Delmar Jockey Club v. Missouri/Opinion of the Court

Soon after the filing of the record in this court, the attorney general of Missouri submitted a motion to dismiss the writ of error, or to affirm, and the determination of the motion was postponed until the hearing on the merits. The cause having been argued, the motion to dismiss or affirm must now be disposed of.

We are of oinion that the record does not present any Federal question, and that the motion to dismiss must be granted.

The supreme court of Missouri, in the opinion delivered by it on the rehearing, considered three propositions: First, the effect of the general denial, contained in the first paragraph, and the plea embodied in the second numbered paragraph of the answer; second, upon what grounds a forfeiture of a corporate franchise might be declared; and, third, whether or not, in addition to ousting the corporation from its franchises, the court could and should 'appropriate a part of its substance to the use and benefit of the state.' These propositions were determined after an elaborate consideration of the subject and a review of many authorities. It was decided that the plea following the general denial in the answer amounted to a plea of confession and avoidance; that, in consequence, the general denial first pleaded raised no issue, and hence 'the motion for judgment upon the ground of nonuser should be sustained.' It was next determined, after declaring that it was the duty of the court to act with great caution in decreeing a forfeiture, that forfeiture of the corporate franchises might be declared 'where there is either wilful misuse or wilful nonuse of the franchise or franchises, which are of the essence of the contract with the state, and those in which the state or public is most interested, then a forfeiture of the whole charter should be and will be declared. When a corporation receives from the state a charter granting certain franchises or rights, there is at least an implied or tacit agreement that it will use the franchises thus granted; that it will use no others; and that it will not misuse those granted. A failure in any substantial particular entitles the state to come in and claim her own, the rights theretofore granted, and this through a judgment of forfeiture in a proceeding like the one at bar.' On this branch of the case the court concluded as follows: 'The right to construct and maintain suitable fair grounds in the city and county of St. Louis, and to give exhibitions of agricultural products thereat, is one of the essence of this contract between the state and the respondent. It was and is the franchise in the exercise of which the state and general public have the most interest and concern. A failure to exercise this franchise was a failure to perform the very thing which was of the essence of the contract. That this failure was wilful is shown by the length of time of the admitted nonuser as well as by other things made apparent by the pleadings. So far as the state and general public are concerned, this right or franchise, so long neglected, was leading and uppermost in interest. No legal excuse is offered for respondent's failure. It would appear, at least by inferences deducible from the pleadings, that respondent was alert in promoting that incidental feature of its charter,-gambling upon horse races, and furnishing its gamblers with refreshments, both liquid and solid,-but extremely indifferent as to doing the things, moral in character, which it had, by receiving its charter, tacitly agreed to do, and the only things in which the state and the public had any special interest.

'Such a flagrant and wilful nonuser of franchises which are of the very essence of the grant demand, in our judgment, the forfeiture of all the rights and franchises granted; and we therefore hold that there shall be a judgment decreeing a forfeiture of all the rights and franchises granted to respondent by its charter, and a dissolution of said corporation.'

As to the third proposition, the court was of opinion that no further fine or punishment than that of ouster should be inflicted.

In substance, the contention of plaintiff in error is that the plea, contained in the second paragraph of the answer, merely presented a question of estoppel, which did not waive the prior general denial, and that the judgment of the supreme court of Missouri destroyed, 'without a trial or a hearing, and by an unequal and unjust enforcement of the law, vested property rights, both of plaintiff in error and its stockholders, in the face of Federal immunities which the record shows to have been specially set up and claimed.' In effect this is but asserting that the judgment of the supreme court of Missouri was so plainly arbitrary and contrary to law as to be an act of mere spoliation. But we fail to perceive the slightest semblance of ground for such a contention. In determining the scope and effect of the allegations of the answer, and in reaching the conclusion that the charges of nonuser contained in the information stood as confessed under the pleadings, the supreme court of Missouri followed its conception of the rules of pleading, as expounded in many of the previous decisions of that court, and the question of the extent of the power to take from the corporation its charter grant of franchises was determined as a question of general law. The determination of those matters did not involve a Federal question. San Francisco v. Itsell, 133 U.S. 65, 33 L. ed. 570, 10 Sup. Ct. Rep. 241. Manifestly, the proceeding constituted due process. Caldwell v. Texas, 137 U.S. 692, 34 L. ed. 816, 11 Sup. Ct. Rep. 224; New Orleans Waterworks Co. v. Louisiana (where the subject of the power of a state to forfeit corporate franchises is considered), 185 U.S. 336, 344, 46 L. ed. 936, 941, 22 Sup. Ct. Rep. 691. And if the fact was, which we do not intimate is the case, that the court below erred in the conclusions reached by it in respect to the propositions which it determined, the error would not afford a basis for reviewing its judgment in this court. Central Land Co. v. Laidley, 159 U.S. 103, 112, 40 L. ed. 91, 94, 16 Sup. Ct. Rep. 80, and cases cited; Ballard v. Hunter, 204 U.S. 241, 259, 51 L. ed. 461, 473, 27 Sup. Ct. Rep. 261; Patterson v. Colorado, 205 U.S. 460, 51 L. ed. 880, 27 Sup. Ct. Rep. 556.

The asserted Federal questions were so plainly devoid of merit as not to constitute a basis for the writ of error ( Wilson v. North Carolina, 169 U.S. 586, 595, 42 L. ed. 865, 871, 18 Sup. Ct. Rep. 435), and the writ of error is, therefore, dismissed.