In a case brought here from a circuit court, the opinion
regularly filed below, and which has been annexed to and
transmitted with the record, may be examined in order to ascertain,
in cases like this, whether either party claimed that a state
statute upon which the judgment necessarily depended in whole or in
part was in contravention of tile Constitution of the United
States; but this must not be understood as saying that the opinion
below may be examined in order to ascertain that which, under
proper practice, should be made to appear in a bill of exceptions,
or by an agreed statement of facts, or by the pleadings.
If a claim is made in the circuit court that a state law is
invalid under the Constitution of the United States, this Court may
review the judgment at the instance of the unsuccessful party.
As the bonds in suit in this case were executed by the defendant
township, a corporation, and are payable to bearer, the present
holder, being a citizen of a state different from that of which the
township was a corporation, was entitled to sue upon them, without
reference to the citizenship of any prior holder.
The circuit court erred in holding that the petition in this
case made a case that brought it within the decision in
Norwood
v. Baker, 172 U. S. 269.
Even if the third section of the statute in question be stricken
out, the petition makes a case entitling the plaintiff to a
judgment against the township.
The contention that, independently of any question of federal
law, the statute of Ohio under which the bonds were issued was in
violation of the constitution of that state in that, when requiring
the defendant township to widen and extend the avenue in question,
the legislature exercised administrative, not legislative, powers,
is not supported by tile decisions of the Supreme Court of Ohio
made prior to the issuing of these bonds.
The case is stated in the opinion of the Court.
Page 179 U. S. 473
MR. JUSTICE HARLAN delivered the opinion of the Court.
This action was brought in the court below by Loeb, a citizen of
Indiana, against the trustees of Columbia township in Hamilton
County, Ohio.
The petition was demurred to upon the ground that it did not
state facts sufficient to constitute a cause of action against the
township. After argument, the demurrer was sustained, and, the
plaintiff electing not to plead further, judgment was rendered for
the defendant.
The suit is upon bonds issued by the township for the purpose of
raising money to meet the cost of widening and extending a certain
avenue within its limits.
The questions to be considered relate to the jurisdiction of
this Court, the validity under the Constitution of the United
States of an act of the General Assembly of Ohio in virtue of which
the bonds in suit were issued, and the applicability in this case
of certain decisions of the supreme court of the state rendered
after such bonds were executed and delivered.
The pleadings and orders of court make the following case:
The petition alleged that, on April 27, 1893, the General
Assembly of Ohio passed an act by the first section of which the
trustees of that township were authorized and required to widen and
extend Williams Avenue between certain points named, and to
appropriate and enter upon and hold any real estate within the
township necessary for such purpose;
That, by the second section of the act, the township trustees
were directed to
"immediately make application to the probate court of the county
as provided in § 2236 of the Revised Statutes of Ohio, and
thereafter, as far as practicable, the proceedings shall conform to
and be had under the provisions of §§ 2236 to 2261, inclusive, of
the Revised Statutes of Ohio,"
and
That, by the fourth section, it was provided that
"for the purpose of raising money necessary to meet the expense
of the improvement, the trustees of said township are hereby
authorized and
directed to issue the bonds of the
township, payable in installments or at intervals not exceeding in
all the period of
Page 179 U. S. 474
six years, bearing interest at the rate of six percent per
annum, which bonds shall not be sold for less than their par
value."
90 Ohio Local Laws, 251.
The petition did not set out the third section of the act. But
as it was the duty of the circuit court to take notice of its
provisions, and as it must be referred to in order to dispose of
the questions arising on this record, it is here given in full:
"The trustees shall receive reasonable compensation for their
services, which shall not exceed the sum of twenty-five dollars
each, which, with all costs and expenses of constructing said
improvement, together with the interest on any bonds issued by the
trustees for the same, shall be levied and assessed upon
each
front foot of the lots and lands abutting on each side of said
Williams Avenue between the termini mentioned in section one
hereof, and shall be a lien from the date of the assessment
upon the respective lots or parcels of lands assessed; said
assessment shall be payable in five annual payments, and shall be
paid to the township treasurer, and the option of paying his
portion of such assessment in full within a period of twenty days
from the date of the levy thereof shall be given to each of the
property owners, but no notice to the property owners of such
option shall be necessary. The township treasurer shall, on or
before the second Monday of September, annually, certify all unpaid
assessments to the county auditor, and the same shall be placed on
the tax list, and shall be, with ten percent penalty to cover
interest and cost of collection, collected by the county treasurer
in the same manner as other taxes are collected, and when collected
he shall pay the same to the township treasurer, and all moneys
received by the township treasurer on such assessments shall be
applied to the payment of the bonds issued under this act, and for
no other purpose, and for the purpose of enforcing the collection
of the assessments so certified to him the county treasurer shall
have the same power and authority now allowed by law for the
collection of state and county taxes."
