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ousted of its jurisdiction and the judiciary set in its place. When a State submits itself, without reservation, to the jurisdiction of a court in a particular case, that jurisdiction may be used to give full effect to what the State has by its act of submission allowed to be done ; and if the law permits coercion of the public officers to enforce any judgment that may be rendered, then such coercion may be employed for that purpose. But this is very far from authorizing the courts, when a State cannot be sued, to set up its jurisdiction over the officers in charge of the public moneys, so as to control them as against the political power in their administration of the finances of the State. In our opinion, to grant the relief asked for in either of these cases would be to exercise such a power.
MR. JUSTICE FIELD and MR. JUSTICE HARLAN dissented.
MR. JUSTICE FIELD. I am not able to concur in the judgment in these cases, and I will briefly state my reasons.
I admit that the rule of the common law that the sovereign cannot be held amenable to process in his own courts without his consent, is applied in this country to the State, under which designation are included the people within its territorial limits, in whom resides whatever sovereignty the State possesses. But they act and speak in this country, at least in times of peace, only through the Constitution and laws. For their will we must look to these manifestations of it. If in that way they consent to suits, either directly against themselves by name or against any of their authorized agents, there can be no reasons of policy or of law against issuing process in proper cases to bring them or their agents before the court. And if in that way, that is, by their Constitution or laws, they direct their officers to do or omit certain things, in the doing or omission of which individuals are interested, and they provide appropriate remedies to compel or enjoin the performance of those things, there can be no reason why such remedies should not be resorted to when private rights are involved.
And such is the case with respect to the subjects of the
present suits. The State of Louisiana entered into certain engagements with her creditors; she embodied them in the most solemn form in a statute and in her organic law; she provided for the levying of a tax to pay those creditors; she prescribed certain duties for designated officers to perform in its collection and disbursement; she made it a felony for those officers to divert the fund thus raised to other
she declared that no further legislation should be necessary for the collection of the tax or the appropriation of the proceeds, and that for the collection and payment of the tax the judicial power of the State should be exercised when necessary. The plaintiffs in these suits seek the enforcement of these engagements; and they are resisted merely because the engagements are repudiated by the State; and this court holds that it has no power to stay the repudiation.
That the character and object of these suits may more clearly appear, I will briefly give the history of the action of the State. Prior to 1874 Louisiana had contracted an indebtedness amounting to about eighteen millions of dollars. She asserted that a large portion of it had been fraudulently contracted; while the holders contended that their claims were valid and that she was legally and equitably bound therefor. Under these circumstances, and with a view to determine the conflicting claims of the parties, and to liquidate and settle her indebtedness, she proposed to issue new bonds for sixty per cent of the alleged indebtedness, upon the surrender of the claims; and, to induce the surrender, offered to make various enactments to secure the principal and interest of the new bonds. In 1874 she passed an act, known as act No. 3 of the laws of that year, entitled “ An Act to provide for funding obligations of the State by exchange for bonds; to provide for principal and interest of said bonds; to establish a board of liquidation ; to authorize certain judicial proceedings against it; to define and punish violations of this act; to prohibit certain officers diverting funds, except as provided by law, and to punish violations therefor; to levy a continuing tax and provide a continuing appropriation for said bonds; to make a contract between the State and holders of said bonds; to prohibit injunctions in certain cases; to limit the indebtedness of the
State and to limit State taxes; to annul certain grants of State aid ; to prohibit the modification, novation, or extension of any contract heretofore made for State aid ; to provide for the receipt of certain warrants for certain taxes ; and to repeal all conflicting laws.”
By this act the governor, lieutenant-governor, auditor, treasurer, secretary of state, and speaker of the House of Representatives, and a seventh person to be selected by them, called a fiscal agent, were constituted a board of liquidation, and were authorized to issue bonds of the State, to be called consolidation bonds, payable in forty years, with interest at seven per cent, and to exchange them for valid outstanding bonds and auditor's warrants at the rate of sixty cents on the dollar. The interest was to be payable semi-annually, on the first of January and July of each year; and for it coupons were to be annexed to the bonds.
