In ascertaining the jurisdictional amount on an appeal to this
Court, it is proper to compute interest as part of the claim.
Whether a general law can be made applicable to the subject
matter in regard to which a special law is enacted by a territorial
legislature is a matter which rests in the judgment of the
legislature itself.
The statute in question in this case creates a special tribunal
for hearing and deciding upon claims against a municipal
corporation, which have no legal obligation, but which the
legislature thinks have sufficient equity to make it proper to
provide for their investigation, and payment when found proper, and
it does not in any way regulate the practice in courts of justice,
and it is indisputably within the power of the territorial
legislature to pass it, and it does not infringe upon the Seventh
Amendment to the Constitution.
The court has the power, in the absence of statutory provisions
for notice to parties, to make rules regarding it.
The President of the United States, by proclamation dated March
23, 1889, 26 Stat. 1544, declared that the Territory of Oklahoma
would be open for settlement on April 22, 1889, subject to the
restrictions of the Act approved March 2, 1889, c. 412, 25 Stat.
980, 1004. By that act, the lands were to be disposed of to actual
settlers under the homestead laws only, and, until the lands were
open for settlement under the proclamation of the President, no
person was permitted to enter upon or occupy the same.
By the Act approved May 2, 1890, c. 182, 26 Stat. 81, Congress
provided a temporary government for the territory, and by the Act
approved May 14, 1890, c. 207, 26 Stat. 109, provision was made for
townsite entries.
From the opening of the territory under the proclamation of the
President down to the passage of the Act of May 2, 1890, Congress
failed to establish any government for it. During that period,
settlers had come into the territory, and a number
Page 173 U. S. 529
of townsites had been located and settled upon by them. Many
persons located and took up their residence upon the land contained
in the present boundaries of the City of Guthrie. The lands were
surveyed into streets, alleys, squares, blocks, and lots, and what
were known as "provisional municipal governments" were formed. By
the general consent of these residents, four distinct provisional
municipal corporations or villages, denominated "Guthrie," "East
Guthrie," "Capitol Hill," and "West Guthrie," comprising some 320
acres each, were created. They were all without any law governing
them, although officers were selected by the people occupying the
lands and a form of government was carried on by a kind of mutual
understanding. The persons chosen as officers incurred indebtedness
in administering the affairs of the municipalities, but there was
no authority to raise the necessary revenues, by taxation or
otherwise, to pay the same. These officers exercised in fact the
powers usually delegated to municipal corporations. Public
improvements such as grading streets, constructing bridges, and
erecting buildings were made, laws and ordinances were adopted, and
offenders were punished. Schools were maintained, and the right of
possession of the various claimants to town lots within their
respective boundaries was regulated and certificates were issued by
the local tribunals constituted by the municipal authorities for
determining the rights of settlers and occupants of the various
lots within the limits of the municipal governments, and the
certificates thus issued were by the second section of the townsite
act, above mentioned, 26 Stat. 109, to be taken as evidence of the
occupancy of the holder thereof of the lot or lots therein
described, except that, where there was an adverse claim to the
property, the certificate was to be only
prima facie
evidence of the claim or occupancy of the holder.
The claims mentioned in the act of the territorial legislature
hereafter spoken of arose out of these circumstances, and
represented the expenditures of the provisional governments for
some or all of the objects above enumerated.
In December, 1890, a code of laws for the permanent government
of the territory was enacted by the territorial
Page 173 U. S. 530
legislature, and these provisional village governments, lying
adjacent to one another, were incorporated under that authority
into the regularly organized Village of Guthrie, and on April 7,
1893, the City of Guthrie became the successor of the village of
that name.
On December 25, 1890, the territorial legislature passed an act,
chapter 14 of the laws of that year, for the purpose of providing a
method by which to raise the necessary funds to pay the
indebtedness incurred by the provisional governments of the four
villages above named. The act is set forth in the margin.
