It being the settled doctrine of this Court that "the remedy
subsisting in a state when and where a contract is made and is to
be performed is a part of its obligation," and that
"any subsequent law of the state which so affects that remedy as
substantially to impair and lessen the value of the contract is
forbidden by the Constitution, and is therefore void,"
and the Legislature of Missouri having, by the Act of March 23,
1868, to facilitate the construction of railroads, enacted that the
county court should from time to time levy and cause to be
collected, in the same manner as county taxes, a special tax in
order to pay the interest and principal of any bond which might be
issued by a municipal corporation in the state on account of a
subscription, authorized by the act, to the stock of a railroad
company, which tax should be levied on all the real estate within
the township making the subscription, in accordance with the
valuation then last made by the county assessors for county
purposes,
Held:
(1) That it was a material part of this contract that such
creditor should always have the right to a special tax to be levied
and collected in the same manner as county taxes at the same time
might be levied and collected;
(2) That the provisions contained in §§ 6798, 6799,
and 6800 of the Revised Statutes of Missouri of 1879 respecting the
assessment and collection of such taxes are not a legal equivalent
for the provisions contained in the act of 1868, and
(3) That the law of 1868, although repealed by the Legislature
of Missouri, is still in force far the purpose of levying and
collecting the tax necessary for the payment of a judgment
recovered against a municipal corporation in the state upon a debt
incurred by subscribing to the stock of a railroad company in
accordance with its provisions.
This is a proceeding by mandamus in the Circuit Court of the
United States for the Eastern District of Missouri. The alternative
writ recites that in 1883, a peremptory writ of mandamus was issued
by the court, commanding the County Court of Cape Girardeau County,
and the judges thereof, to make a levy on all the real estate and
personal property in
Page 122 U. S. 285
Cape Girardeau Township subject to taxation, including
statements of merchants and manufacturers doing business in said
township, and that thereupon the county court, in obedience to the
command of said writ, on the 23d day of May, 1883, during a regular
term of said county court, made an order on their records whereby
it was ordered that for the purpose of paying the judgments of
Elisha Foote, the Ninth National Bank of New York, John T. Hill
Valentine Winter, and George W. Harshman, amounting to $14,288.20,
and interest and costs, a tax of two percent be levied on all the
real estate and personal property in Cape Girardeau Township
subject to taxation, including statements of merchants and
manufacturers doing business in said township, and the clerk of the
county court was ordered to extend said tax in a separate column on
the tax book of said county for the year 1883; that in obedience to
said order, the special tax ordered to be levied as aforesaid was
by the clerk of said court entered upon and extended in a separate
column of the regular tax book of Cape Girardeau County for the
year 1883, and, upon the completion of said tax book, the same was
delivered, in the time and in the manner required by law for the
year 1883, to James M. Seibert, collector, who was then and there
the collector of taxes, duly elected and qualified as such, and
acting therein for the year 1883, and the said collector was then
and there ordered by the county court to proceed and collect the
said special tax in the same manner as other taxes, state and
county, were authorized to be collected for the said year 1883 in
said county, and that after the receipt of the said tax book, the
said collector, claiming to be prevented from proceeding in the
collection of said tax by an injunction issued by the judge of the
Tenth Judicial Circuit of the State of Missouri, upon a petition
therefor, filed in the name of the State of Missouri upon the
relation of the prosecuting attorney of that county, announced his
determination to abstain from all efforts to demand, sue for, or
collect any part of said special tax, and refused to proceed
further therein.
The return of the respondent Seibert to the alternative writ
admits the facts therein stated and sets out at length
Page 122 U. S. 286
the petition for injunction referred to therein filed on the
29th of December, 1883. The petition, filed in the name of the
State of Missouri by the prosecuting attorney of the county, prays
for an injunction against the collection of the tax on the ground
that it was not a state tax, nor a tax necessary to pay the funded
or bonded indebtedness of the state, nor a tax for current county
expenses or schools, or either, and
"that said county court, before making the levy and order as
aforesaid, did not make or cause to be made an application to the
circuit court of said county, nor to the judge thereof in vacation,
for an order to have assessed, levied, and collected said two
percent tax, nor was any such order in fact made by such court, or
the judge thereof in vacation; that, on the contrary, said county
court, in violation of the statutes in such cases made and provided
and in usurpation of their power, have assessed and levied, and are
now trying to have collected, said two percent tax at its assessed
valuation of all the taxable property of said township, without
said permission or order of said court, in violation of their
duties and without authority of law."
