While this Court is not bound by the construction placed by the
state court upon statutes of that state when the impairment of
contract clause of the Constitution is invoked, yet, when the true
construction of a particular statute is not free from doubt
considering former legislation of the state upon the same subject,
this Court feels that it will best perform its duty in such case by
following the decisions of the state court upon the precise
question, although doubts as to its correctness may have been
uttered by the same court in some subsequent case.
By the Laws of Texas of 1883, c. 58, as amended by the Laws of
1885, c. 12, p. 13, a purchaser was bound to pay the notes given in
payment for public land as they matured, and it was the duty of the
commissioner to issue a patent for the land on payment of the notes
and interest. In November, 1885, the laws of Texas did not give the
state the right to forfeit lands for nonpayment of installments due
from purchasers, although at various periods prior thereto there
had been provisions in the law to that effect. In 1897 and 1895,
laws were enacted providing for forfeiture in case of such
nonpayment, but giving the purchaser the right to be heard in a
court of justice pursuant to certain forms of procedure prescribed
in the law upon the question of whether he was actually in
default.
Held, as to a purchaser of lands in 1885 (after the
passage of the act of that year) and who from 1893 to December,
1897 (after the passage of the act of that year), had failed to
make any of the payments due under his contract, that the act of
1897 was not repugnant to the federal Constitution on the ground
that it impaired the obligation of the contract, as there was no
promise expressed in the legislation existing when the land was
purchased to the effect that the state would not enlarge the remedy
or grant another on account of the violation by the purchaser of
his contract, and no such promise late be implied. There is a plain
distinction between the obligation of a contract and a remedy given
by the legislature to enforce that obligation.
The plaintiff in error brought his action against the defendant
in error in a district court of Texas to recover as owner certain
land described in his petition, and of which he alleged the
defendant to be in possession. The defendant denied the
Page 188 U. S. 596
averments of the petition, and upon the trial, judgment was
given in his favor and he was adjudged to be the owner of the land.
An appeal was taken to the court of civil appeals of Texas, where
the judgment was affirmed, and upon application to the supreme
court of the state for a writ of error, the application was denied.
The plaintiff then sued out a writ of error from this Court to the
court of civil appeals, and the record has been brought here for
review.
The plaintiff in error alleges the existence of a contract with
the State of Texas, the obligations of which he asserts have been
impaired by subsequent legislation in that state. The case involves
an inquiry into some of the legislation of the state in regard to
its public lands, providing for their sale and for the application
of the proceeds of such sales for the benefit of its public schools
and for other public purposes.
The state has been and is the owner of a large amount of public
lands, portions of which it has put upon the market for sale from
time to time, under different acts of its legislature, which acts
have provided a general system for the sale or leasing of such
lands and for the disposition of the proceeds arising therefrom.
Among others the legislature passed the act of 1879, chap. 28, Laws
of that year, p. 23. That act provided in detail for the sale of
certain public lands and the terms and conditions upon which the
sales were to be made and patents therefor granted. The twelfth
section provided that, upon a failure of the purchaser to pay the
purchase money as agreed upon, it should be the duty of the
district attorney to cause a writ to be issued to show cause why
the purchaser should not be ejected from the land, and upon his
failure to show such cause, a judgment was to be rendered against
him and a writ of possession issued in favor of the state. In 1881,
the act was amended in immaterial matters.
By chapter 88 of the Laws of 1883, p. 85, another general system
for the sale of the public lands for the benefit of the public
school system, etc., was enacted, the ninth and tenth sections of
which provided for payment of installments of principal and
interest, and in case of failure to pay, the lands were
Page 188 U. S. 597
to be entered as "lands forfeited," without any judicial
inquiry. This act provided that the interest on the obligations
given by the purchaser of the lands should be payable on the first
of March in each year. Subsequently by chapter 12 of the Laws of
1885, p. 13, approved February 16, 1885, the ninth and tenth
sections of the act of 1883 were amended, the right of forfeiture
of the land being still retained, only there was an extension of
the time for payment of interest from the first of March to the
first of August in each year before the forfeiture could be
asserted. In one week after the passage of the act last named, the
same legislature passed an act, approved February 23, 1885, Laws of
Texas, 1885, p. 18, by which it was enacted
"that the failure of a holder of public free school, university,
or asylum land under contract of purchase from the state to make
the annual payments of principal or interest thereon prior to the
first day of August after the same becomes due shall not cause a
forfeiture of the rights of such holder in such land."