*
Page 173 U. S. 531
Pursuant to the provisions of that act, the district judge duly
appointed the commission, which proceeded to hear the cases, and on
September 1, 1891, it filed in the District Court of Logan County
its final report. That report contained, among other things, a
reference to the various claims which were therein said to be owned
by the Guthrie National Bank, and it showed the allowance of such
claims, separately and in detail, and that they were all based upon
warrants which had been issued by the provisional governments. The
report also showed that the City Attorney of the City of Guthrie
appeared at the hearing and allowance of the claims and defended
for the city. The amount allowed against the city in favor of the
bank was $4,315.22. Other claims in favor of other parties were
allowed, and many were disallowed, by the commission. On the coming
in of this report, the case was docketed as a pending case in the
district court, and was continued from time to time until March 17,
1893, when the bank made a motion to approve the findings of the
commission as regards the claims held by it, which motion was not
then decided. On April 7, 1893, the city filed exceptions to the
report of the commission. Nothing further was done until March 28,
1896 at which time the city attorney filed a motion in the
Page 173 U. S. 532
district court to dismiss the proceedings by the bank, and all
other proceedings based upon the act of the territorial legislature
creating the commission, for the reason, as stated, that the act
and all proceedings under it were void. On April 2, 1896, the
matter came on for hearing upon the motion of the bank to confirm
the report of the commission, and the motion of the city to dismiss
the proceedings, and on the last-named day, the court sustained the
motion of the city and dismissed the proceedings upon the ground
that the act under which the commission was appointed was wholly
void. This decision of the court was excepted to by the bank, and
thereupon it prosecuted a writ of error from the supreme court of
the territory to reverse such decision. On June 11, 1897, that
court affirmed the decision of the district court and rendered
judgment against the bank for costs. To reverse this judgment, an
appeal has been taken to, and a writ of error sued our from, this
Court.
MR. JUSTICE PECKHAM, after stating the facts, delivered the
opinion of the Court.
A motion is made in this case to dismiss the appeal and writ of
error on the ground that the sum involved is not sufficient to give
jurisdiction to this Court. 26 Stat. 81, § 9. It is claimed
that the amount is less than $5,000, and that this fact appears
from the report of the commission, which allowed but $4,315.22 as
the amount due from the city to the bank.
Section 4 of the act of the territorial legislature under which
the commission acted provides that claims which are allowed and
approved by the district judge are to be certified to the Mayor and
Council of the Village of Guthrie, who are directed to issue
warrants upon the village for the amounts,
Page 173 U. S. 533
which bear interest at the rate of six percent from the date of
the allowance by the commission, and a tax is to be levied as
therein provided for the payment of the warrants.
On March 28, 1896, when the City of Guthrie filed its motion in
the district court to dismiss the proceeding by the bank, over four
years and six months' interest had accrued upon the claim reported
by the commission, and as, by the terms of the act, interest was to
be allowed from the filing of that report up to the time of the
issuing of the warrant, which could not issue until after the
report had been approved by the district court, it is plain that
more interest had then accrued than was necessary to bring the
amount then in issue beyond the sum of $5,000. It is proper to
compute interest as part of the claim.
Woodward v. Jewell,
140 U. S. 247. We
think this is an answer to the motion to dismiss.
Other objections are made to the act by the representatives of
the city, which will be noticed.
It is claimed that it violates the Act of Congress approved July
30, 1886, c. 818, 24 Stat. 170, prohibiting the passage of local or
special laws in the territories. That act, among other things,
provides that where a general law can be made applicable, no
special law shall be enacted in any of the territories of the
United States by the territorial legislatures thereof, and it also
provides that the territorial legislatures shall not pass local or
special laws in any of the cases therein enumerated, among which is
a law to regulate the practice in courts of justice. Both of these
provisions are said to have been violated in the passage of the act
in question.
Whether a general law can be made applicable to the subject
matter in regard to which a special law is enacted by a territorial
legislature is a matter which, we think, rests in the judgment of
the legislature itself.
State v. Hitchcock, 1 Kan. 184.
That body is specially prohibited from passing any local or special
law in regard to certain subjects enumerated in the act. Outside
and beyond that limitation is the provision above mentioned, and
whether or not a general law can be made applicable to the subject
is a matter which is confided to the judgment of the
legislature.
Page 173 U. S. 534
Neither does the act in this case regulate the practice in
courts of justice. The prohibition of the statute of Congress
relates to the passing of a law by the territorial legislature,
local or special in its nature, which does in effect regulate the
mode of procedure in a court of justice in some particular locality
or in some special case, thus altering in such locality or for such
case the ordinary course of practice in the courts. The statute
here in question is of an entirely different nature. It creates a
special tribunal for hearing and deciding upon claims against a
municipal corporation which have no legal obligation, and which
therefore could not be enforced in a court, but which the
legislature thinks have sufficient equity, and are based upon a
sufficiently strong moral obligation, to make it proper for it to
provide for their investigation, and for the payment of such as are
decided to be proper, by taxation upon the property situated in the
city. Such an act does not in any way regulate the practice in
courts of justice.
