Source: https://www.law.cornell.edu/supremecourt/text/127/216
Timestamp: 2019-04-26 14:22:28+00:00

Document:
DE SAUSSURE v. GAILLARD, TREASURER.
The answer of the defendant sets forth the history of the legislation of the state of South Carolina on the subject subsequent to the passage of the act of December 22, 1873, known as the 'Consolidation Act,' as follows: 'Defendant, further answering, alleges that subsequent to the passage of said act the general assembly of the said state, by a 'joint resolution to raise a commission to investigate the indebtedness of the state,' approved June 8, 1877, provided a commission to make a complete and thorough investigation of the entire amount of consolidated bonds and certificates of stock which had been issued under the 'consolidation act' aforesaid, and of the bonds, coupons, and certificates of stock which had been surrendered to the state treasurer in exchange for the consolidated bonds and certificates of stock issued under said act, and to report to the general assembly any illegality or non-conformity to law in the issue of consolidated bonds and certificates of stock, and the grounds of the same, which commission is known as the 'Bond Commission;' that the said commission made a report to the general assembly of the result of the investigation made by them under the joint resolution aforesaid, with schedules annexed showing the different classes of bonds and certificates of stock which had been surrendered in exchange for consolidated bonds and certificates of stock; Schedule 6 showing the consolidated bonds and certificates of stock which, in the judgment of the said commission, were not issued in accordance with law, and were not authorized to be consolidated under the 'Consolidation Act.' And thereupon the general assembly, by a 'joint resolution, providing a mode of ascertaining the debt of the state, and of liquidating the same,' approved March 22, 1878, created a special court, known as the 'Court of Claims,' to hear and determine any case or cases made up or brought to test the validity of any of the consolidated bonds or certificates of stock, or of any of the various classes of bonds or certificates of stock, mentioned in the said report of the 'bond commission' as not issued in accordance with law. It was further provided by the joint resolution aforesaid that there should be the same right of appeal from the said 'court of claims' to the supreme court of South Carolina as from the circuit courts of the said state, and with a right of appeal, by writ of error or otherwise, as provided by law to the supreme court of the United States. That said special court shoul have the same right to enter judgment, issue execution, punish for contempt, and enforce its mandates as was then possessed by the circuit courts of the state of South Carolina.
That the state should be represented in said special court by the attorney general and two associate counsel to be selected by the joint vote of the general assembly. That the attorney general and his associates, with the consent of the creditors of the state, or so many of them as shall be necessary, might make up a case or cases to be heard and determined in said court, in which, if practicable, the state should be the defendant, to test the validity of the said consolidated bonds, coupons, and certificates of stock mentioned in Schedule 6 of the report of the 'bond commission,' bringing before the court the various classes of vouchers which it is stated in the said report impair the validity of the said consolidated bonds, coupons, or certificates of stock, or any of them. The said joint resolution further provided for the levy for the current year of a tax sufficient to pay the coupons and interest orders maturing on the outstanding consolidated bonds and certificates of stock during the said fiscal year, the interest on the consolidated bonds and certificates of stock mentioned in Schedule 5 of the report of the 'bond commission' as subject to no valid objection to be paid, and the payment of the interest on the several classes of consolidated bonds and certificates of stock mentioned in Schedule 6 of said report, whenever there should be a final adjudication as to the validity of the several classes of bonds and stocks in the manner therein provided, and none other. That in pursuance of the provision of the said joint resolution actions in which the state of South Carolina was the defendant, were, with the consent of the attorney general and his associates, brought in the said 'court of claims' on coupons of the bonds of the various classes mentioned in Schedule 6 of the report of the 'bond commission.' That after trial and hearing of the said causes the said 'court of claims' rendered judgment in favor of the state. From the judgments of the 'court of claims,' in these several cases, appeals were taken to the supreme court of the state of South Carolina, as privided in the joint resolution establishing the said 'court of claims.' That upon the hearing of the said appeals the supreme court of the state of South Carolina, at the April term, 1879, in the cases entitled 'G. M. Walker, Cashier, Appellant, v. The State of South Carolina, Respondent,' and 'F. J. Pelzer, Appellant, v. The State of South Carolina, Respondent,' decreed and adjudgedFirst. That all the bonds issued under the 'consolidation act' are valid obligations of the state of South Carolina, except as follows: (1) Such as were issued in exchange for bonds issued under the act entitled 'An act to authorize a loan for the relief of the treasury,' approved February 17, 1869, or