# Plaintiffs Brief — McCullough v. Commonwealth of Virginia

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Plaintiffs Brief
- **Published:** January 1, 1898
- **Citation:** 172 U.S. 102

## Text

-Ocroper TERM, 1896.
No. 125.

A. A. McCULLOUGH,
Wi 5 ;
THE COMMONWEALTH OF VIRGINIA.

Reply Brief of
_Ricnarp L. Maury,
For the Plaintiff.

IN THE

Supreme Court « United States,

A. A. McCULLOUGH,

v,

THE COMMONWEALTH OF VIRGINIA.

Repry Brier or Ricnarp L. Maury, ror rae Piarnrirr.

Uvon THE Jurispiction.

It abundantly appears, as well from the record as the
statements and briefs of counsel, already filed, that this is a
case depending upon legal principles which, in this tribunal,
have been already so often adjudicated and affirmed, that in
the later decisions thereupon it has been expressly deter-
mined that they are no longer open to controversy or de-
nial. (McGahey v. Virginia, 185 U. 8. 662.)

‘It is, in short, a case instituted by the petitioner after
your decisions just referred to (and therefore with full faith
and reliance upon their sufficiency to support the claim
asserted), to procure the reception of his coupons for his
taxes as provided by the act under which he was proveed-
ing, wherein, by the decision of the highest court of Vir-
ginia dismissing the petition, the appellant is denied, not
only the remedy which the statute affords, and which the
Supreme Court of the United States has declared to be
the absolute right of every holder of these coupons, pro-
tected by the Constitution and laws of the United States,
of which they cannot lawfully be deprived (Antoni v.
Greenhow, 107 U. 8. 771); but his coupon contract, which

2

the same supreme tribunal has adjudged to be valid, legal,
inviolable, unalterable, protected and shielded by the Con-
stitution and laws of the United States (Poindexter v. Green-
how, 114 U. 8. 279; MeGahey v. Virginia, 135 U.S. 668),
is now declared to be utterly null and void. Thus, by in-
direction, but eonclusively, validity is given to an act of
the Virginia Legislature, passed after the issuance of the
coupons, which forbids that they be received for taxes, an
act which both this court and the said Virginia court have
time and again and invariably held to be obnoxious to the
Constitutions, both State and Federal. The act thus vali-
dated is the act of 1872-3, frequently referred to in the
many Virginia coupon decisions here, and has been re-
affirmed and adopted as section 399 of the Virginia Code
of 1887, whose words are as follows: “It shall not be lawful
for any officer charged with the collection of taxes... ..
to receive in payment thereof anything else than gold or
silver coin, or United States treasury notes, or national
bank-notes.” And, indeed, validity is thus given to the
many other acts of Virginia forbidding the use of these
coupons, all of which your honors have decided to be in-
valid because they impaired the obligation of this contract.
They are fully described in the decisions to which we will
presently refer.

It is not, therefore, such a case as the distinguished At-
torney-Gencral supposes and cites authority for, because the
question for your determination now is not whether you will
follow the first or the last State decision, but whether you
will follow your own, or that of the Virginia Court of
Appeals.

It is a case of a suitor pursuing a remedy, as a means of
procuring the reception of his coupon for his tax, which the:
Supreme Court of the United States had previously decided
is his, and cannot, withont violation of the United States
Constitution, be denied him—a remedy which the said court
had decided was a right inherent to every coupon. (Antoni
v. Greenhow, 107 U. 8. 769.) He is, therefore, asserting a

3

Federal right, and it is denied him by dismissing his peti-
tion.

It is a case of a suitor asserting a contract right protected
by the Constitution and laws of the United States; and a
decision that his alleged contract is not a contract at all, and
therefore not protected by the Constitution and laws of the
United States, for although in his petition below he did
not in terms claim the above Federal rights, yet by all
the rules of pleading and procedure he has claimed them,
because one who sues claims and asserts every right and
every law and every decision which supports his claim, for
these are the law of the case and are all relied upon and in-
volved without being specially plead; and the opinion of the
court below and its decree thereon clearly show that the
Federal right is denied him.