90 Ohio Local Laws 251.
It further appears from the petition that the township trustees
appropriated land for the avenue in the manner provided in the act,
and that, for the purpose of raising the money necessary to
Page 179 U. S. 475
meet the expense of the appropriation the trustees, on or about
September 29, 1894, duly executed and issued, in proper form and in
accordance with the terms and provisions of the act, twenty-five
bonds of Columbia township of $500 each, five payable respectively
in one, two, three, four, and five years each, and one for $432
payable one year from date, all of the above date, and numbered
consecutively from one to twenty-six, inclusive, and all payable to
the order of the bearer at the office of the treasurer of the
county, and bearing interest represented by coupons attached at the
rate of six percent per annum, payable semi-annually, on the 29th
days of March and September of each year; that, on or about the
September, 1894, the bonds were sold by the township to a
bona
fide purchaser and the highest bidder for $13,325 and accrued
interest; that, on or about September 29, 1895, the trustees paid
bonds Nos. 1, 2, 3, 4, and 5, then due, each for $500, and No. 26
for $432, and the interest coupons payable on the date last named
on the entire issue of the twenty-six bonds, and that, on March 29,
1896, the trustees paid the interest coupons, due on that day, on
the twenty bonds remaining unpaid, including bonds numbered 6, 7,
8, 9, and 10.
The petition set out each of the bonds last named, and alleged
that the plaintiff was the
bona fide owner and holder for
value of each of them, and had demanded payment of each in
accordance with its terms, but that payment was refused.
The bonds dated September 29, 1894, were signed by the trustees
and attested by the seal of the township, and were alike in form.
Each recited that it was
"one of a series of twenty-five bonds of $500 each, issued by
virtue of an act of the General Assembly of the State of Ohio,
passed April 27, 1893, authorizing the trustees of Columbia
township to levy an assessment on the real estate abutting on the
Williams Avenue between Duck Creek Road and Madison Pike, and one
bond for $432 for the payment of $12,932, for widening and
extending said avenue;"
and that,
"by virtue of said act, the trustees of Columbia township hereby
acknowledge said township indebted to the bearer in the sum of five
hundred dollars,
Page 179 U. S. 476
which sum they, as trustees, and for their successors in office,
promise to pay to the bearer hereof, upon the surrender of this
bond at the office of the treasurer of said township, on the 29th
day of September, 1896, and also interest thereon at the rate of
six percent per annum, payable semi-annually, on the 29th days of
March and September of each year, during the continuance of this
loan, on presentation to the township treasurer of the respective
coupons hereto attached."
A judgment was asked for the amount of bonds 6 to 10 inclusive,
with the interest thereon.
The record contains in full the opinion rendered and filed by
the court when disposing of the demurrer. 91 F. 37. In that
opinion, it is expressly stated that the following points were made
in argument in support of the demurrer.
1. That the petition did not show that the plaintiff was the
original holder of the bonds sued on, and if he were an assignee or
subsequent holder thereof he was not entitled to maintain the
action, because the bonds were payable to bearer, and were not made
by a corporation.
2. That the act of the General Assembly, under and by virtue of
which the bonds were issued, was in violation of the Constitution
of the state, and therefore the bonds were invalid.
3. That the act contravened the provisions of the Constitution
of the United States, and therefore the bonds were invalid.
It appears from the opinion of the circuit court that the first
and second of these points were ruled in favor of the plaintiff.
But the third point was decided for the defendant, the court being
of opinion that, according to the principles laid down in
Norwood v. Baker, 172 U. S. 269, the
law under which the bonds sued on were issued was repugnant to that
clause of the Fourteenth Amendment of the Constitution of the
United States forbidding a state to deprive any person of property
without due process of law. In disposing of the third point, the
court referred to the propositions made in its support as having
been "claimed" by the township.
I. The first question to be considered is one of the
jurisdiction of this Court to proceed upon writ of error directly
to the circuit court.
Page 179 U. S. 477
By the fifth section of the Circuit Court of Appeals Act,
appeals or writs of error may be prosecuted to this Court from the
circuit courts "in any case in which the Constitution or law of a
state is claimed to be in contravention of the Constitution of the
United States." 26 Stat. 826-828, c. 517.
The petition shows that the parties are citizens of different
states. It states no other ground of federal jurisdiction. If
nothing more appeared bearing upon the question of jurisdiction,
then it would be held that this Court was without authority to
review the judgment of the circuit court.
Is not this Court, however, sufficiently informed by the record
that the defendant township, under its general demurrer, "claimed"
in the circuit court that the statute of Ohio by the authority of
which the bonds were issued was in contravention of the
Constitution of the United States?
It is said that, even if the record shows such a claim to have
been made, it will not avail the plaintiff, for, it is argued, when
the jurisdiction of the circuit court is invoked by the plaintiff
only on the ground of diverse citizenship, a claim by the
defendant of the repugnancy of a state law to the
Constitution of the United States is not sufficient to give this
Court jurisdiction, upon writ of error, to review the final
judgment of the circuit court sustaining such claim. Such an
interpretation of the fifth section is not justified by its words.
