her own public policy with regard to the mode of
redeeming her obligations, it is not for this Court, when
considering the question of her constitutional rights, to pass any
judgment upon the propriety of her conduct on the one side or on
the other.