And further that the levy of the two percent tax was made for
the purpose of paying off a portion of a bonded debt contracted in
behalf of Cape Girardeau Township by virtue of the Act of the
General Assembly of the State of Missouri approved March 23, 1868,
in aid of railroads, and is in violation of that act because levied
on the personal property within said township as well as on the
real estate therein.
The return further sets out that the injunction as prayed for
was granted, and the respondent says that, in obedience to the said
writ of injunction, he has ceased to collect or to endeavor to
collect said special tax, the said injunction being still in force.
The respondent in his return further states
"that he is ready and willing to do and perform every duty
devolved upon him as collector as aforesaid so far as he legally
may, but submits whether he ought to be required to collect the
said special tax so as aforesaid levied by the said County
Court
Page 122 U. S. 287
of Cape Girardeau County because, as he is informed by counsel,
the same was not levied in the mode and manner required by the laws
of the State of Missouri as set forth in §§ 6798 and 6799
of the Revised Statutes concerning the assessment and collection of
the revenue, and it is made a criminal offense, punishable by fine
of not less than five hundred dollars and forfeiture of office, for
any officer in the State of Missouri to collect or attempt to
collect any tax or taxes other than those specified and enumerated
in § 6798 of the Revised Statutes of Missouri without being
ordered so to do by the circuit court of the county, or the judge
thereof in vacation, in the manner provided and directed in §
6799 of said Revised Statutes. And respondent submits that the said
special tax is not a tax specified and enumerated in § 6798 of
the Revised Statutes of Missouri, and that no order was made by the
Circuit Court of Cape Girardeau County directing the said county
court to have assessed, levied, and collected such special tax as
required by § 6799 of the Revised Statutes of Missouri, and
that he is informed by counsel that the said levy of such special
tax so as aforesaid made by said county court is illegal and void,
and that respondent cannot collect or attempt to collect the same
without violating the criminal laws of the State of Missouri."
To this return the relator demurred generally. The demurrer was
sustained, and a peremptory writ ordered to issue, and thereupon
the respondent sued out the present writ of error.
Page 122 U. S. 290
MR. JUSTICE MATTHEWS, after stating the case as above reported,
delivered the opinion of the Court.
It is conceded that the relator's judgment, which he is now
seeking to collect, was founded upon municipal obligations of Cape
Girardeau County issued under the authority of an act to facilitate
the construction of railroads in the State of Missouri, which took
effect March 23, 1868. Laws Mo. 1868, p. 92. The second section of
that act is as follows:
"SEC. 2. In order to meet the payments on account of the
subscription to the stock according to its terms, or to pay the
interest and principal on any bond which may be issued on account
of such subscription, the county court shall from time to time levy
and cause to be collected, in the same manner as county taxes, a
special tax, which shall be levied on all the real estate lying
within the township making the subscription in accordance with the
valuation then last made by the county assessor for county
purposes."
It will be observed that the tax authorized by this section of
the statute of 1868, under which the bonds were issued, is to
Page 122 U. S. 291
be levied on the real estate within the township only, and not
upon the personal property, including statements of merchants and
manufacturers doing business in the township. But this levy upon
personal property and merchants' licenses, in addition to real
estate, is authorized by an amendment passed March 10, 1871. 1
Wagner's Statutes, 1872, p. 313, § 52. As thus amended, the
section reads as follows:
"In order to meet the payments on account of the subscription to
the stock according to its terms, or to pay the interest and
principal on any bond which may be issued on account of such
subscription, the county court shall, from time to time, levy and
cause to be collected, in the same manner as county taxes, a
special tax, which shall be levied on all the real estate and
personal property, including all statements of merchants doing
business within said . . . township, . . . lying and being within
the township making the subscription, in accordance with the
valuation then last made by the county assessor for county
purposes,"
&c.