Our right of review, by the express words of the statute, extends
to "any case" of the kind specified in the fifth section. And the
statute does not in terms exclude a case in which the federal
question therein was raised by the defendant. That section differs
from section 709 of the Revised Statutes relating to the review by
this Court of the final judgment of the highest court of a state in
this, that, under the latter section we can review the final
judgment of the state court upon writ of error sued out by the
party who is denied a right, privilege, or immunity specially set
up or claimed
by him under the Constitution or laws of the
United States, whereas the circuit court of appeals act does not
declare that the final judgment of a circuit court in a case in
which there was a claim of the repugnancy of a state statute to the
Constitution
Page 179 U. S. 478
of the United States may be reviewed here only upon writ of
error sued out by the party making the claim. In other words, if a
claim is made in the circuit court, no matter by which party, that
a state enactment is invalid under the Constitution of the United
States, and that claim is sustained or rejected, then it is
consistent with the words of the act, and, we think, in harmony
with its object, that this Court review the judgment at the
instance of the unsuccessful party, whether plaintiff or
defendant.
It was the purpose of Congress to give opportunity to an
unsuccessful litigant to come to this Court directly from the
circuit court in every case in which a claim is made that a state
law is in contravention of the Constitution of the United States.
If the circuit court had adjudged in this case that the township's
claim of unconstitutionality was without merit, and had given
judgment for the plaintiff, can it be doubted for a moment that the
township could have brought the case here directly from the circuit
court upon writ of error? But if the township, upon a denial of its
claim, could invoke our jurisdiction, as of right, upon what
principle can the plaintiff be denied the like privilege if the
state law upon which his action depended was, upon his adversary's
claim, stricken down as void under the Constitution of the United
States? Can the case, so far as the township is concerned, be
regarded as belonging to the class which the act of Congress brings
directly within the cognizance of this Court, and yet not be
regarded as a case of that class with respect to the plaintiff? The
answer to these questions has already been indicated.
It is true that the plaintiff might have carried this case to
the circuit court of appeals, and, a final judgment having been
rendered in that court upon his writ of error, he could not
thereafter have invoked the jurisdiction of this Court upon another
writ of error to review the judgment of the circuit court; for, as
said in
Robinson v. Caldwell, 165 U.
S. 359,
165 U. S.
362,
"it was not the purpose of the Judiciary Act of 1891 to give a
party who was defeated in a circuit court of the United States the
right to have the case finally determined upon its merits both in
this Court and in the circuit court of appeals,"
although the latter
Page 179 U. S. 479
court, before disposing of a case which might have been brought
here directly from the circuit court, may certify to this Court
questions or propositions as indicated in the sixth section of the
above act. But the plaintiff was not bound to go to the circuit
court of appeals, and thereby cut himself off from the right to
have this Court declare whether the circuit court erred in holding
that the state law upon which he relied for judgment was repugnant
to the Constitution of the United States.
Cases in this Court are cited which hold that, where the
plaintiff invokes the jurisdiction of the circuit court solely upon
the ground of diverse citizenship, and where the claim of the
invalidity of a state statute under the Constitution of the United
States came from the defendant, or arose after the filing of the
petition or during the progress of the suit, then the judgment of
the circuit court of appeals is final within the meaning of the
sixth section of the act of 1891, 26 Stat. 826, 828, c. 517,
declaring that
"the judgments or decrees of the circuit courts of appeals shall
be final in all cases in which the jurisdiction is dependent
entirely upon the opposite parties to the suit or controversy being
aliens and citizens of the United States or citizens of different
states."
Colorado Central Consolidation Mining Co. v. Turck,
150 U. S. 138;
Borgmeyer v. Idler, 159 U. S. 408,
159 U. S. 414;
Ex Parte Jones, 164 U. S. 691,
164 U. S.
693.
When the question is whether a judgment of the circuit court of
appeals is final in a particular case, it may well be that the
jurisdiction of the circuit court is, within the meaning of that
section, to be regarded as dependent entirely upon the diverse
citizenship of the parties if the plaintiff invoked the authority
of that court only upon that ground, because, in such case, the
jurisdiction of the court needed no support from the averments of
the answer, but attached and became complete upon the allegations
of the petition. But no such test of the jurisdiction of this Court
to review the final judgment of the circuit court is prescribed by
the fifth section. Our jurisdiction depends only on the inquiry
whether that judgment was in a case in which it was claimed that a
state law was repugnant to the Constitution of the United States.
In the present case, the circuit court, upon the claim of one of
the parties,
Page 179 U. S. 480
applied the Constitution to the case, and put the plaintiff out
of court.
Cornell v. Green, 163 U. S.
75. Any other interpretation of the statute is
inconsistent with the equal right of the plaintiff with the
defendant to come here, if unsuccessful, in a case embraced by the
fifth section. Here, the plaintiff could not have raised in his
petition any question of a federal right. He sued on the bonds held
by him, and sought only a judgment for money. His cause of action
was not federal in its nature. He therefore could not have invoked
the jurisdiction of the circuit court upon any ground except that
of diverse citizenship. He could not have added to or enforced
jurisdiction by anticipating the defense and alleging in his
petition that the defendant township would in its answer claim that
the state statute in question was in contravention of the
Constitution of the United States, for that would have been matter
of defense, and the allegation could, on motion, have been properly
stricken from the petition. Nevertheless, the case is one in which
there was a claim that a state law was repugnant to the
Constitution of the United States.
The views expressed by us as to the scope of the act of 1891 are
supported by
Holder v. Aultman, 169 U. S.