for the coupons of such bonds; the said act being repugnant to section 7, article 9, of the constitution of the state of South Carolina, in that it purports to create a debt which was not 'for the purpose of defraying extraordinary expenditues,' and the debt sought to be created not being 'for some single object,' and such object not being 'distinctly specified therein,' as required by the said section and article of the constitution. (2) Such as were issued in exchange for the second issue of bonds under an act entitled 'An act to authorize a state loan to pay interest on the public debt,' and which were indorsed, 'Issued under act approved August 26, 1868,' or the coupons of such bonds, the said bonds and coupons being absolutely void, even in the hands of bona fide holders, because issdued without any authority whatever. (3) Such as were issued in exchange for those conversion bonds which were issued in exchange for either of the bonds or coupons of the two classes mentioned. Second. That if any consolidated bond rests wholly upon any of the three objc tionable classes of bonds therein mentioned, then it is wholly void; but if it rests only in part upon such objectionable bonds and coupons, then it is void only to the extent which it does rest upon such objectionable bonds or coupons, and for the balance it is a valid obligation of the state. Third. That the burden of proof is upon the state to shown that any particular bond which may be brought into question does rest either in whole or in part upon such objectionable bonds and coupons, and if in part only, then the state must show what part is so affected. III. Defendant further alleges that by an act entitled 'An act to provide for the settlement of the consolidated debt of the state in accordance with the decision of the supreme court of the state of South Carolina,' approved December 23, 1879, after reciting the legislation and the decision of the supreme court of the state of South Carolina in relation to the consolidated debt of the state hereinbefore set forth, and that it is to the interest of the state and her creditors that the principles established in the said decision of the supreme court should be accepted as final, and forthwith applied in the elimination from the consolidated debt of the state of all invalid material, a special commissioner was appointed to ascertain and establish the exact percentage and amount of the invalidity of each and every consolidated bond and certificate of stock of the state consolidated debt, and of the interest thereon, in accordance with the principles laid down in the said decision of the supreme court of the state. And it was therein further provided that the said special commissioner should at least once in each month during the period of said ascertainment make a detailed report to the state treasurer, setting forth therein by their numbers the consolidated bonds, coupons, certificates of stock, and interest orders investigated by him during the previous monty; also whether the same, under the decision of the supreme court aforesaid, be wholly valid or only partially valid, and where only partially valid in each case he should also set forth the exact percentage, amount, and character of the invalidity; that he should continue to make such detailed reports to the state treasurer until he should have investigated and reported upon the entire consolidated debt of the state. It was further therein provided that every holder of any consolidated bond or certificate of stock, or of the interest thereon, reported by said special commissioner as partially invalid, shall have the right to surrender to the state treasurer for cancellation such bonds, certificates of stock, and interest; and upon such surrender and cancellation he shall be entitled to receive from the state treasurer, who is authorized and required to issue the same, a new bond or certificate of stock equal in amount to the exact amount of the valid portion of such bond, certificate of stock, coupon, or interest order; such new bonds and certificates of stock to be in all respects similar and of like validity to, and having the same benefits and privileges as, those provided for in the 'consolidation act, approved 22d December, 1873, saving and except that the first coupon or interest to mature thereon shall mature on the 1st of January, 1879, and the same rights and privileges are likewise given to the holders of detached coupons and interest orders. And it was further thereby declared 'that the bonds and stocks reported by the special commissioner as valid, and the portions of the bonds and stocks also reported by him as valid, but exchanged by their holders, as hereinbefore provided, for new consolidated bonds or stocks, are hereby declared to be valid and unquestioned obligations of the state.' (And the bonds and stocks so declared to be unquestionable obligations of the state are designated and known as 'brown consols.') That the special commissioner appointed under the act aforesaid did perform the duties required of him by said act, and did make to the state treasurer from tie to time the report of his investigations until he had investigated and reported upon the entire consolidated debt of the state, as required by the said act, which reports of the said special commissioner remain in the office of the state treasurer. That by an act entitled 'An act to extend the time for funding the unquestionable debt of the state,' approved December 24, 1880, the comptroller general of the state is required to examine into the character and material of all consolidated bonds