Even if the state court erred in a proceeding over which it has
exclusive jurisdiction, such error would not afford a basis for
reviewing its judgment in this Court.
The mere assertion by plaintiff in error that the judgment of
the state court deprived him of his property by unequal enforcement
of the law in violation of federal immunities specially set up does
not create a federal question where there is no ground for such a
contention, and the state court followed its conception of the
rules of pleading as expounded in its previous decisions.
Where the asserted federal questions are so plainly devoid of
merit as not to constitute a basis for the writ of error, the writ
will be dismissed.
Whether a Missouri corporation has forfeited its charter by
nonuser and misuser under the law of the state does not involve a
federal question, and a proceeding regularly brought by the
Attorney General in the
Page 210 U. S. 325
nature of
quo warranto constitutes due process of law.
New Orleans Waterworks v. Louisiana, 185 U.
S. 336.
Writ of error to review 200 Mo. 34 dismissed.
The plaintiff in error was organized as a corporation under the
laws of the State of Missouri on January 18, 1901, for the
following purposes, stated in its articles of association:
"The purposes for which this corporation is formed are to
encourage and promote agriculture and the improvement of stock,
particularly running, trotting, and pacing horses, by giving
exhibitions of agricultural products and exhibitions of contests of
speed and races between horses, for premiums, purses, and other
awards and otherwise; to establish and maintain suitable fair
grounds and a race track in the City and County of St. Louis, with
necessary buildings, erections, and improvements, and to give or
conduct on said grounds and race track public exhibitions of
agricultural products and stock, and of speed or races between
horses, for premiums, purses, or other awards, made up from fees or
otherwise, and to charge the public for admission thereto and to
said grounds and track; to engage in pool selling, bookmaking, and
registering bets on exhibition of speed or races at the said
racetrack and premises, as provided by law, and to let the right to
others to do the same; to conduct restaurants, cafes, and other
stands for the sale of food and other refreshments to persons on
said premises, and to do and perform all other acts necessary for
fully accomplishing the purposes hereinbefore specifically
enumerated."
In 1905, the Attorney General of Missouri,
ex officio,
filed in the Supreme Court of the State of Missouri an information,
in the nature of
quo warranto, seeking to annul the
charter of the company and forfeit all of its franchises and
property for the following alleged acts of abuse and nonuse of its
corporate powers and franchises: first, engaging in bookmaking,
pool selling, and the registration of bets upon horse races, from
the date of its incorporation up to June 16, 1905; second, during
the same period selling pools and accepting and registering
Page 210 U. S. 326
bets from minors upon the result of horse races run on the track
of the corporation; third, engaging in bookmaking, pool selling,
and the registration of bets upon horse races after June 16, 1905,
in violation of an Act of the Legislature of Missouri approved
March 21, 1905, and fourth, failure to give any exhibition of
agricultural products, or to give any exhibition of speed in races
between horses for the purposes of improving the stock of trotting
and pacing horses, or to establish or maintain any fair grounds in
the City or County of St. Louis, or any other place.
The corporation demurred to the information upon nine grounds.
In the first, it was recited that, as the information did not
charge that the defendant was not licensed to engage in the
business of bookmaking, etc., alleged to have been carried on prior
to June 16, 1905, no violation of law was stated. The remaining
grounds set forth reasons why it was asserted that the information
in the second and third grounds, heretofore stated, did not charge
violations of law or state facts upon which a judgment of ouster
for such alleged acts could lawfully be based. After hearing
argument, the Supreme Court of Missouri sustained the first ground
of demurrer and overruled all the others, and granted defendant
fifteen days in which to answer the remaining allegations contained
in the information,
viz., the second, third, and fourth
grounds of alleged misuse and nonuse of the corporate franchises,
heretofore referred to. 200 Mo. 34. Subsequently an answer was
filed, of which (omitting title) a copy is in the margin.