That the relator was entitled to a tax levied in pursuance of
this amended section, his judgment having been obtained while it
was in force, was adjudged in his favor by the circuit court when
he obtained his peremptory mandamus against the judges of the
county court requiring them to levy the tax the collection of which
he is now seeking to enforce by the present proceeding. The
question was also directly adjudged in his favor by this Court in
the case of
Cape Girardeau County Court v. Hill,
118 U. S. 68. In
that case, it was said:
"The township having legally incurred an obligation to pay the
bonds in question, it was competent for the legislature at any time
to make provision for its being met by taxation upon any kind of
property within the township that was subject to taxation for
public purposes."
Having obtained his judgment while that act remained in force,
and having obtained by the judgment of the circuit court an actual
levy of a tax according to its provisions, his right thereto became
thereby vested so as not to be affected by a subsequent repeal of
the statute. But on March 8, 1879, the General Assembly of the
State of Missouri passed an act,
Page 122 U. S. 292
found in §§ 6798, 6799, and 6800 of the Revised
Statutes of Missouri of 1879, which read as follows:
"SEC. 6798.
Taxes, how Assessed, Levied, and Collected.
The following named taxes shall hereafter be assessed, levied, and
collected in the several counties in this state, and only in the
manner and not to exceed the rates prescribed by the constitution
and laws of this state,
viz., the state tax and the tax
necessary to pay the funded or bonded debt of the state, the tax
for current county expenditures, and for schools."
"SEC. 6799.
Procedure, Limitations, and Conditions. No
other tax for any purpose shall be assessed, levied, or collected
except under the following limitations and conditions,
viz., the prosecuting attorney or county attorney of any
county, upon the request of the county court of such county, which
request shall be of record with the proceedings of said court, and
such court being first satisfied that there exists a necessity for
the assessment, levy, and collection of other taxes than those
enumerated and specified in the preceding section, shall present a
petition to the circuit court of his county, or to the judge
thereof in vacation, setting forth the facts and specifying the
reasons why such other tax or taxes should be assessed, levied, and
collected, and such circuit court, or judge thereof, upon being
satisfied of the necessity for such other tax or taxes, and that
the assessment, levy, and collection thereof will not be in
conflict with the Constitution and laws of this state, shall make
an order directed to the county court of such county commanding
such court to have assessed, levied, and collected such other tax
or taxes, and shall enforce such order by mandamus or
otherwise."
"SEC. 6800.
Assessment, Levy, and Collection not to be Made
Except as Provided. Any county court judge or other county
officer in this state who shall assess, levy, or collect, or who
shall attempt to assess, levy, or collect, or cause to be assessed,
levied, or collected any tax or taxes other than those specified
and enumerated in section six thousand seven hundred and
ninety-eight without being first ordered so to do by the circuit
court of the county or the judge thereof in the express manner
provided and directed in section six thousand seven
Page 122 U. S. 293
hundred and ninety-nine, shall be guilty of a misdemeanor, and
upon conviction thereof shall be punished by fine not less than
five hundred dollars, and in addition to such punishment, his
office shall become vacant, and the method herein provided for the
assessment, levy, and collection of any tax or taxes not enumerated
and specified in section six thousand seven hundred and
ninety-eight shall be the only method known to the law whereby such
tax or taxes may be assessed or collected or ordered to be
assessed, levied, or collected."
By these provisions, it appears that the state tax and the tax
necessary to pay the funded or bonded debt of the state, the tax
for the current county expenditures, and for schools are to be
assessed, levied, and collected in the several counties of the
state as a matter of positive duty by the county courts of the
several counties, according to their previous practice, without the
intervention of any other authority. All other taxes, which include
the tax sought to be collected in this proceeding, can be assessed,
levied, and collected only under the limitations and conditions
therein prescribed -- that is to say the county court, being first
satisfied that there exists a necessity for the assessment, levy,
and collection of such other tax, shall request the prosecuting
attorney for the county to present a petition to the circuit court
of the county, or to the judge thereof in vacation, setting forth
the facts and specifying the reasons why such other tax or taxes
should be assessed, levied, and collected. In pursuance of that
request, the prosecuting attorney is required to present such a
petition, and the circuit court or judge thereof to whom such
petition is presented shall make an order directed to the county
court of such county commanding such court to have assessed,
levied, and collected such tax
"upon being satisfied of the necessity for such other tax or
taxes, and that the assessment, levy, and collection thereof will
not be in conflict with the Constitution and laws of this
state."
