Winona St. Company v. Plainview/Opinion of the Court

To present a federal question on the ground that full faith and credit were not given by the state court to the judgments of the circuit court of the United States in the Marshall and Ilsley cases, it must appear that the state court denied to the plaintiff in error, within the terms of section 709 of the Revised Statutes, 'some title, right, privilege, or immunity' held by the plaintiff in error under the judgments of the circuit court of the United States in those cases, and claimed by it in the state court under the constitution or a statute of the United States; and that the decision of the state court was against the title, right, privilege, or immunity specially set up or claimed by the plaintiff in error under such constitution or statute. This does not appear by the record. The Marshall and Ilsley Cases were suits by citizens of Wisconsin against the towns. Neither the plaintiff in error nor the Plainview Company was a party to those suits, nor was any one in privity with either company such party. Those cases settled only the question whether the towns were liable to Marshall and Ilsley on the bonds. They did not settle the rights of the towns, and of the Plainview Company or the plaintiff in error, as between each other, with regard to the bonds. The circuit court of the United States sustained the validity of the bonds on the ground that Marshall and Ilsley were bona fide holders of them. The fact that the supreme court of Minnesota, in the present cases, did not acquiesce in the correctness of the decision of the circuit court of the United States, did not constitute a federal question. Neither the constitution of the United States nor any act of congress guaranties to a suitor that the same rule of law shall be applied to him by a state court which would be applied if his citizenship were such that his suit might be brought in a federal court. Dupasseur v. Rochereau, 21 Wall. 130; Brooks v. Missouri, 124 U.S. 394. 8 Sup. Ct. Rep. 443; French v. Hopkins, 124 U.S. 524, 8 Sup. Ct. Rep. 589: Chappell v. Bradshaw, 128 U.S. 132, 9 Sup. Ct. Rep. 40; Clark v. Pennsylvania, 128 U.S. 395, 9 Sup. Ct. Rep. 2, 113; Hale v. Akers, 132 U.S. 554, 10 Sup. Ct. Rep. 171; Manning v. French, 133 U.S. 186, 10 Sup. Ct. Rep. 258; Giles v. Little, 134 U.S. 645, 10 Sup. Ct. Rep. 623; County of Cook v. Calumet & C. Canal, etc., Co., 138 U.S. 635, 11 Sup. Ct. Rep. 435.

The cases cited by the plaintiff in error, of Green v. Van Buskirk, 5 Wall. 307, and 7 Wall. 139; Crapo v. Kelly, 16 Wall. 610; Insurance Co. v. Murphy, 111 U.S. 738, 4 Sup Ct. Rep. 679; and Crescent Live-Stock Co. v. Butchers' Union, etc., Co., 120 U.S. 141, 7 Sup. Ct. Rep. 473,-are not applicable to the present cases.

The state court gave to the decisions of the circuit court of the United States all the effect which they could possibly have, namely, the conclusive settlement of the liability of the towns on the bonds to Marshall and Ilsley, as bona fide purchasers. The right of action of the towns depended upon sustaining the Marshall and Ilsley judgments as conclusive, and not to be reviewed by the state courts. It was an essential element of the suits of the towns to show that they had been legally compelled to pay the bonds, in suits by bona fide holders of them. In pursuance of that claim, the state court held that the judgments of the circuit court of the United States were valid and conclusive in favor of the towns in the present suits. There was no question before the circuit court of the United States as to the liability of the towns to the Plainview Company upon the bonds. The decisions of the circuit court of the United States held that Marshall and Ilsley, as bona fide purchasers of the bonds, acquired rights which were superior to those of the Plainview Company. The judgments in the present suits are founded on the fact that the wrongful acts of the Plainview Company enabled Marshall and Ilsley to acquire those rights.

The contention that the act of March 3, 1881, impaired the obligation of a contract is raised for the first time in this court. The records do not show that any such proposition was set up in, or considered by, the state, court. Butler v. Gage, 138 U.S. 52, 11 Sup. Rep. 235.