*
Page 210 U. S. 327
Thereupon a motion for a final judgment of ouster, etc., on the
pleadings, was filed, for the following reasons:
"First. That said return and answer fails to state facts showing
any sufficient cause or excuse for, or any legal defense to, the
nonuser of respondent's franchises, authorizing it to give
exhibitions of agricultural products and exhibition of contests of
speed or races between horses for the purpose of encouraging and
promoting agriculture and the improvement of stock, and for the
establishing and maintaining of suitable fair grounds in the city
and county of St. Louis, as set forth and charged in the
information herein."
"Second. It appears from the facts stated in said return and
answer, and the second count thereof, that respondent is guilty of
the acts of misuser and abuser of its franchises charged in the
information herein filed, in this; to-wit, that respondent engaged
in the business of bookmaking and pool selling, registration of
bets, and the acceptance of bets, in violation of the laws of this
state:"
"Wherefore, informant prays that final judgment of ouster be
rendered against the respondent, as prayed for in the information
in the case."
A motion to strike from the files having been overruled, the
motion was heard and granted, and judgment of ouster was entered, a
fine of $5,000 was imposed upon the corporation because of nonuse,
misuse, and violation of its franchises, and provision was made for
the winding up of the affairs of the corporation. A motion for a
rehearing was
Page 210 U. S. 328
made, in which the protection of various clauses of the
Constitution of the United States was invoked, the following only
being material to the controversy arising on this record:
"Third. Respondent is charged with nonuse of its corporate
franchise as to the right to hold fairs. The general denial of
respondent applies to this charge, and there has been no trial as
to that fact. Yet the judgment adjudges the respondent guilty
without a hearing, thereby also violating the Fourteenth Amendment
to the Constitution of the United States."
"But without this, the plea of estoppel interposed by the
respondent to the charge of nonuse does not deprive respondent of
the benefit of its general denial of that charge. Even at common
law, and certainly since the statute of Anne, a plea of estoppel
may be united with a general denial in a
quo warranto
proceeding."
"Fifth. The judgment of ouster ought not to be entered in this
case in the present state of the pleadings for the reason that,
even though the power conferred by the charter of the respondent to
engage in bookmaking and pool selling be regarded as taken away by
the repeal of the breeder's law, and even though respondent has
lost its charter privileges to conduct
Page 210 U. S. 329
fairs by failure to exercise those privileges, nevertheless,
respondent has other privileges, conferred by its charter which are
not contrary to any law of this state or to the policy of the
state, and which have not been lost by nonuser, among which
privileges is the right to conduct horse races for prizes or purses
or at pleasure, and which the judgment of this court deprives
respondent of without respondent having, in any manner, lost the
right so to do, and in this respect, also, the judgment deprives
the respondent of its property without due process of law, contrary
to the guarantees of the Fourteenth Amendment to the Constitution
of the United States, which respondent here invokes."
The motion for a rehearing was granted, and, upon a
reconsideration of the cause, the motion for judgment on the
pleadings was again sustained upon the ground of nonuser of the
corporation franchises, and judgment was entered ousting the
corporation of all of its franchises and charter rights, and
adjudging that the same be forfeited to the state, and the
corporation dissolved, 200 Mo. 34. A motion for a rehearing having
been filed and overruled, the cause was brought here by writ of
error.
Page 210 U. S. 332
MR. JUSTICE WHITE after making the foregoing statement,
delivered the opinion of the Court.
Soon after the filing of the record in this Court, the Attorney
General of Missouri submitted a motion to dismiss the writ of
error, or to affirm, and the determination of the motion was
postponed until the hearing on the merits. The cause having
been
Page 210 U. S. 333
argued, the motion to dismiss or affirm must now be disposed
of.
We are of opinion that the record does not present any federal
question, and that the motion to dismiss must be granted.