81,
169 U. S. 88.
That was an action in the Circuit Court of the United States for
the Eastern District of Michigan upon a written contract relating
to agricultural machines, the plaintiff being a corporation of Ohio
and the defendant a corporation of Michigan. No question of a
federal nature appeared in the plaintiff's petition. The defendant,
however, claimed that a certain statute of Michigan stood in the
way of the plaintiff maintaining its action. This Court said:
"The circuit court, in giving judgment for the plaintiff, held
that the contract was made in the State of Ohio, and that the
statute of Michigan, so far as it applied to the business carried
on by the plaintiff in that state under the contract, was in
conflict with the Constitution of the United States authorizing
Congress to regulate interstate commerce. 68 F. 467. This was
therefore a 'case in which the Constitution or law of a state is
claimed to be in contravention of the Constitution of the United
States,' and was rightly brought directly to this Court by writ of
error under the Act of March 3,
Page 179 U. S. 481
1891, c. 517, § 5, 26 Stat. 828. Upon such a writ of error,
differing in these respects from a writ of error to the highest
court of a state, the jurisdiction of this Court does not depend
upon the question whether the right claimed under the Constitution
of the United States has been upheld or denied in the court below,
and the jurisdiction of this Court is not limited to the
constitutional question, but includes the whole case.
Whitten
v. Tomlinson, 160 U. S. 231,
160 U. S.
238;
Penn Ins. Co. v. Austin, 168 U. S.
685."
This brings us to the inquiry whether it can be assumed from the
present record that a claim was made in the circuit court that the
statute of the state under the authority of which the bonds in suit
were issued was invalid under the Constitution of the United
States. There can be but one answer to this question, if we may
look to the opinion filed by the circuit court when it disposed of
the demurrer. Although the demurrer was general in its nature, it
referred to the petition and its allegations, and thus brought to
the attention of the court the state enactment under which the
bonds were issued, and it was certainly competent for the township
to claim at the hearing of the demurrer that such enactment upon
its face was repugnant to the Constitution of the United States,
and therefore void. Turning to the opinion of the circuit court,
made part of the transcript, we find it expressly stated therein,
not only that such a claim was made by the township on the hearing
of the demurrer, but that the judgment sustaining the demurrer and
dismissing the petition was placed upon the sole ground that the
claim that the state law contravened the Constitution of the United
States was well made.
Is the opinion of the circuit court of no value to us when
considering this case? May we not look to it for the purpose of
ascertaining whether it was claimed that the state law contravened
the Constitution of the United States? It is said that we cannot,
and that view is supposed to be sustained by
England v.
Gebhardt (1884),
112 U. S. 502,
112 U. S.
505-506, which was a writ of error to review a judgment
of a circuit court remanding to the state court a case removed
therefrom under section 5 of the Act of March 3, 1875, c. 137, 18
Stat. 472. In the
Page 179 U. S. 482
petition for removal in that case, it was averred that the
parties to the suit were citizens of different states, and it was
stated generally in the order remanding the case that there was a
finding of the court that they were not. That finding was, of
course, based upon facts brought to the attention of the court in
the proper form. But the facts bearing upon the question of diverse
citizenship did not appear in a bill of exceptions, nor in an
agreed statement of facts, nor in a special finding in the nature
of a special verdict, nor in any other proper or appropriate mode.
It, however, did appear from the record that certain affidavits
copied into the transcript had been filed in the case. This Court
held that the affidavits formed no part of the record, saying:
"The mere fact that a paper is found among the files in a cause
does not, of itself, make it a part of the record. If not a part of
the pleadings or process in the cause, it must be put into the
record by some action of the court.
Sargeant v. State
Bank, 12 How. 371,
53 U. S.
384;
Fisher v. Cockerell, 5 Pet.
248,
30 U. S. 254. This must be
done by a bill of exceptions, or something which is equivalent.
Here, however, that has not been done."
The opinion thus concluded:
"Neither is the opinion of the court a part of the record. Our
Rule 8
*, section 2, requires a copy of
any opinion that is filed in a cause be annexed to and transmitted
with the record, on a writ of error or an appeal to this Court; but
that of itself does not make it a part of the record below."
That language is not to be taken too broadly or without
reference to the particular case then before the court. What was
said may undoubtedly be taken as an adjudication that the opinion
of the court cannot, under our rule, be referred to for the purpose
of ascertaining the evidence or the facts
Page 179 U. S. 483
found below upon which the judgment was based, but not as
precluding this Court from looking into the opinion of the trial
court for any purpose whatever -- as, for instance, for the purpose
of ascertaining whether either party claimed, in proper form, that
a state law upon which some of the issues depended was in
contravention of the Constitution of the United States. The
principal, if not the only, object of requiring the opinion to be
annexed to and transmitted to this Court was that we might be
informed of the grounds upon which the court below proceeded.
Unless the rule had at least that object, why should it have been
adopted?
In
United States v. Taylor, 147 U.
S. 695,
147 U. S. 700,
which came from a circuit court of the United States, this Court
said:
"It was formerly held that, even in writs of error to a state
court, the opinion of the court below was not a part of the record,
Williams
v. Norris, 12 Wheat. 117,
25 U. S.
119;
Rector v. Ashley, 6 Wall.
142;
Gibson v. Chouteau, 8 Wall.