By this act, it is claimed that all laws providing for
forfeitures of land because of nonpayment of installments of
principal or interest prior to August first after the same became
due were repealed, and while the law thus stood, the plaintiff in
error's grantor purchased the land in controversy.
By chapter 99 of the Laws of 1887, page 83, a further provision
for the sale or leasing of public lands was made. Section 11, page
86, restored the provisions as to forfeiture without resort to
judicial proceedings, and by chapter 47, Laws of 1895, section 11,
as well as by chapter 37, Laws of 1897, page 39, approved March 25
and taking effect August 20, 1897, further provision was made in
regard to forfeitures without a resort to the courts. It was under
the act of 1897 that the forfeiture herein was asserted, and the
first section, the only material one here, is set forth in the
margin.
*
Page 188 U. S. 598
D. B. Phillips, under the act of 1883, as amended by the act of
February 16, 1885, and modified by the act of February 23, 1885,
made application to purchase the land in question on the 30th of
October, 1885, and the land was duly awarded him in November of
that year. The plaintiff in error, by proper transfers and deeds,
has become the vendee, or grantee through others, of Phillips, and
represents all the rights that the latter or his grantees had with
regard to the premises in controversy.
Phillips, or those claiming under him, paid the interest on the
purchase money up to January 1, 1893, and no interest was
thereafter paid. The land was forfeited for nonpayment of interest
since 1893, by the commissioner of the general land office, without
any judicial procedure or suit in court, on August 20, 1897, the
day the act of 1897 took effect. In answer to a certified question
from the court of civil appeals, the supreme court of the state
held in this case that the state had the right to so forfeit the
lands by virtue of that act.
Some time after August 20, 1897, namely on December 16
Page 188 U. S. 599
in that year, plaintiff, through his agent, tendered the state
treasurer $286.95 to pay up all accrued interest due on the land
purchased by Phillips, and on the last-named date, through his
agent, he asked the reinstating of the account of Phillips, and
forwarded to the commissioner of the general land office the
transfers or deeds, or copies of the same, showing the chain of
title from Phillips to himself, and these transfers were filed by
the commissioner in his office, but he refused to reinstate as
demanded, on the ground that the rights of the defendant Flack had
intervened. Flack, prior to this tender and demand, and on November
17, 1897, made his application in due form to purchase the land.
His application was on that day accepted, and his obligation to pay
the purchase money was received, and thereafter, in March, 1898,
the land was awarded him on his application of the previous
November. On August 13, 1898, after this suit was brought, the
plaintiff in error, through his attorney, again made written
application to have the Phillips account for the purchase of the
land reinstated, and for this purpose tendered to the state
treasurer of Texas, to pay the interest in arrear, the sum of
$345.25, which application was rejected on the ground of the
intervening rights of the defendant Flack.
MR. JUSTICE PECKHAM, after making the foregoing statement of
facts, delivered the opinion of the Court.
Referring to the facts in this case, it is seen that the
question arising is as to the right of the state to proceed under
the act of 1897 to forfeit the lands held by the plaintiff in error
for nonpayment of interest.
At the time when the land was purchased by Phillips, in
November, 1885, the Act of 1883 as amended by the Act of February
16, 1885, was in force, excepting, it is said, that the Act of
February 23, 1885, repealed the provisions in regard to
Page 188 U. S. 600
forfeiture which existed in the prior acts of 1879, 1883, and
1885, so that, when Phillips purchased, the state had no right to
forfeit the lands, as had theretofore been provided by law.