The important question in this case is whether the territorial
legislature, by virtue of the grant to it of legislative powers,
had authority to create this commission and to provide for the
payment of claims of the nature mentioned in the act.
By section 6 of the above-mentioned act of Congress of May 2,
1890, 26 Stat. 81 c. 182, the legislative power of the territory
extends to all rightful subjects of legislation not inconsistent
with the Constitution and laws of the United States. Some other
limitations are mentioned not material to be here considered. The
same power is also granted to all the territories by section 1851,
Revised Statutes of the United States.
This territorial act was passed by the legislature with
reference to the circumstances set forth in the statement of
facts.
It was said by the Supreme Court of Oklahoma in
Guthrie v.
Territory, 1 Okl. 188, 194, that:
"These provisional governments grew out of a necessity made by
the absence of legal authority. They were aggregations of people
associated together for the purpose of mutual benefit and
protection. Without any statute law, they became a law unto
themselves and adopted the forms of law and government common
among
Page 173 U. S. 535
civilized people, and enforced their authority by the power of
public sentiment. They had no legal existence. They were
nonentities. They could not bind themselves by contracts or bind
anyone else."
The services performed for and the materials furnished these
provisional governments, under the circumstances stated, would
certainly be regarded as proper and as beneficial -- probably as
absolutely necessary -- for the wellbeing of the people living
there. The villages which were subsequently incorporated under the
law of the territory succeeded to and enjoyed these benefits, and
passed them on to their successor, the City of Guthrie, the present
defendant in error and appellee. These facts give great force and
strength to the moral consideration supporting claims of the nature
here existing. Though they could not be enforced at law, the
question is whether the territorial legislature was unequal to the
task of providing for their payment by the city, which has received
the benefit as above described.
This territorial act shows that only claims of a municipal
character and of a
bona fide nature could be allowed. It
is also plain that the use of the words "district judge" therein
does not mean to distinguish between the judge and the court. There
being but one judge of that court, the words are seemingly used
interchangeably with "district court," and to mean the same as the
latter expression.
We regard the power of the territorial legislature to pass this
act as indisputable. It comes within the grant to that legislature
contained in the act of Congress and in the Revised Statutes above
cited.
In
United States v. Realty Company, 163 U.
S. 427,
163 U. S. 439,
the power of Congress to recognize a moral obligation on the part
of the nation and to pay claims which, while they were not of a
legal character, were nevertheless meritorious and equitable in
their nature, was affirmed. The territorial legislature at least
had the same authority as that possessed by Congress to recognize
claims of the nature described. It is a legislative power, and it
was granted to the territorial legislature by the acts already
referred to. A city is a municipal
Page 173 U. S. 536
corporation and a political subdivision of the state, and what
the state could do itself it has the power to direct its agent, the
municipality, to do.
In
New Orleans v. Clark, 95 U. S.
644, Mr. Justice Field, in delivering the opinion of the
Court and speaking of municipal corporations at page
95 U. S. 653,
said:
"The books are full of cases where claims, just in themselves,
but which, from some irregularity or omission in the proceedings by
which they were created, could not be enforced in the courts of
law, have been thus recognized, and their payment secured."
And on page
95 U. S.
654:
"A city is only a political subdivision of the state made for
the convenient administration of the government. It is an
instrumentality, with powers more or less enlarged according to the
requirements of the public and which may be increased or repealed
at the will of the legislature. In directing, therefore, a
particular tax by such corporation and the appropriation of the
proceeds to some special municipal purpose, the legislature only
exercises a power through its subordinate agent which it could
exercise directly, and it does this only in another way when it
directs such a corporation to assume and pay a particular claim,
not legally binding for want of some formality in its creation, but
for which the corporation has received an equivalent,"
-- citing
People v. Burr, 13 Cal. 343;
Town of
Guilford v. Supervisors &c., 13 N.Y. 143. In the latter
case, the legislature passed an act directing commissioners to
determine and award the amount paid and expended by certain highway
commissioners and directing the board of supervisors of the county
to assess the amount thus awarded upon the taxable property of the
town and to cause it to be paid in satisfaction of the claim. This
was held to be a valid act, although the claim had been rejected in
a suit brought to obtain its payment and a previous legislature had
passed an act directing the claim to be submitted to the electors
at a town meeting and declaring their decision should be final and
conclusive, and upon such submission the claim had been rejected.