No federal question was involved in Harrington v. Town of Plainview, 27 Minn. 224, 6 N. W. Rep. 777; but the bonds were held invalid on grounds independent of the act of March 3, 1881. That decision was made in October, 1880, before the act of March 3, 1881, was passed, and was followed by the state court in the present cases. The act of 1881 had no bearing upon the question of the validity of the bonds, and the state court gave to that act no effect on that question; so that these cases fall within the principle of New Orleans Water-Works Co. v. Louisiana Sugar-Refining Co., 125 U.S. 18, 38, 39, 8 Sup. Ct. Rep. 741, because the state court decided them just as if the act of March 3, 1881, had not been passed. There was a perfect right of action in the towns against the Plainview Company before the act of 1881 was passed, and such liability of the Plainview Company was what the plaintiff in error assumed by proceeding under the act of 1881. That statute did not impose, and was not the cause of, such liability, but simply allowed the plaintiff in error to contract to assume such liablity. The act of 1881 does not affect any prior contract. It merely declares that, if the Plainview Company was liable to the towns for having obtained and disposed of the bonds, the plaintiff in error, if it should purchase the property and franchises of the Plainview Company, must assume the liability of that company to the towns; and the plaintiff in error accepted and acted under the terms of the statute, on the express condition that it should be liable to the towns if the Plainview Company were so liable.

The Plainview Company could have raised no such question based on the act of 1881 as the plaintiff in error now seeks to raise. The bonds had been declared void by the state court, as between the Plainview Company and the towns, in a suit to which the town of Plainview and the Plainview Company where parties. The company had made the bonds, which were invalid in its hands, valid in the hands of bona fide purchaser, by transferring them. This took place before the act of 1881 was passed, and a right of action arose at that time in favor of the towns and against the Plainview Company. Such right of action was made fruitless by the purchase of the property and franchises of the Plainview Company by the plaintiff in error. It was necessary for the legislature to authorize the sale and purchase, in order to make them valid, and as a condition of such purchase the statute imposed the liability in question on the plaintiff in error. The liability expressly covered all demands, claims, and rights of action against the Plainview Company arising out of its having 'obtained and disposed of' the bonds and coupons purporting to have been issued by the towns. Therefore the only question in the present suits left to be determined by the state court was whether, as the Plainview Company had disposed of the bonds and coupons to bona fide purchasers, who had enforced them against the towns, a cause of action was created thereby in favor of the towns against the Plainview Company. Inasmuch as, if these suits had been between the towns and the Plainview Company, no federal question would have been presented, there can be none in the present suits.

This court has jurisdiction only when the state court has given effect to a legislative enactment which impairs the obligation of a prior contract. No such thing exists in the present cases. The act of 1881 did not attempt to render invalid any contract between the towns and the Plainview Company. Although the plaintiff in error was held liable by the state court by virtue of the act of 1881, that did not raise a federal question, because the liability was one assumed voluntarily by the plaintiff in error. The liability of the Plainview Company must first be established, before the act of 1881 can have any effect. The supreme court of Minnesota held the bonds invalid by reasons of provisions in the constitution of the state which were in force at the time of the passage of the act of 1877, and it did not hold them invalid by reason of the act of 1881. Bethell v. Demaret, 10 Wall. 537; West Tenn. Bank v. Citizens' Bank of Louisiana, 13 Wall. 432, 14 Wall. 9; Delmas v. Insurance Co., 14 Wall. 661, 666; Tarver v. Keach, 15 Wall. 67; Stevenson v. Williams, 19 Wall. 572; New Orleans Water-Works Co. v. Louisiana Sugar-Refining Co., 125 U.S. 18, 35, 8 Sup. Ct. Rep. 741.

Moreover, the liability of the Plainview Company to the towns, which is sought to be enforced in the present suits against the plaintiff in error, was founded on tort, and did not arise out of any contract relations. That liability was what was assumed by the plaintiff in error, and no question can arise as to the impairment by the act of 1881 of the obligation of any contract.

The writs of error must be dismissed.

Mr. Justice BREWER did not sit in these cases, or take any part in their decision.