The Attorney General of Texas, in his brief filed herein, now
argues that the Act of February 23, 1885, did not unqualifiedly
repeal the law in regard to forfeiture as theretofore existing, but
simply regulated it so as to place on the same terms those who had
purchased lands under the Act of 1879 and those purchasing under
the Act of 1883 as amended by the Act of February 16, 1885, so that
no forfeiture could be claimed under any act until after August 1
in any year. As the Act of 1879 made the interest payable on the
first of March in each year, and the subsequent acts extended the
time for the payment of the moneys for lands sold under their
authority to the first of August, it is contended that the purpose
and effect of the Act of 1885 were to place the purchasers of lands
under all acts upon the same footing as to the time for the payment
of interest. This was in substance held by the court of civil
appeals of Texas in 1892 in
Berrendo Stock Co. v. McCarty,
20 S.W. 933. The case was, however, reversed in the supreme court
in 1893, 85 Tex. 412, and that court, in 1891, in
Culbertson v.
Blanchard, 79 Tex. 486, 493, had also held the same principle
it announced in the
Berrendo case.
It is true that
Anderson v. Waco State Bank, 86 Tex.
618, and
Fristoe v. Blum, 92 Tex. 76, 85, throw some doubt
upon the correctness of the former decisions of the supreme court
in this respect, but we do not feel here called upon to construe
the state statute otherwise than it has been construed up to this
time by the court of last resort of the state.
Although this case involves the question of an impairment of an
alleged contract by subsequent legislation, and we are not
therefore bound by the construction which the state court places
upon the statutes of the state which are involved in such an
inquiry, yet, as the true construction of the particular statute is
not free from doubt, considering the former legislation of the
state upon the same subject, we feel that we shall best perform our
duty in such case by following the decision of the state court upon
the precise question, although doubts as to its correctness
Page 188 U. S. 601
may have been uttered by the same court in some subsequent case.
Wilson v. Standefer, 184 U. S. 399,
184 U. S.
412.
We come, then, to the question of what was the contract, and
whether it has been impaired by virtue of the enactment of the
statute of 1897, under which the forfeiture has been enforced?
Although not material, it may yet be observed that the Act of 1897
is not the first act which was passed subsequently to the Act of
1885, reinstating the provisions for a forfeiture. By section 11 of
the Act of 1887 (Laws 1887, pp. 83, 86), provision was again made
for forfeiting the lands on nonpayment of moneys due, and the same
was continued by section 11 of the Laws of Texas of 1895, pp. 63,
67.
We assume that, at the time these lands were purchased by
Phillips, no statute existed providing for forfeiture by entry on
the books of the state commissioner of the general land office, and
it is admitted that only by virtue of the Act of 1897 can the state
now claim the right to forfeit the lands by an entry to that effect
on the account kept with the purchaser, because of the failure to
pay the interest since 1893. The plaintiff in error asserts that
the statute of 1897, reinstating or providing for the right of the
state to thus forfeit the lands for nonpayment of moneys due by the
purchaser of land, is an impairment of the contract created between
the state and Phillips at the time his application for the land was
granted by the state authorities, and the plaintiff in error
asserts he has succeeded to all the rights of Phillips, and this is
not denied.
We must first decide what were the obligations of the contract
which was created by the granting of Phillips' application for the
purchase of this land and the taking of his notes therefor. The
Laws of Texas of 1883, chapter 58, as amended by chapter 12, page
13, Laws of 1885, furnish the evidence of the obligations of the
contract. By those acts, it was made the duty of the commissioner
of the general land office, after an application for a grant of
land had been made and approved, to issue a patent to the purchaser
or his assigns, etc., upon payment of all the purchase money and
interest upon notes given for the purchase of the land, and
provision was made for the giving of the notes or other evidences
of the obligation of the purchaser
Page 188 U. S. 602
to pay for the land. His obligation was to pay these notes as
they matured. The obligation of the state was to give the patent as
mentioned. What particular remedy then existed by which the state
might enforce the obligations of the contract made by the purchaser
is not material in this aspect of the case. It is true that the
remedy for the enforcement of a contract sometimes enters into the
contract itself, but that is where an endeavor has been made to so
change the existing remedy that there is no effective and
enforceable one left, or the remedy is so far impaired that the
party desirous of enforcing the contract is left practically
without any efficient means of doing so; but in the case of an
alteration of a remedy, if one is left or provided which is fairly
sufficient, the obligations of a contract are not impaired,
although the remedies existing at the time it was entered into are
taken away.