It was said that the legislature of the state had power to levy a
tax upon the taxable property of the town and appropriate the
Page 173 U. S. 537
same to the payment of the claim made by an individual against
the town even though the claim to satisfy which the tax was levied
was not recoverable by action against the town, and it was held
that the state could recognize claims founded in equity and justice
in the larger sense of these terms, or in gratitude or charity.
It is not necessary to say in this case that the legislature had
the power to donate the funds of the municipality for purposes of
charity alone. The facts show plain moral grounds for the act -- a
consideration existing in the benefits received and enjoyed by the
city or by its predecessors from whom it took such benefits. The
legislature might have decided the facts for itself, but, instead
of that, it appointed this tribunal.
In
Read v. Plattsmouth, 107 U.
S. 568, the words of Mr. Justice Field in
New
Orleans v. Clark, supra, were quoted with approval. In the
exercise of this jurisdiction over municipal corporations by the
state or by the territorial legislature, no constitutional
principle is violated. It is a jurisdiction which has been
customarily exercised ever since the foundation of the government,
and is based upon the power of the state, as sovereign, to itself
recognize, or to compel any of its political subdivisions to
recognize, those obligations which, while not cognizable in any
court of law, are yet based upon considerations so thoroughly
equitable and moral as to deserve and compel legislative
recognition.
There is no force to the objection that in ascertaining the
facts, provision must be made for a trial by jury, if demanded, or
else that the Seventh Amendment to the Constitution of the United
States is violated, which provides that "in suits at common law,
where the value in controversy shall exceed twenty dollars, the
right of trial by jury shall be preserved."
This act does not infringe upon that amendment. The proceeding
under it is not in the nature of a suit at common law, and the
cases already cited show the power of the legislature to provide
for payment by taxation of claims of the nature of those involved
herein.
The cases of
Bank of Hamilton v. Dudley's
Lessee, 2 Pet.
Page 173 U. S. 538
492,
American Publishing Co. v. Fisher, 166 U.
S. 464, and
Salt Lake City v. Tucker,
166 U. S. 707,
were cases of suits at common law, and
Thompson v. Utah,
170 U. S. 343, was
a criminal case. Those cases therefore do not apply here.
It is also stated that these claims were not incurred by
officers of either a
de jure or
de facto
government, and that hence there was no power in the legislature to
compel the City of Guthrie to pay claims which it never agreed to
pay either as a corporation
de jure or
de facto.
But the cases above cited were cases where there was no legal
obligation to pay the claims, and the acts in effect compelled
their payment. The city here was under a plain moral duty to
provide payment for honest and proper claims of this nature, and it
seems as if it ought to be entirely ready to pay them. If any
claims were without merit or fraudulent, there was opportunity to
show such fact before the commission, and also before the district
court, upon the hearing provided for by the act. The defendants in
error say that there is by the act no opportunity provided for any
investigation of these claims by the district court after the
commission has reported the claims to that court, because the act
does not give the court power to make any investigation for itself.
We do not see that this is material, even if true. We are of
opinion, however, that the district court has such power. The
statute provides, in section 4, that the commission shall make a
report to the district court, showing the names of the claimants
and the amounts allowed by the commission, and also all the claims,
and the names of persons and amounts disallowed by them, and this
report, the statute directs, shall be made "for the approval or
disapproval of the district court." The report need contain nothing
but what has just been stated, and it is obvious that, on such a
report alone, the district court would be entirely without means of
determining whether to approve or disapprove the decision of the
commission in any particular claim. But as the report of the
commission is to be made to the district court for its approval or
disapproval, it follows as of necessity that the court has power to
investigate for itself the facts upon which the claims were founded
in order that it may intelligently
Page 173 U. S. 539
approve or disapprove of the decisions of the commission. It is
not to be supposed that the provision in the act for making a
report to the district court, and for its approval or disapproval,
was a purely formal matter, and that the court might arbitrarily,
unreasonably, or improperly approve or disapprove any claim. If
not, then the court must have power, in the necessary discharge of
its duty to approve or disapprove, to ascertain the facts necessary
to an intelligent discharge of that duty. These facts may be found
by the court without a jury. As the statute does not provide for a
report of the facts found by the commission upon which it based the
allowance or disallowance of the claims, or any of them, the court
must itself find them in order to approve or disapprove.