314, but the inconvenience of this rule became so great that it was
subsequently changed,
Murdock v. Memphis, 20 Wall.
590, and, finally, the eighth rule of this Court was so modified,
in 1873, as to require a copy of the opinion to be incorporated in
the transcript."
In
Sayward v. Denny, 158 U. S. 180,
158 U. S. 181,
in which the question was whether it sufficiently appeared from the
record that the state court had denied any federal right of
immunity specially set up or claimed by the party who invoked our
jurisdiction, THE CHIEF JUSTICE observed that certain propositions
must be regarded as settled, one of which was that the arguments of
counsel formed no part of the record, "though the opinions of the
state courts are now made such by rule," citing, among other cases,
United States v. Taylor, above referred to.
The rule of our Court referred to does not apply alone to cases
brought here from the highest court of a state. It applies in terms
to all cases brought to this Court by writ of error or appeal.
What, therefore, was said in the above cases as to the object and
effect of the rule applies to records from a circuit court of the
United States.
Some light is thrown upon this question by the decisions in
cases from the highest courts of the states. In
Murdock
v.
Page 179 U. S. 484
Memphis, 20 Wall. 590,
87 U. S. 633,
it was said that, in determining whether a federal question was
actually raised and decided in the state court,
"this Court has been inclined to restrict its inquiries too much
by this express limitation of the inquiry 'to the face of the
record.' What was the record of a case was pretty well understood
as a common law phrase at the time that statute [act of 1789] was
enacted. But the statutes of the states and new modes of
proceedings in those courts have changed and confused the matter
very much since that time."
After observing that it was in reference to one of the
necessities thus brought about that this Court had long since
determined to consider as part of the record the opinions delivered
in such cases by the Supreme Court of Louisiana, it was said:
"And though we have repeatedly decided that the opinions of
other state courts cannot be looked into to ascertain what was
decided, we see no reason why, since this restriction is removed,
we should not so far examine those opinions, when properly
authenticated, as may be useful in determining that question."
The subject was again considered in
Gross v. United States
Mortgage Co., 108 U. S. 477,
108 U. S. 486,
which came from the Supreme Court of Illinois. After referring to
what was said in
Murdock v. Memphis, this Court said:
"We cannot, therefore, doubt that, in the existing State of the
law, it is our duty to examine the opinion of the Supreme Court of
Illinois, in connection with other portions of the record, for the
purpose of ascertaining whether this writ of error properly raises
any question determined by the state court adversely to a right,
title, or immunity under the Constitution or laws of the United
States, and specially set up and claimed by the party bringing the
writ."
It is true that in that case the court stated that any
difficulty upon the subject was removed by the statutes of Illinois
regulating that subject, but the decision was not placed upon that
ground.
It has long been the practice of this Court in cases coming from
a state court to refer to its opinion made part of the record, for
the purpose of ascertaining whether any federal right specially set
up or claimed had been denied to the plaintiff in error, or whether
the judgment rested upon any ground of
Page 179 U. S. 485
local law sufficient to dispose of the case without reference to
any question of a federal character. And we have done this without
stopping to inquire whether there was any statute of the state
requiring the opinion of the court to be filed in the case as part
of the record.
For the reasons we have given, it must be held that, in a case
brought here from a circuit court, the opinion regularly filed
below, and which has been annexed to and transmitted with the
record, may be examined in order to ascertain, in cases like this,
whether either party claimed that a state statute upon which the
judgment necessarily depended in whole or in part was in
contravention of the Constitution of the United States. By this,
however, we must not be understood as saying that the opinion below
may be examined in order to ascertain that which under proper
practice should be made to appear in a bill of exceptions, or by an
agreed statement of facts, or by the pleadings.
The result is that this Court has jurisdiction to review the
judgment of the circuit court, and to determine every question
properly arising in the case. We may therefore determine whether
the court below erred in sustaining the demurrer to the
petition.
II. One of the questions arising upon the record is whether the
defendant township is a corporation within the meaning of that
clause of the Judiciary Act of August 13, 1888, c. 866, 25 Stat.
433, 434, § 1, which excludes from the cognizance of a circuit or
district court of the United States
"any suit, except upon foreign bills of exchange, to recover the
contents of any promissory note or other chose in action in favor
of any assignee, or of any subsequent holder, if such instrument by
payable to bearer and be not made by any corporation, unless such
suit might have been prosecuted in such court to recover the said
contents if no assignment or transfer had been made."
This question affects the jurisdiction of the circuit court to
take cognizance of this case.
When the act of 1888 was passed, it was the established law that
a municipal corporation created under the laws of a state, with
power to sue and be sued and to incur obligations, was to
Page 179 U. S. 486
be deemed a citizen of that state for purposes of suit by or
against it in the courts of the United States. In
Cowles v.
Mercer County, 7 Wall. 118,
74 U. S. 122, this
Court said:
"It is enough for this case that we find the board of
supervisors [of the county] to be a corporation authorized to
contract for the county. The power to contract with citizens of
other states implies liability to suit by citizens of other states,
and no statute limitation of suability can defeat a jurisdiction
given by the Constitution."
Lincoln County v. Luning, 133 U.
