Source: https://caselaw.findlaw.com/us-supreme-court/148/529.html
Timestamp: 2019-04-21 01:14:30+00:00

Document:
D. H. Reynolds, for plaintiff in error.
'United States of America, State of Arkansas.
'It is hereby certified that the county of Chicot is indebted unto and will pay the Mississippi, Ouachita and Red River Railroad Company or bearer, on the first day of January, 1887, five hundred dollars, lawful money of the United States of America, with interest at the rate of six per centum per annum, payable semiannually, on the first day of January and July of each year, at the Union Trust Company, in the city of New York, on the presentation and surrender of the proper coupon hereto annexed. This bond is one of a series of two hundred, numbered from one to two hundred, inclusively, of like date, tenor, and amount, issued under an act of the general assembly of the state of Arkansas, entitled 'An act to authorize counties to subscribe stock in railroads,' approved July 23, 1868, and in obedience to the vote of the people of said county at an election held in accordance with the provisions of said act, authorizing the subscription of one thousand dollars to the capital stock of said railroad company.
'M. W. Graves, County Clerk.
'Receivable in payment of all county taxes.
'State of Arkansas: The treasurer of the county of Chicot will pay fifteen dollars to bearer at the office of the Union Trust Company, in the city of New York, on the first day of January, 1887, being amount of interest on bond No. 3.
'M. W. Graves, County Clerk.' [148 U.S. 529, 531] Judgment was rendered in favor of the plaintiffs for the amount of the bonds and coupons sued on, and the county prosecutes this writ of error therefrom, assigning as grounds of reversal-First, that the circuit court had no jurisdiction to entertain the suit; and, secondly, that said court erred in sustaining the plaintiffs' demurrer to the plea or answer of the county, and in rendering judgment against it, upon its delining to make further answer in bar or defence of the action.
If, therefore, the presentation of a demand to the county court under the Arkansas statute is not the commencement of a suit against the county, then, under the rule stated in Delaware County Com'rs v. Diebold Safe & Lock Co., just quoted, the court to which such demand may be carried after allowance or rejection receives and determines it as an original cause. In either case the suit is so maintainable in the state courts as to be cognizable by original process in a federal court, where the parties have the proper citizenship to confer jurisdiction. Any other [148 U.S. 529, 534] view of the subject would prevent citizens of other states from resorting to the federal courts for the enforcement of their claims against counties of the state, and limit them to the special mode of relief prescribed by the act of February 27, 1879. The jurisdiction of the federal courts is not to be defeated by such state legislation as this. In Hyde v. Stone, 20 How. 170, 175, it is said: 'But this court has repeatedly decided that the jurisdiction of the courts of the United States over controversies between citizens of different states cannot be impaired by the laws of the states, which prescribe the modes of redress in their courts, or which regulate the distribution of their judicial power. In many cases state laws form a rule of decision for the courts of the United States, and the forms of proceeding in these courts have been assimilated to those of the states, either by legislative enactment or by their own rules. But the courts of the United States are bound to proceed to judgment and to afford redress to suitors before them in every case to which their jurisdiction extends. They cannot abdicate their authority or duty in any case in favor of another jurisdiction. Suydam v. Broadnax, 14 Pet. 67; Bank v. Jolly, 18 How. 503.' This principle has been steadily adhered to by this court.
In the case under consideration the state statute relied on to defeat the jurisdiction of the United States circuit court was passed after the bonds sued on were issued and put in circulation, and if its requirement of presenting the bonds to the county court of Chicot county 'for allowance or rejection' was binding upon citizens of other states holding such bonds, as a condition of bringing suit, it would present a very grave question whether it was not such a substantial and material change in the remedy in force when the contract was made as to impair its obligation. But it is not necessary to consider and determine that question, as the objection is merely to the jurisdiction of the circuit court, and, for the reasons already stated, is not well taken.
It is further averred in the answer that the county court was not the proper tribunal to determine whether an election had been held in pursuance of the statute regulating the matter; [148 U.S. 529, 536] that the false recitals on the face of the bonds to the contary did not estop the county; that the terms and conditions of the order submitting the question of subscription to a vote of the people were not complied with so that the county was not legally bound to pay the bonds, or any part thereof; and that the railroad company had delivered the stock to the county court before the election was held, and, after said election, had obtained the bonds illegally and fraudulently, etc. The answer also sets out proceedings had in the county court after the bonds were issued, and reports made to it in relation thereto, which are made exhibits to the answer, and which, it is claimed, show that the bonds were not issued in conformity to law.
To this answer there was interposed a demurrer, which was sustained, and, the county electing to stand on its answer, and say nothing further in bar of the plaintiffs' right to recover, judgment was thereupon rendered in favor of the plaintiffs for the amount of the bonds and coupons sued on, with interest and costs of suit.
It is urged by the plaintiff in error that this action of the lower court was erroneous for the reason that the answer set forth sufficient facts to invalidate the bonds within the rule laid down in Dixon Co. v. Field, 111 U.S. 83, 92 , 93 S., 4 Sup. Ct. Rep. 315. We do not take this view of the answer. It abounds in recitals, in statements of what papers made exhibits thereto show, and in conclusions of law, which are not admitted by the demurrer; the rule being well settled that only matters of fact well pleaded are admitted by a demurrer, while conclusions of law are not. U. S. v. Ames, 99 U.S. 45 ; Interstate Land Co. v. Maxwell Land Grant Co., 139 U.S. 569, 578 , 11 S. Sup. Ct. Rep. 656.
The answer was of such a character as to present no issuable questions of fact going to the merits of the suit, and was properly demurred to, and there was no error in sustaining the demurrer.
Our conclusion is that the judgment should be affirmed.

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