Section 6800 provides that any county court judge or other
county officer who shall assess, levy, or collect, or attempt so to
do or cause to be assessed, levied, or collected, any tax without
being first ordered so to do by the circuit court of the county in
the express manner provided
Page 122 U. S. 294
and directed in the preceding section, shall be guilty of a
misdemeanor, to be punished on conviction by a fine of not less
than $500 and a forfeiture of his office, and it is therein
declared that
"the method herein provided for the assessment, levy, and
collection of any tax or taxes not enumerated and specified in
§ 6798 shall be the only method known to the law whereby such
tax or taxes may be assessed or collected, or ordered to be
assessed, levied, or colleted."
It is because of these provisions of the law that the respondent
herein, as he sets out in his return, has been restrained by an
injunction from the Circuit Court of Cape Girardeau County from
further proceeding in the collection of the tax heretofore levied
by the county court by virtue of a writ of mandamus from the
circuit court of the United States.
The question presented for our determination is whether, by
virtue of this statute of the state, he is justified in his
disobedience to the judgment and mandate of the circuit court of
the United States. It is well settled by the decisions of this
Court that
"the remedy subsisting in a state when and where the contract is
made and is to be performed is a part of its obligation, and any
subsequent law of the state which so affects that remedy as
substantially to impair and lessen the value of the contract is
forbidden by the Constitution, and is therefore void."
Edwards v. Kearzey, 96 U. S. 595,
96 U. S.
607.
It had been previously said, upon a review of the decisions of
the Court in
Von Hoffman v. City of
Quincy, 4 Wall. 535,
71 U. S.
553:
"It is competent for the states to change the form of the
remedy, or to modify it otherwise as they may see fit, provided no
substantial right secured by the contract is thereby impaired. No
attempt has been made to fix definitely the line between
alterations of the remedy which are to be deemed legitimate and
those which, under the form of modifying the remedy, impair
substantial rights. Every case must be determined upon its own
circumstances. Whenever the result last mentioned is produced, the
act is within the prohibition of the Constitution, and to that
extent void."
In
Bronson v.
Kinzie, 1 How. 311, Chief Justice Taney said:
"It is difficult perhaps to draw a line that would be
Page 122 U. S. 295
applicable in all cases between legitimate alterations of the
remedy and provisions which, in the form of remedy, impair the
right. But it is manifest that the obligation of the contract and
the rights of a party under it may in effect be destroyed by
denying a remedy altogether, or may be seriously impaired by
burdening the proceedings with new conditions and restrictions so
as to make the remedy hardly worth pursuing."
In
Louisiana v. New Orleans, 102 U.
S. 203,
102 U. S. 206,
MR. JUSTICE FIELD, in the opinion of the Court, said:
"The obligation of a contract, in the constitutional sense, is
the means provided by law by law by which it can be enforced -- by
which the parties can be obliged to perform it. Whatever
legislation lessens the efficacy of these means impairs the
obligation. If it tend to postpone or retard the enforcement of the
contract, the obligation of the latter is to that extent
weakened."
In various forms, but with the same meaning, this rule has been
often repeated in subsequent decisions by this Court. It is
therefore not denied in argument in the present case that section 2
of the Act of March 23, 1868, under which the municipal obligations
of the relator which had passed into judgment were issued,
constitutes a part of the contract to the benefit of which he is
entitled. That section, it will be remembered, provides that to pay
the interest and principal of any bond which may be issued under
the authority thereof, "the county court shall from time to time
levy and cause to be collected, in the same manner as county taxes,
a special tax," etc.