S. 529,
133 U. S. 531;
McCoy v. Washington County, 3 Wall. Jr. 381, 384; Dillon's
Removal of Causes, § 105. We perceive nothing in that act
indicating any purpose of Congress to exclude from the jurisdiction
of the circuit courts of the United States suits by or against
municipal corporations having authority by the laws creating them
to sue or to incur liabilities in their corporate name. It must
therefore be taken that the words "any corporation" in the act of
1888 include municipal as well as private corporations. And it is
the settled law of Ohio that a township is suable on account of any
liabilities incurred by it.
Harding v. Trustees of New Haven
Township, 3 Ohio, 227;
Trustees of Concord Township v.
Miller, 5 Ohio 184;
Wilson v. Trustees of No. 16, 8
Ohio 174. Now, by the statutes of Ohio, the defendant township was
constituted a body politic and corporate for the purpose of
enjoying and exercising the rights and privileges conferred upon it
by law, and was made capable of suing and being sued, pleading and
being impleaded. 1 Bates' Anno.Stat. Ohio § 1376. It was created
for purposes of local administration, and is a corporation.
Fairfield Township v. Ladd, 26 Ohio St. 210, 213;
Lane
v. State, 39 Ohio St. 314. As therefore the bonds in suit were
executed by the defendant township, a corporation, and are payable
to bearer, the present holder, being a citizen of a state different
from that of which the township was a corporation, was entitled to
sue upon them without reference to the citizenship of any prior
holder.
Thompson v. Perrine, 106 U.
S. 589,
106 U. S.
592-593. This point was properly decided for the
plaintiff.
III. Was the statute under which the bonds in suit were issued
in violation of the Constitution of the United States?
Page 179 U. S. 487
The circuit court held that it was, and, the plaintiff having
elected to stand upon his petition, the action was dismissed.
Looking at all the provisions of the statute, that court held
that the case was embraced by
Norwood v. Baker,
172 U. S. 269,
172 U. S. 279,
172 U. S. 297,
and upon the authority of that case held that the bonds were issued
in contravention of the Fourteenth Amendment of the Constitution of
the United States, prohibiting the taking of property without due
process of law.
In
Norwood v. Baker, it was said that
"the exaction from the owner of private property of the cost of
a public improvement in substantial excess of the special benefits
accruing to him is, to the extent of such excess, a taking, under
the guise of taxation, of private property for public use without
compensation,"
and that the assessment involved in that case, made against
abutting property, to pay the cost and expense of opening a street
in a village, was illegal and void because made
"under a rule which excluded any inquiry as to special benefits,
and the necessary operation of which was, to the extent of the
excess of the cost of opening the street in question over any
special benefits accruing to the abutting property therefrom, to
take private property for public use without compensation."
We are of opinion that the circuit court erred in holding that
the petition made a case that necessarily brought it within the
decision in
Norwood v. Baker so far as the relief sought
by the plaintiff was concerned.
We have seen that the first section of the act of 1893
authorized and required the improvement to be made, and directed
the township to appropriate, enter upon, and hold any real estate
necessary for such purpose; that the second section directed that
proceedings for condemnation be immediately taken in the probate
court under specified sections of the Revised Statutes of Ohio;
that the third section prescribed how the assessment to meet the
cost of improvement shall be made namely "upon each front foot of
the lots and lands abutting on each side of said Williams Avenue
between the termini mentioned;" and that a separate section, the
fourth, directed bonds to be issued "for the purpose of raising
money necessary to meet the expense of the improvement."
Page 179 U. S. 488
The second section of the act directed the trustees of the
township to make immediate application to the probate court of the
county, as provided in section 2236 of the Revised Statutes of
Ohio, and declared that the proceedings thereafter, as far as
practicable, should conform to the provisions of sections 2236 to
2261, inclusive. Those sections do not relate to modes of
assessment, but only to the steps to be taken by a municipal
corporation when it appropriates private property for public
purposes. From other sections of those statutes, it appears that,
when the municipal corporation appropriates or otherwise acquires
lots or lands for the purpose of laying off, opening, extending,
straightening, or widening a street, alley, or other public
highway, or is possessed of property which it desires to improve
for street purposes, the council may decline to assess the cost and
expenses of such appropriation, or acquisition, and of the
improvement, upon the general tax list in which case the same
"shall be assessed upon all the taxable real and personal property
in the corporation." § 2263. But by section 2264 it is provided
that, in all cases where an improvement of any kind is made of an
existing street, alley, or other public highway, and the council
declines to assess the costs and expenses or any part thereof on
the general tax list, the amount not so assessed shall be assessed
by the council on the abutting and such adjacent and contiguous or
other benefited lots and lands in the corporation, either in
proportion to the benefits which may result from the improvements,
or according to the value of the property assessed, or by the front
foot of the property bounding and abutting upon the improvement, as
the council by ordinance, "setting forth specifically the lots and
lands to be assessed, may determine before the improvement is
made," the assessments to be payable in one or more installments
and at such times as the council might prescribe.