It appears in the record that the plaintiff in error, or those
he represents, failed for years to comply with the obligations of
the contract, and failed to pay the interest as it became due, as
they promised, and hence the contract was violated.
The question, then, is what is the remedy against the party who
has broken the contract? The statute of 1897 is turned to for the
authority to take possession of the land, the right to keep which
the plaintiff in error has ceased to retain because of his failure
to do that upon which such right was founded.
The plaintiff in error, however, says to the state: you cannot
avail yourself of the remedy provided by the Act of 1897, because
it did not exist when I purchased the land, and you then contracted
not to create any such remedy against me, and the evidence of the
contract is to be found in the statute of February 23, 1885, which
was in force when I purchased. But the answer is that, although at
the time Phillips purchased the land a statute had taken away the
remedy by way of forfeiture as therein stated, yet the act taking
away the remedy did not constitute a contract on the part of the
state with all who purchased lands from it at that time that it
would never pass any other act by which the state might be
empowered through its agents to forfeit the lands and take
possession thereof by virtue of such forfeiture. The Act of
February 23, 1885, was a mere
Page 188 U. S. 603
enactment, declaring the law to be as therein stated, upon the
subject of a remedy for a violation by a purchaser of the
obligations of his contract, and it did not assume to bind the
hands of any future legislature that might think proper to deal
with the subject. There was no promise or contract expressed in the
statute that the state would not enlarge the remedy or grant
another on account of the purchaser's violation of his contract,
and we think no such contract is to be implied.
A purchaser of lands at the time Phillips purchased had no right
to assume that the state would not alter the law in the future so
far as to give it another and better or a quicker remedy for a
violation of his contract by the purchaser than existed at the time
the purchase was made. To enact laws providing remedies for a
violation of contracts, to alter or enlarge those remedies from
time to time as to the legislature may seem appropriate, is an
exercise of sovereignty, and it cannot be supposed that the state,
in a case like this, contracts, in a public Act of its legislature,
to limit its power in the future, even if it could do so, with or
without consideration, unless the language of the act is so
absolutely plain and unambiguous as to leave no room for doubt that
its true meaning amounts to a contract by it to part with its power
to increase the effectiveness of existing remedies as against those
who purchase lands while the act remains alive. No such language is
to be found in the act in question, and none ought to be
implied.
We cannot discern the difference in principle between this case
and that of
Wilson v. Standefer, 184 U.
S. 399, which involved a portion of this same
legislation. In that case, the lands were purchased under the Act
of 1879, which provided (section 12) for a forfeiture after
judicial inquiry determining the failure of the purchaser to pay
the annual installments of interest as they became due.
Subsequently, the Act of 1897, already mentioned, was passed, and
that act, it is seen, authorized the commissioner, when any portion
of the interest due by the purchaser had not been paid, to declare
a forfeiture of the purchase without judicial aid, and it gave to
his action the effect of putting an end to the contract. It was
under the Act of 1897 that the forfeiture was declared in that
case. There, as here, it was contended
Page 188 U. S. 604
that the Act of 1897 violated the contract between the parties.
It was urged that, as the Act of 1879 provided a remedy by a resort
to judicial proceedings for the purpose of enforcing a forfeiture,
that such remedy was a part of the contract, and that the Act of
1897, which provided for a forfeiture of the lands without judicial
action, was a violation of the contract, and therefore void. This
Court held that the stipulation in the twelfth section of the Act
of 1879 providing for a judicial forfeiture did not amount in legal
contemplation to a promise by the state that the only remedy which
might thereafter be resorted to by it was the one therein provided
for. The court recognized the plain distinction between the
obligation of a contract and a remedy given by the legislature to
enforce that obligation, and it held that the remedy might be
modified and enlarged without impairing such obligation.