The precise question, therefore, for present adjudication is
whether the provisions for levying and collecting such a tax
contained in the sections of the Revised Statutes above quoted are,
in view of the doctrine of this Court on that subject, a legal
equivalent for the provision contained in the Act of March 23,
1868. The affirmative of that proposition is contended for by the
plaintiff in error. The argument in support of that position is
that the machinery provided for the collection of such a tax in
§ 6799 is purely formal; that it does not touch the substance
of the right to have the tax levied and collected, nor does it
embarrass and impede it by any unreasonable hindrance
Page 122 U. S. 296
or delay. It is said that, according to its terms, under a
judgment upon such municipal bonds and coupons in a circuit court
of the United States, it would be the duty of the county court to
enter of record that it was satisfied of the existence of the
necessity for the levy and collection of such a tax, and thereupon
to request the prosecuting attorney to file his petition to the
circuit court of the county to obtain the proper order therefor;
that it would then be the duty of the prosecuting attorney to file
such a petition, and that the circuit court, or a judge thereof, on
the production of the judgment required to be paid, would be
satisfied of the necessity for such tax, and that the assessment,
levy, and collection thereof would not be in conflict with the
Constitution and laws of the state, even although he might be of
the opinion that the bonds themselves were not valid according to
the laws of the state and that accordingly the order would be made
and directed to the county court commanding that court to have
assessed, levied, and collected the tax, the necessity for the
collection of which they had already declared upon their own
records.
The point of the argument pressed upon us seems to be that the
judgment of the circuit court of the United States upon the bonds
and coupons would necessarily be conclusive, in the opinion of the
county court and of the prosecuting attorney and of the circuit
court of the county, upon all matters of law and of fact which
otherwise, by this section of the statute, would be committed to
the exercise of their judicial discretion, and that consequently
everything to be done by them under the provisions of that section
would thereby become merely ministerial, so that, in case of their
refusal to act, they would be subject at the suit of the judgment
creditor to a proceeding by mandamus to compel them to proceed in
the assessment, levy, and collection of the tax to which he was
entitled.
But the contract which the relator is entitled to insist upon
under the Act of March 23, 1868, is that he shall have a special
tax for the payment of the principal and interest due him, to be
levied from time to time "in the same manner as county taxes." It
may be admitted that the legislature, from time to time,
notwithstanding this provision, might by subsequent
Page 122 U. S. 297
legislation change the mode and the means for the assessment,
levy, and collection of county taxes, as in its judgment the public
interests should require. Any such changes, made in view of public
interests, not substantially to the prejudice of public creditors,
might be considered, in respect to them, as the legal equivalent
for the particular mode in force in 1868, and a fair and reasonable
substitute therefor. Ordinarily it would be true that such altered
provisions would not be injurious to any private rights, for the
creditor would at all times have the guarantee of as prompt and
speedy a collection of a tax in satisfaction of his claim as is
secured by law for the collection of the revenues of the county
most important for the support of its government.
It may therefore be considered as a most material and important
part of the contract contained in the second section of the Act of
March 23, 1868, not, perhaps, that the creditor shall always have a
right to have taxes for his benefit collected in the same manner in
which county taxes were collectible at that date, but that he shall
at least always have the right to a special tax to be levied and
collected in the same manner as county taxes at the same time may
be levied and collected. In other words, the essential part and
value of the contract is that he shall always have a special tax to
be collected in a manner as prompt and efficacious as that which
shall at the time, when he applies for it, be provided by law for
the collection of the general revenue of the county. His contract
is not only that he shall have as good a remedy as that provided by
the terms of the contract when made, but that his remedy shall be
by means of a tax, in reference to which the levy and collection
shall be as efficacious as the state provides for the benefit of
its counties, without any discrimination against him.
It is in this vital point that the obligation of the contract
with the relator has been impaired by the section of the law under
which the respondent seeks to justify his disobedience of the
mandate of the circuit court. Those sections provide one mode for
the collection of county taxes by the direct action of the county
court. They provide another mode for
Page 122 U. S. 298
the collection of the special tax for the payment of obligations
such as those held by the relator and merged in his judgment. They
expressly declare that he shall not be entitled to a tax collected
in the same manner as county taxes, but add limitations and
conditions which, whatever may have been the legislative motive,
compared with the original remedy provided by the law for the
satisfaction of his contract, cannot fail seriously to embarrass,
hinder, and delay him in the collection of his debt, and which make
an express and injurious discrimination against him.
We are referred by counsel for the plaintiff in error to the
case of
Hawley v. Fairbanks, 108 U.