Now let it be supposed that the third section of the special act
in question prescribed a rule by which all inquiry is precluded in
respect of special benefits accruing to the adjoining property
owners, and that an assessment under that section would be invalid
under the decision in
Norwood v. Baker, as taking private
property for public use without just compensation --
Page 179 U. S. 489
upon which question we express no opinion -- would it follow
that the township would escape liability on the bonds? We think
not. The fourth section of the act, authorizing and
directing bonds to be issued for the purpose of raising
the money necessary to meet the expenses of the improvement in
question, may stand with sections one and two, even if section
three were held to be void as prescribing an illegal mode of
assessment. The power to issue bonds to raise the money, and the
mode in which the township should raise the necessary sums to pay
the bonds when due, as well as the interest accruing thereon from
time to time, are distinct and separable matters.
If the act under which the bonds were issued had not contained
any provision whatever for an assessment to raise money to meet
them, the township could not have repudiated its obligation to pay
the bonds, for in the act would be found the command of the
legislature to widen and extend Williams Avenue, to immediately
secure by proceedings in the probate court the land required for
the proposed work, to issue bonds to raise the money necessary to
meet the expenses of the improvement. We ought not to hold the
statute invalid if it failed to provide some legal mode of
assessment to raise money to pay the bonds when they matured, with
the interest accruing thereon. The statute, so far as the question
of the power to issue bonds and put them on the market is
concerned, may be carried into effect without reference to the
third section. So that, if that section were held void under
Norwood v. Baker, the remaining sections, being valid, can
stand and their provisions be executed.
There is some ground for saying that the legislature would not
have passed the act without the third section, and that was the
view expressed by the learned judge who tried the case below. But
we do not think that such is so manifestly the case as to justify
the courts in refusing to execute the valid parts of the statute
when that can be done in harmony with the intention of the
legislature to have the improvement in question made by the
township and its cost met by issuing bonds. We think the case comes
within
Fayette County Treasurer v. People's & Drovers'
Bank, 47 Ohio St. 503, 523, in which the court said:
"The question
Page 179 U. S. 490
arises, however, whether, if that portion of the section is
declared wholly or in part unconstitutional and void, it may not
result in invalidating the entire section. As one section of a
statute may be repugnant to the Constitution without rendering the
whole act void, so one provision of a section may be invalid by
reason of its not conforming to the Constitution while all the
other provisions may be subject to no constitutional infirmity. One
part may stand while another will fall, unless the two are so
connected or dependent on each other in subject matter, meaning, or
purpose that the good cannot remain without the bad. The point is
not whether the parts are contained in the same section, for the
distribution into sections is purely artificial, but whether they
are essentially and inseparably connected in substance -- whether
the provisions are so interdependent that one cannot operate
without the other."
The relief asked, and the only relief that could be granted in
the present action, is a judgment for money. If the township should
refuse to satisfy a judgment rendered against it, and if
appropriate proceedings are then instituted to compel it to make an
assessment to raise money sufficient to pay the bonds, the question
will then arise whether the mode prescribed by the third section of
the act of 1893 can be legally pursued, and if not, whether the
laws of the state do not authorize the adoption of some other mode
by which the defendant can be compelled to meet the obligations it
assumed under the authority of the legislature of the state. All
that we now decide is that even if the third section of the state
statute in question be stricken out as invalid, the petition makes
a case entitling the plaintiff to a judgment against the township.
Whether a judgment if rendered could be collected without further
legislation depends upon considerations that need not now be
examined.
IV. But it is contended that, independently of any question of
federal law, the statute of Ohio under which the bonds were issued
was in violation of the Constitution of that state in that, when
requiring the defendant township to widen and extend the avenue in
question, the legislature exercised administrative, not
legislative, powers. This contention is not supported by the
Page 179 U. S. 491
decisions of the Supreme Court of Ohio made prior to the issuing
of these bonds. Those decisions were to the contrary.
In
Hibbs v. Commissioners, 35 Ohio St. 458, 467,
decided in 1880, the question was directly presented as to the
validity under the Constitution of Ohio of a statute authorizing
and directing a particular county to levy a special tax, not to
exceed a given amount, for the purpose of building, grading, and
gravelling or macadamizing a named public highway. On behalf of the
county it was insisted that the legislature could not
constitutionally compel it or the people to make an improvement of
merely a local character, for the reason that the local authorities
were made by the constitution the sole judges of the necessity of
such an improvement. The supreme court of the state said:
"The power of the legislature to pass a mandatory statute
requiring the commissioners to levy the tax and improve the road in
question is denied by the defendant. The only provision which the
constitution contains with respect to the county commissioners is
the following: 'The commissioners of counties, the trustees of
townships, and similar boards shall have power of local taxation as
may be prescribed by law.' Art. 10, section 7. Manifestly this is
no limitation on the power of the General Assembly, and the inquiry
therefore is as to the extent of such power. That it is only
legislative is conceded, but that is undeniably a very broad power,
and includes, generally the right to direct,
in invitum,
the construction and repair of public highways and the levy of
taxes to defray the necessary expenses thereof. That the power is
liable to great abuse is denied by no one, but the responsibility,
as well as the power, rests with the legislature."