and certificates of stock of the state issued since the 1st day of January, 1866, together with the coupons and interest orders thereon, which may be presented to him for this purpose by the holders thereof, and to report to the state treasurer how the said bonds, certificates of stock, coupons, and interest orders are affected by the decision of the supreme court of the state hereinbefore stated, and the exact percentage of invalidity in the material reported upon as established by the said decision. And the state treasurer is authorized and required, in lieu of the bonds, stocks, coupons, and interest orders so surrendered, to issue consolidated bonds and certificates of stock for fifty per cent. of the face value of valid material surrendered. That the state has since provided for the levy of an annual tax upon the taxable property of the state, and for the payment by the state treasurer, from the proceeds of said tax, of the interest on the entire consolidated debt of the state, ascertained and reported by the special commissioner aforesaid to be valid, in accordance with the decision of the supreme court aforesaid, and also upon such portions of the same as shall have been ascertained and reported by said special commissioner to be valid and justly due by the state, as the same shall appear from the certificates of the said special commissioner filed in the office of the state treasurer. That by joint resolution approved 9th February, 1882, it was resolved as follows: 'Whereas, the consol bonds bear upon their face the contract of the state to receive the coupons of the same for taxes; and whereas, from the fact that the green consols outstanding are more or less tainted with invalidity, varying with each security, (which has been established by the courts and acquiesced in by the holder,) the coupons from this class of bonds cannot be received by the tax collector, but can only be paid at the state treasury, where access to the registry permits the amount of invalidity in each coupon to be ascertained: Now, therefore, in order to hasten the process now going on of the conversion of green consols into brown consols, which latter represent the unquestioned consol debt of the state, and the coupons from which are now being received in payment for taxes: Be it resolved, that on and after the 1st day of January, 1883, the interest upon the green consol bonds and stocks of the state shall not be paid at the treasury until said securities have been converted into brown consol bonds and stocks."
The answer then proceeds to set forth the particulars in which it is claimed that the consolidated bonds described in the complaint are not valid obligations of the state of South Carolina, and further alleges 'that the holders of the bonds Nos. 850, 851, and 2,290, mentioned in the complaint, did not bring the same before the special 'court of claims,' and that they have never surrendered the same to the commissioner, or the comptroller general, or the state treasurer, to asscertain and establish the exact percentage and amount of the invalidity of the said bonds in accordance with the principles laid down in the decision of the supreme court of the state of South Carolina aforesaid, as provided by law, and have never received new consolidated bonds or certificates of stock equal in amount to the valid portions of said bonds, as provided by law, known as 'brown consols." The answer further alleges that the act entitled 'An act to raise supplies and make appropriations for the fiscal year commencing November 1, 18 1,' approved February 9, 1882, 'provides that all taxes assessed and payable under the said act shall be paid in the following kinds of funds, and no other: Gold and silver coin, United States currency, national bank notes, and coupons which shall become payable during the year 1882 on the valid consolidated bonds of the state knowen as 'brown consols:' provided, however, the jury certificates and the per diem of state witnesses in the circuit courts shall be received for county taxes, not including school taxes;' and the defendant admits and justifies under the terms of said act his refusal, as county treasurer of Charleston county, to receive the coupons tendered by the plaintiff in payment of taxes. The cause came on for trial before a jury, who, under the instructions of the court to that effect, found a verdict for the defendant, on which judgment was accordingly rendered. On appeal to the supreme court of the state this judgment was affirmed. To review that judgment the present writ of error has been sued out.
Saml. Lord, C. A. Seward, and T. M. Mordecai, for plaintiff in error.
J. P. H. Earle, Atty. Gen., for defendant in error.
After having thus decided that the present action was not maintainable under the provisions of the act of December 24, 1878, the supreme court of South Carolina proceeds to review the grounds of its prior decisions in the Bond Debt Cases, 12 S. C. 263, 294, and restates and reaffirms the same, going at large into the question of the validity of the bonds held by the plaintiff as obligations of the state, adjudging them to be invalid. The conclusion follows and is declared that the act of the general assembly entitled 'An act to raise supplies and make appropriations for the fiscal year commencing November 1, 1881,' approved February 9, 1882, alleged by the plaintiff to be void as impairing the obligation of the state contained in the bonds and coupons, is a valid and constitutional law, and justified the defendant, as county treasurer, in refusing to receive the coupons in payment of taxes when tendered.