The Supreme Court of Missouri, in the opinion delivered by it on
the rehearing, considered three propositions: First, the effect of
the general denial, contained in the first paragraph, and the plea
embodied in the second numbered paragraph of the answer; second,
upon what grounds a forfeiture of a corporate franchise might be
declared; and, third, whether or not, in addition to ousting the
corporation from its franchises, the court could and should
"appropriate a part of its substance to the use and benefit of the
state." These propositions were determined after an elaborate
consideration of the subject and a review of many authorities. It
was decided that the plea following the general denial in the
answer amounted to a plea of confession and avoidance; that, in
consequence, the general denial first pleaded raised no issue, and
hence "the motion for judgment upon the ground of nonuser should be
sustained." It was next determined, after declaring that it was the
duty of the court to act with great caution in decreeing a
forfeiture, that forfeiture of the corporate franchises might be
declared
"where there is either willful misuse or willful nonuse of the
franchise or franchises, which are of the essence of the contract
with the state, and those in which the state or public is most
interested, then a forfeiture of the whole charter should be and
will be declared. When a corporation receives from the state a
charter granting certain franchises or rights, there is at least an
implied or tacit agreement that it will use the franchises thus
granted; that it will use no others, and that it will not misuse
those granted. A failure in any substantial particular entitles the
state to come in and claim her own, the rights theretofore granted,
and this through a judgment of forfeiture in a proceeding like the
one at bar."
On this branch of the case, the court concluded as follows:
Page 210 U. S. 334
"The right to construct and maintain suitable fair grounds in
the City and County of St. Louis, and to give exhibitions of
agricultural products thereat, is one of the essence of this
contract between the state and the respondent. It was and is the
franchise in the exercise of which the state and general public
have the most interest and concern. A failure to exercise this
franchise was a failure to perform the very thing which was of the
essence of the contract. That this failure was willful is shown by
the length of time of the admitted nonuser as well as by other
things made apparent by the pleadings. So far as the state and
general public are concerned, this right or franchise, so long
neglected, was leading and uppermost in interest. No legal excuse
is offered for respondent's failure. It would appear at least by
inferences deducible from the pleadings that respondent was alert
in promoting that incidental feature of its charter -- gambling
upon horse races, and furnishing its gamblers with refreshments,
both liquid and solid -- but extremely indifferent as to doing the
things, moral in character, which it had, by receiving its charter,
tacitly agreed to do, and the only things in which the state and
the public had any special interest."
"Such a flagrant and willful nonuser of franchises which are of
the very essence of the grant demand, in our judgment, the
forfeiture of all the rights and franchises granted, and we
therefore hold that there shall be a judgment decreeing a
forfeiture of all the rights and franchises granted to respondent
by its charter, and a dissolution of said corporation."
As to the third proposition, the court was of opinion that no
further fine or punishment than that of ouster should be
inflicted.
In substance, the contention of plaintiff in error is that the
plea contained in the second paragraph of the answer merely
presented a question of estoppel, which did not waive the prior
general denial, and that the judgment of the Supreme Court of
Missouri destroyed,
"without a trial or a hearing, and by an unequal and unjust
enforcement of the law, vested property
Page 210 U. S. 335
rights, both of plaintiff in error and its stockholders, in the
face of federal immunities which the record shows to have been
specially set up and claimed."
In effect, this is but asserting that the judgment of the
Supreme Court of Missouri was so plainly arbitrary and contrary to
law as to be an act of mere spoliation. But we fail to perceive the
slightest semblance of ground for such a contention. In determining
the scope and effect of the allegations of the answer, and in
reaching the conclusion that the charges of nonuser contained in
the information stood as confessed under the pleadings, the Supreme
Court of Missouri followed its conception of the rules of pleading,
as expounded in many of the previous decisions of that court, and
the question of the extent of the power to take from the
corporation its charter grant of franchises was determined as a
question of general law. The determination of those matters did not
involve a federal question.
San Francisco v. Itsell,
133 U. S. 65.
Manifestly, the proceeding constituted due process.
Caldwell v.