But in
State v. Commissioners, 54 Ohio St. 333, and
Hixson v. Burson, 54 Ohio St. 470, decided in 1896, the
principle announced in
Hibbs v. Commissioners was declared
to be unsound. In the first case, the Supreme Court of Ohio held to
be invalid an act of the legislature which, without the petition of
anyone interested, authorized certain local improvements to be made
with the consent of the county commissioners, but which was so
framed as to require the commissioners to proceed in the way and to
the extent mapped out by the legislature. The court
Page 179 U. S. 492
said that the act was
"an assumption of powers over the affairs of a county not
possessed by the General Assembly -- it is administrative in
character, and not legislative. . . . It is simply a usurpation of
the powers heretofore always allowed to the proper administrative
boards selected by the people of the localities concerned, in the
exercise of the right of local self-government."
In the latter case, the court expressly overruled the second
syllabus in
Hibbs v. Commissioners (which, under the
statutes of Ohio, is to be regarded as presenting the point
adjudged), stating that
"an act providing for the improvement of a designated county
road is local in its nature, and not in conflict with art. 2,
section 26, of the constitution, which provides that 'all laws of a
general nature shall have a uniform operation throughout the
state.'"
What, under these circumstances, was the duty of the circuit
court? That court, speaking by Judge Thompson, held that its duty
was to enforce the provisions of the Constitution of Ohio as
interpreted by the Supreme Court of that state at the time the
bonds were issued, and not permit the contrary decisions, made
after the bonds were issued, to have a retroactive effect. This was
in accordance with the long established doctrine of this Court to
the effect that the question, arising in a suit in a federal court,
of the power of a municipal corporation to make negotiable
securities, is to be determined by the law as judicially declared
by the highest court of the state when the securities were issued,
and that the rights and obligations of parties accruing under such
a state of the law would not be affected by a different course of
judicial decisions subsequently rendered, any more than by
subsequent legislation. Our decisions to that effect are so
numerous that any further discussion of the question is
unnecessary, and we need only cite some of the adjudged cases.
Rowan v.
Runnels, 5 How. 134;
Ohio Life
Ins. and Trust Co. v. Debolt, 16 How. 416,
57 U. S. 432;
Supervisors,
16 Wall. 678;
Douglass v. Pike County, 101 U.
S. 677;
Taylor v. Ypsilanti, 105 U. S.
60,
105 U. S. 71;
Ralls County v. Douglass, 105 U.
S. 728;
Green County v. Conness, 109 U.
S. 104,
109 U. S. 105;
Anderson v. Santa Anna, 116 U. S. 356,
116 U. S.
361-362;
Page 179 U. S. 493
German Savings Bank v. Franklin County, 128 U.
S. 526,
128 U. S. 539;
Wade v. Travis County, 174 U. S. 499,
174 U. S. 510.
It should be here said that the doctrine of prior cases was not
in any wise changed or impaired by the decision in
Central Land
Company v. Laidley, 159 U. S. 103,
159 U. S. 111,
in which it was held that, under the statute giving this Court
authority to review the judgment of the highest court of the state,
we were without jurisdiction if the action of that court was
impeached simply on the ground that it had not determined the
rights of the plaintiff in error in accordance with its decisions
in force when those rights accrued, but had followed its decisions
of a contrary character rendered after his rights had accrued. This
Court held that a mere change of decision in the state court did
not present a question of federal right under that clause of the
Constitution of the United States prohibiting a state from passing
any law impairing the obligation of contracts, that the question of
such impairment did not arise unless the judgment complained of
gave effect to some provision of the state constitution, or some
enactment claimed by the defeated party to impair the obligation of
the particular contract in question. As, however, the circuit
courts of the United States are courts of
"an independent jurisdiction in the administration of state laws
coordinate with, and not subordinate to, that of the state courts,
and are bound to exercise their own judgment as to the meaning and
effect of those laws,"
Burgess v. Seligman, 107 U. S. 20,
107 U. S. 33-34;
Folsom v. Ninety-six, 159 U. S. 611,
159 U. S.
624-625, they may, in suits within their jurisdiction,
properly hold, as in numerous cases this Court has held, that the
rights of parties arising under contracts not involving questions
of a federal nature are to be determined in accordance with the
settled principles of local law as maintained by the highest court
of the state at the time such rights accrued. The statutory
provision that the laws of the several states, except where the
Constitution, treaties, or statutes of the United States otherwise
require or provide, shall be regarded as rules of decision in
trials at common law, in courts of the United States, in cases
where they apply, Rev.Stat. § 721, has not been construed as
absolutely requiring conformity, in such cases, to decisions of
the
Page 179 U. S. 494
state courts rendered after the rights of parties have accrued
under the previous decisions of those courts of a contrary
character.
It results that the circuit court did not err in overruling the
point raised under the demurrer at the hearing below, to the effect
that the state enactment was invalid under the Constitution of the
state.
The judgment is reversed, and the cause remanded with directions
for further proceedings consistent with law and this opinion.
Reversed.
*
"
WRIT OF ERROR, RETURN AND RECORD"
"1. The clerk of the court to which any writ of error may be
directed shall make return of the same, by transmitting a true copy
of the record, and of the assignment of errors, and of all
proceedings in the case, under his hand and the seal of the
court."
"2. In all cases brought to this Court, by writ of error or
appeal, to review any judgment or decree, the clerk of the court by
which such judgment or decree was rendered shall annex to and
transmit with the record a copy of the opinion or opinions filed in
the case."