S. 543, as an authority in support of his contention. In
that case, however, a peremptory mandamus was awarded to compel the
levy and collection of a tax for the payment of a judgment of the
circuit court of the United States, notwithstanding an injunction
to the contrary issued out of the state court. And it was there
held that the judgment of the circuit court of the United States
against the municipality was a sufficient warrant and authority to
the county clerk to make the assessment of a tax for its payment,
notwithstanding the omission of the preliminary certificates of the
town clerk and the allowance by the board of auditors of the town,
which in other cases to law made necessary to the orderly levy and
collection of the tax.
We have also been furnished with the opinion of the Supreme
Court of the State of Missouri, in the case of
State v. Judges
County Court of Cape Girardeau County, 3 S.W. 844, delivered
March 21, 1887, affirming the judgment of the Circuit Court of Cape
Girardeau County perpetuating the injunction set up in the return
of the respondent in this case as an answer to the alternative
mandamus. The judge delivering the opinion of the court said:
"It has been ruled by this court that taxes of the nature now in
question can only be levied and collected in the manner provided in
said section [§ 6799], and that unless the methods prescribed
are pursued, the failure to pursue them when, as here, they are the
conditions essential to the exercise of the power will render the
tax invalid.
State v. Hannibal & St. Joseph
Page 122 U. S. 299
Railroad, 87 Mo. 236. Here those methods -- those
conditions precedent -- were not followed, and hence the county
court, having no inherent power to levy a tax and deriving its only
authority from the state, must of necessity pursue the course in
this regard marked out by the sovereign authority -- by its
laws."
The court further proceeds to say that the matter is not
affected by the mandate of the federal court, in reference to which
the opinion proceeds as follows:
"If, as already seen, the county court was powerless to act
except when acting in conformity to express statutory conditions,
it was still the duty of the judges to comply with those conditions
while yielding obedience to the mandate aforesaid, for outside of
those statutory conditions they were utterly powerless to act.
Indeed, under § 6800, they were punishable for a misdemeanor
in failing to comply with the provisions of § 6799 before
levying the tax. It does not stand to reason that their act could
be valid and at the same time punishable as a crime.
State v.
Garroutte, 67 Mo. 445, 456. If the statutory provisions being
discussed were of such a nature as to cut off those who obtained
the judgments from enforcing the obligations held by them, then the
authorities cited on their behalf might apply. I understand that it
is within the power of the state to change the remedy so long as it
does not essentially affect the right embodied in the contract, and
that such change, thus made, does not infract the rule that forbids
the contract to be impaired."
The opinion assumes that the remedy for the collection of the
tax provided by the sections of the Revised Statutes of Missouri
referred to is legally equivalent to that contained in § 2 of
the Act of March 23, 1868, the differences between them not
appearing to have been considered. It also assumes for that reason
that those provisions of the Revised Statutes are the only laws in
force for the collection of such a tax, those in force in 1871,
when the judgment of the circuit court was rendered, having been
repealed.
For the reasons which we have pointed out, we are unable to
concur in the judgment of the Supreme Court of Missouri, and are
constrained to hold that the sections of the Revised Statutes in
question impair the obligation of the contract with
Page 122 U. S. 300
the relator under the Act of March 23, 1868, and as to him are
therefore null and void by force of the Constitution of the United
States, and that the laws of Missouri for the collection of the tax
necessary to pay his judgment, in force at the time when it was
rendered, continue to be and are still in force for that purpose.
They are the laws of the state which are applicable to his case.
When he seeks and obtains the writ of mandamus from the circuit
court of the United States for the purpose of levying a tax for the
payment of the judgment which it has rendered in his favor, he asks
and obtains only the enforcement of the laws of Missouri under
which his rights became vested, and which are preserved for his
benefit by the Constitution of the United States. The question
therefore is not whether a tax shall be levied in Missouri without
the authority of its law, but which of several of its laws are in
force and govern the case. Our conclusion is that the statutory
provisions relied upon by the respondent in his return to the
alternative writ of mandamus do not apply, and do not therefore
afford the justification which he pleads.
The judgment of the circuit court is accordingly
affirmed.