Texas, 137 U. S. 692;
New Orleans Waterworks Co. v. Louisiana (where the subject
of the power of a state to forfeit corporate franchises is
considered),
185 U. S. 336,
185 U. S. 344.
And if the fact was, which we do not intimate is the case, that the
court below erred in the conclusions reached by it in respect to
the propositions which it determined, the error would not afford a
basis for reviewing its judgment in this Court.
Central Land
Co. v. Laidley, 159 U. S. 103,
159 U. S. 112,
and cases cited;
Ballard v. Hunter, 204 U.
S. 241,
204 U. S. 259;
Patterson v. Colorado, 205 U. S.
460.
The asserted federal questions were so plainly devoid of merit
as not to constitute a basis for the writ of error (
Wilson v.
North Carolina, 169 U. S. 586,
169 U. S.
595), and the writ of error is therefore
Dismissed.
*
"I. Respondent, Delmar Jockey Club, comes by its attorneys, and,
for its answer to the information of the Attorney General herein,
admits that it is a corporation duly organized and incorporated
under the laws of the State of Missouri, and denies each and every
other allegation in said information alleged or contained."
"Wherefore, respondent prays that it be hence discharged with
its costs."
"II. For its further answer to that portion of the information
of the Attorney General herein wherein it is alleged that
respondent has failed to exercise certain franchises claimed to be
possessed by it, this respondent states that it has fully carried
out and exercised all those provisions in its charter authorizing
it to give exhibitions of agricultural products and exhibitions of
contests of speed and races between horses for the purpose of
encouraging and promoting agriculture and the improvement of stock,
and has provided suitable fair grounds for the same, in this: that
between the eighteenth day of January, 1901, and the sixteenth day
of June, 1905, in pursuance of the provisions and requirements of
§§ 7419 to 7424, inclusive, Revised Statutes of Missouri,
1899, respondent duly paid large sums of money into the Treasury of
the State of Missouri, which were placed by the Treasurer of the
State of Missouri to the credit of the state fair fund, the same
being a fund created by § 7424, Revised Statutes of Missouri,
1899 for the development and advancement of the industrial
interests of this state under the direction of the State Board of
Agriculture, and that all of said money so paid into said fund was
received, used, and appropriated by the State of Missouri for the
purpose of holding and giving annual exhibitions of agricultural
products and stock of every kind and description at the City of
Sedalia, State of Missouri, and that the said sums of money paid by
respondent into the Treasury of the State of Missouri under the
terms of §§ 7419 to 7424, inclusive, were used and
appropriated by the said State of Missouri and its said State Board
of Agriculture solely for the maintenance and support of said
Missouri State Fair held annually at Sedalia, Missouri, and for the
further purpose of providing, constructing, improving, and
equipping all grounds, stands, and buildings necessary for the
holding and giving of said fair"
Respondent further states that, by exacting and receiving the
said sums of money for the above-mentioned purposes, the said State
of Missouri intended to and did accept the same as full and
complete performance and use by respondent of its franchise to give
exhibitions of agricultural products and stock, and the said State
of Missouri thereby intended to and did waive any other or further
exercise of such franchise on the part of respondent.
Further answering the allegations of nonuser from June 16, 1905,
to the date of the filing of this information, to-wit, July 28,
1905, respondent states that the franchise of giving exhibitions of
agricultural products and stocks is not one which can be exercised
continuously and at all times, from the beginning to the end of the
year, but is one, owing to its peculiar character, which can only
be exercised during the harvest season of each year. For these
reasons, respondent was not required to exercise such franchise
between the above specified dates, but respondent further avers
that it has, in good faith, endeavored at all times to exercise the
franchises granted to it by its articles of incorporation in the
manner and for the purposes intended by such grants, and that such
is its purpose in the future, and respondent intends in every way
to comply with and perform, according to law, all the obligations
which it assumed upon the grant of the aforesaid franchises to it
by the State of Missouri, and respondent again specifically denies
each and every charge, allegation, or assertion of a contrary
purpose on its part, contained in the information filed herein.
Wherefore, respondent prays that it be hence discharged with its
costs.