The act levied an annual tax of five and a half mills on the dollar of the assessed value of all real and personal property in the State, and declared that it should be collected for the purpose of paying the principal and interest of the consolidated bonds, and that the revenue derived therefrom was thereby “set apart and appropriated for that purpose, and no other,” and that it should be a felony for the fiscal agent or any officer of the State or of the board of liquidation to divert the fund from its legitimate channel. It also declared that this tax, which is called an interest tax, “shall be a continuing annual tax until the said consolidated bonds shall be paid or redeemed, principal and interest; and the said appropriation shall be a continuing annual appropriation during the same period, and this levy and appropriation shall authorize and make it the duty of the auditor and treasurer, and the said board respectively, to collect said tax annually, and pay said interest and redeem the said bonds until the same shall be fully discharged."
One section also provided “that any judge, tax-collector, or any officer of the State obstructing the execution of this act, or any part of it, or failing to perform his official duty thereunder, shall be deemed guilty of a misdemeanor, and on conviction thereof shall be punished by imprisonment not exceeding five years and by fine not exceeding two thousand dollars, at the discretion of the court."
Another section enacted that each provision of the act should be, and it was declared to be, "a contract between the State of Louisiana and each and every holder of the bonds” issued under the act.
But, as though this act was not of itself a sufficient assurance of the unalterable purpose of the State to fulfil the promise it contained, an amendment to her Constitution was proposed and adopted, of which the following is the first section:
" The issue of consolidated bonds, authorized by the General Assembly of the State, at its regular session in the year 1874, is hereby declared to create a valid contract between the State and each and every holder of said bonds, which the State shall by no means and in no wise impair. The said bonds shall be a valid obligation of the State in favor of any holder thereof, and no court shall enjoin the payment of the principal or interest thereof, or the levy and collection of the tax therefor; to secure such levy, collection, and payment, the judicial power shall be exercised when necessary. The tax required for the payment of the principal and interest of said bonds shall be assessed and collected each and every year, until the bonds shall be paid, principal and interest, and the proceeds shall be paid by the treasurer of the State to the holders of said bonds, as the principal and interest of the same shall fall due, and no further legislation or appropriation shall be requisite for the said assessment and collection, and for such payment from the treasury.”
It would puzzle the wit of man to find anywhere in the legislation of the world a more perfect assurance of the fixed purpose of a State to keep faith with her creditors, or of a pledge of a portion of her revenues for their payment, or of the submission of her officers to the compulsory process of the judicial tribunals, if necessary, to carry out her engagements. With the knowledge that the Federal Constitution ordains “that no State shall pass any law impairing the obligation of contracts,” Louisiana proclaims that each provision of the act shall be and is thereby declared to be a contract between her and each and every holder of the bonds issued under the act. And the constitutional amendment reiterates substantially the same thing by declaring that the issue of the consolidated bonds
created a valid contract between the State and each and every holder of said bonds, “which the State shall by no means and in no wise impair.”
Under this act and the constitutional amendment, obligations of the State amounting to over $12,000,000 were surrendered, and bonds taken for sixty per cent of their amount, which are held all over the country. The complainants in the injunction suit, and the petitioners for the mandamus, hold for themselves and others, whom they represent, $900,000 of the bonds. The interest on them has not been paid, and yet a portion of the tax levied to meet such interest has been collected, and is now in the hands of the treasurer of the State, one of the board of liquidation. The amount is admitted to be about $300,000, and as collections were making when this admission was given, there is now probably a much larger amount in his hands. In both suits it is alleged that the treasurer and other officers of the State intend to use the funds thus collected for other purposes than the payment of the interest. In one of them an injunction is asked against such a perversion of the funds. In the other a mandamus is asked to compel the application of the funds to the payment of the interest, and also the collection of the taxes authorized by the act of 1874, and the constitutional amendment of that year, to meet further interest as it shall become due.
Why should not both these prayers be granted ?
The only answer offered is, that in 1879 Louisiana adopted a new Constitution, which reduced the interest on the consolidated bonds to two per cent per annum for five years, to three per cent for fifteen years afterwards, and to four per cent thereafter, with a proviso that the holders of the bonds might take new bonds for seventy-five per cent on the dollar, drawing four per cent interest.
The new Constitution also directed that the coupon of the consolidated bonds falling due Jan. 1, 1880, should be remitted, and that the interest taxes collected for its payment should be transferred to defray the expenses of the State government. The change in the rate of interest and the remission of the coupon falling due Jan. 1, 1880, were made