It is to be noted that the Act of 1897 does not take away from
the purchaser the right to be heard in a court of justice upon the
question whether he in fact is in default in his payments of the
obligations given by him for the land which he purchased. The Act
of 1897 grants the purchaser six months after the land commissioner
has indorsed on the purchaser's obligation for payment for the
land, the words "Lands forfeited," within which the purchaser may
institute suit in the district court of Travis County, Texas,
against the commissioner for the purpose of contesting the
forfeiture and setting aside the same, upon the ground that the
facts do not exist authorizing such forfeiture.
Neither Phillips nor any of the successors to his title availed
themselves of the opportunity to be judicially heard afforded by
the law of 1897, and, as stated by the court in
Wilson v.
Standefer, 184 U. S. 399,
184 U. S. 415,
the reason clearly appears in the admitted facts that the payments
were in arrear for a considerable period of time, and that the
tender made, if it ever had any legal effect at any time, was
manifestly too late after the state had declared a forfeiture and
sold the land to another.
We cannot see any difference in principle between a case where
an act was in existence when a contract was made, providing a
certain remedy for a violation of the contract, and
Page 188 U. S. 605
then, after the contract is entered into, the legislature passes
another act, giving an altogether different remedy, as in
Wilson v. Standefer, 184 U. S. 399, and
a case where an act which denied the remedy of forfeiture when the
contract was made, was repealed by a subsequent enactment which
provided a forfeiture as a remedy. In both cases, there is a plain
alteration of remedy, while in neither is there any contract
springing from the passage of the first act that no other remedy
more effective should be given as against one who purchased land
during the existence of the statute. The right to rescind the
contract on the part of the state, upon the failure of the
purchaser to pay as he had agreed, resided in the state at common
law, as the Supreme Court of Texas has held.
Fristoe v.
Blum, 92 Tex. 76, 84. The Act of 1897 simply provided a
particular means by which such right might be enforced.
We are of opinion that the Act of 1897 does not impair the
obligation of any contract within the meaning of the federal
Constitution, as asserted by the plaintiff in error, and the
judgment of the Court of Civil Appeals of Texas is therefore
affirmed.
MR. JUSTICE BREWER concurred in the result.
*
"SEC. 1.
Be it enacted by the legislature of the State of
Texas that if upon the first day of November of any year, any
portion of the interest due by any person to the State of Texas for
lands heretofore sold by the State of Texas, whether said lands be
a part of the public domain or shall have been heretofore set apart
for the public schools, university, or any of the other various
state institutions, has not been paid, it shall be the duty of the
land commissioner to indorse on the obligation for said lands,
'lands forfeited,' and shall cause an entry to that effect to be
made on the account kept with such purchaser, and thereupon said
land shall thereby be forfeited to the state, without the necessity
of reentry or judicial ascertainment, and shall revert to the
particular fund to which it originally belonged, and be resold
under the provisions of the existing law, or any future law:
Provided, The purchaser of said land shall have the right
at any time within six months after such indorsement of 'lands
forfeited,' to institute a suit in district court of Travis County,
Texas, against the commissioner of the general land office, for the
purpose of contesting such forfeiture and setting aside the same,
upon the ground that the facts did not exist authorizing such
forfeiture, but if no such suit has been instituted as above
provided, such forfeiture of the commissioner of the general land
office shall then become fixed and conclusive:
Provided,
That if any purchaser shall die, or shall have died, his heirs or
legal representatives shall have one year in which to make payment
after the first day of November next after such death."
"This act is cumulative, and is not intended to deny to the
state the right to institute any legal proceedings that may be
deemed necessary to secure the purchase money or possession of the
land so sold. And this act is intended to be applicable to all
purchases heretofore made under any or all of the various acts of
the legislature under which land may have been sold by the
state."