It thus appears that in point of fact the supreme court of the state of South Carolina, in its opinion in this case, pased upon the federal question sought to be raised by the plaintiff as the foundation of his case, and decided it adversely to him; but the analysis of the case which we have made shows clearly that the decision of that question was not necessary to the judgment. Before reaching that question, the supreme court had already decided that the action of the plaintiff could not be sustained, according to the meaning of the provisions of the statute under which it was brought. The decision of that point was final, and was fatal to the plaintiff's right of recovery. That question is not a federal question; it does nt arise under the constitution of the United States, or of any law or treaty made in pursuance thereof. It is not a question, therefore, which, under this writ of error, we have a right to review. We are not authorized to inquire into the grounds and reasons upon which the supreme court proceeded in its construction of that statute. It is a state statute conferring certain rights upon suitors choosing to avail themselves of its provisions upon certain conditions in certain cases. Who may sue under it, and when, and under what circumstances, are questions for the exclusive determination of the state tribunals, whose judgment thereon it not subject to review by this court. It was competent for the state of South Carolina either to grant or withhold the right to bring suits against the officers of the state for the recovery of money alleged to have been illegally exacted and wrongfully paid. If granted, the action is in substance, though not in name, an action against the state itself, just as an action permitted by the acts of congress on the subject against a collector of customs, for the recovery of duties alleged to have been illegally exacted and paid under protest is an action against the United States, though nominally against the collector. In such cases as the state may withhold all remedy, it may attach to the remedy it actually gives whatever conditions and limitations it chooses; and its own interpretation and application of its statutes on that subject, given by its own judicial tribunals, are conclusive upon the parties seeking the benefit of them. No right secured by the constitution of the United States to any citizen is affected by them unless they are framed or administered so as, in some particular case, to deprive the party of his property without due process of law, or to deprive him of the equal protection of the laws. No such question is or can be made in reference to the statute of South Carolina under consideration. It authorizes, in certain enumerated cases, parties found to be within its terms to bring a prescribed action against the state in the neme of one of its officers. According to the decision of its highest tribunal, the plaintiff in this action is not within the class entitled to sue. To review that judgment is not within the province of this court, because it does not deny or injuriously affect any right claimed by the plaintiff under the constitution or laws of the United States.
It is a well-settled rule, limiting the jurisdiction of this court in such cases, that 'where it appears by the record that the judgment of the state court might have been based either upon a law which would raise a question of repugnancy to the constitution, laws, or treaties of the United States, or upon some other independent ground, and it appears that the court did, in fact, base its judgment on such independent ground, and not on the law raising the federal question, this court will not take jurisdiction of the case, even though it might think the position of the state court an unsound one.' Kinger v. Missouri, 13 Wall. 257, 263, per Mr. Justice BRADLEY. And it has been repeatedly decided, under section 709 of the Revised Statutes, that to give this court jurisdiction of a writ of error to a state court, it must appear affirmatively, not only that a federal question was presented for decision to the highest court of the state having jurisdiction, but that its decision was necessary to the determination of the cause, and that it was actually decided, or that the judgment as rendered could not have been given without deciding it. Brown v. Atwell, 92 U. S. 327; Bank v. Board, 98 U. S. 140; Chouteau v. Gibson, 111 U. S. 200, 4 Sup. Ct. Rep. 340; Adams Co. v. Railroad Co., 112 U. S. 123, 5 Sup. Ct. Rep. 77; Railway Co. v. Guthard, 114 U. S. 133, 5 Sup. Ct. Rep. 811; Water-Works Co. v. Refining Co., 125 U. S. , ante, 741.
Inasmuch, therefore, as the judgment of the supreme court of the state of South Carolina, sought to be brought in review by this writ of error, does not involve any question necessarily arising under the constitution of the United States, or the laws and treaties made in pursuance thereof, we must refuse to take jurisdiction in the case. The writ of error is accordingly dismissed for want of jurisdiction.
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