Although the act makes no provision for notice to the parties
interested as to the time or manner in which the district court
will proceed to investigate the character of the claims, yet in the
absence of any such provision, the court having the duty to
investigate would have power to regulate the time of the hearing,
and provide for reasonable notice by its rules, so as to prevent
surprise. This in substance was held in
United
States v. Ritchie, 17 How. 525,
58 U. S. 533,
where a similar lack of provision for notice in a certain section
of the act was referred to, and the power of the court to make
rules in regard to it was asserted.
Whether the act is to be construed as making the decision of the
district court upon the merits of any claim final it is not now
necessary to decide. The district court has refused to exercise any
jurisdiction under the act, because it decided the act was invalid.
Upon such a judgment, we think a writ of error was properly sued
out from the territorial supreme court, under the ninth section of
the act, c. 182, 26 Stat. 85, and under the same section, a writ of
error from this Court to the latter court may properly issue.
The other questions set forth in the brief of counsel for the
defendant in error, relating to parties and matters of procedure,
we have examined, and regard them as without merit.
We are of opinion that the district court erred in dismissing
these proceedings on the ground of the invalidity of the
Page 173 U. S. 540
act under which they were taken, and that the supreme court of
the territory erred in affirming that judgment of dismissal,
and
We therefore reverse the judgment of the latter court, and
remand the case, with directions to that court to reverse the
judgment of the district court, with directions to the district
court to proceed to a hearing of the claims upon their
merits.
MR. JUSTICE HARLAN dissented.
*
"
Chapter 14. City Indebtedness"
"An act for the purpose of providing for the allowance and
payment of the indebtedness heretofore created by the people and
Cities of Guthrie, East Guthrie, West Guthrie and Capitol Hill, now
consolidated into the Village of Guthrie."
"Article I. Guthrie, East Guthrie, West Guthrie and Capitol
Hill."
"SEC 1. That the district judge of Logan County is hereby
empowered to appoint three disinterested persons to act as a
commission or referees to inquire into and pass upon all claims and
demands of every character heretofore issued by the city
governments mentioned in the caption of this act, for all
purposes."
"SEC. 2. That the owners and holders of any kind of scrip,
warrants or other evidence of indebtedness heretofore issued by the
city governments of Guthrie, East Guthrie, West Guthrie and Capitol
Hill, shall present their claims to the commissioners or referees,
to be appointed by the district judge, under oath, stating that the
same is a
bona fide claim, that they performed the labor
or advanced the money or furnished the materials or purchased same
for a valuable consideration, and that they believe the city
issuing the same did so for necessary expenses incurred in running
the city government, and said master shall hear further evidence if
he deem necessary before allowing the same."
"SEC. 3. The commission or referees shall keep a record of all
claims filed with them for allowance and keep their office open
during the hours of nine o'clock in the morning an four o'clock
p.m., and shall be allowed sixty days to hear and determine all
claims, or longer if the district judge so orders. Said commission
or referees shall immediately after this appointment extend ten
days' notice in some newspaper published in the Village of Guthrie,
notifying all parties holding or owning any claims mentioned in
this act to present the same to them for allowance, and all persons
who fail to present their claims within thirty days from date of
publication mentioned in this section shall be forever precluded
from so doing hereafter."
"SEC. 4. That after the commission or referees shall have passed
upon and allowed any and all claims mentioned in this act, they
shall make a report to the district court of same showing the names
and amounts allowed by them and also all claims and the names of
persons and amounts disallowed by them for approval or disapproval
of the district judge. And all claims allowed and approved by the
district judge shall be certified to the Mayor and Council of the
Village of Guthrie, who are hereby authorized and directed to issue
warrants upon the village and payable by the village to the holders
and owners, payable in installments each of the amounts to be in
one, two, three, four and five years, to bear interest at the rate
of six percent per annum from the date of the allowance by the
commission or referees, and said Mayor and Council of the Village
of Guthrie shall levy a tax upon the property of the residents of
said village to pay the warrants herein referred to, levying same
upon each subdivision heretofore constituting Guthrie, East
Guthrie, West Guthrie, and Capitol Hill according to the amount of
indebtedness created by the city councils, the mayors and school
boards heretofore acting for and in behalf of the people resident
of said cities. Each of said cities to be liable for and taxable
under this act for the amount of indebtedness created by them."