It is a decision to support which the Virginia court hath
construed and interpreted a decision of the Supreme Court
of the United States, hath declared it to be exactly what the
Supreme Court itself declared it was not, and which, there-
fore, violates Section 1, Article [V., United States Constitu-
tion. And, failing to recognize and follow said decision as
the supreme law of the land, being the decision of the
Supreme Court of the land, it also violates Section 1, Article
III., and for a like reason Section 2, Article VI.; for it is
submitted that the Supreme Court being the ultimate tri-
bunal to ascertain and declare what is the law of the United
States, its declarations must, at least, be of equal force and
effect to the Constitution and laws and treaties which it is
empowered to interpret. Its decision, therefore, must be
considered as included in, and as part of, that supreme law
of the land which the judges in every State are directed to
recognize and obey, and which these Virginia judges have
attempted to evade and utterly disregard.

It is a decision the direct and necessary result of which is
to validate a law of the State passed subsequent to the con-
tract, which the Supreme Court and the State court buth
have held to be obnoxious to that clause of the Constitution

4

of the United States which forbids that contracts be im-
paired. (Antoni v. Greenhow, 107 U. 8. 771.)

It is a decision which more than impairs the contract as-
serted, for it destroys it, and decides that the alleged con-
tract is not a contract at all.

But for the special feature herein (which most assiduous
search has failed to find in any of the cases where jurisdic-
tion has been declined), that the alleged contract has already
been decided in this court to be such, and within the pro-
tection of the United States, it might be logically answered
that the decision complained of is but one of construction,
not of validity, and only determined that the compact which
the plaintiff denominated a contract was not sich. But this
may not be said within these walls, for here, at least, it
cannot and will not be denied that the contract is a valid
and binding one, and can no longer be assailed or its
validity disputed. This court itself has so determined many
times. (MecGahey v. Virginia, 135 U.S. 668.)

It is a decision in violation of his right under his contract,
because it denies to the petitioner the only remedy he hath
to procure the reception of his coupons in payment of his
taxes, the proceeding he adopted being the sole remedy
afforded him by the State, whose statute, vited upon the first
page of the petition for this writ of error, provides that
when the conpons thus presented shall have been adjudi-
cated genuine they shall be received for the taxes for which
they were tendered. (§ 408; p. 2 of the Record.)

Thus there are many Federal questions involved, any one
of which will suttice for your jurisdiction.

Perhaps, indeed, there are others besides those already in-
dicated, for, as the contract sued on, and which this court has
adjudicated to be valid, inviolable, and within the protection
of the Constitution of the United States, has, by the decision
complained of, been declared to be indivisible, void in part,
and, therefore, void altogether, and as a part of this con-
tract is a promise to pay money, that is to say, legal money
as determined by the laws of the United States, the case

5

falls within the rule of Woodruff v. Mississippi, 162 U. &.
302, where it was held that a Federal question had been de-
cided, and that a writ of error would lie.

It is, therefore, apparent that there are now involved, in
the decision complained of, the identical questions which
this court holds that it has finally disposed of. You have
said in McGahey v. Virginia, 185 U.S. 668: “ We have no
hesitation in saying that the act of 1871 was a valid ect,
and that it did and does constitute a contract between the
State and the holder of the bonds issued under it, and that
the holders of the coupons of said bonds . . . are entitled,
by a solemn engagement of the State, to use them in payment
of State taxes,..... this question may be considered,
therefore, as foreclosed and no longer open for considera-
tion.” Aiso that the act of 1872~73 (p. 9, chap. 12, par.
1), Code of Virginia, edition 1887, § 399, which forbids the
reception of coupons for taxes, is unconstitutional and void.
(Hartman v. Greenhow, 102 U. S. 672; Antoni v. Green-
how, 107 U. 8. 771.) And you have also determined that
the remedy adopted below by the plaintiff, the culmination
of which, the statute says, shall be the reception of the
coupons tendered for taxes, for section 408, Virginia Code,
(Record, p. 2), provides, “If it be finally decided in favor of
the petitioner that the coupons tendered by him are genuine
coupons, legally receivable for taxes, debts, and demands,
then the judgment of the court shall be certified to the
treasurer, who, upon receipt thereof, shall receive said cou-
pons and shall refund the money,” ete., is inherent to the
coupon contract, and the absolute right of any tax-payer
holding these coupons. (Antoni v. Greenhow, 107 U. 8S.
775.) And, furthermore, you haye also decided that the
effect of your decision in Vashon v. Greenhow, 135 U. 8.
713 and 716, did not invalidate the entire coupon contract.

In contravention of every one of these decisions, the Court
of Appeals of Virginia now determines the direct converse of
each—. é., that the act of 1871 (and 1879) 1s unconstitn.
tional, that the coupon contract 1s null and void, that the

6

act forbidding the receipt of coupons for taxes 1s valid, and
that the plaintiff hath nor the right to the remedy he used,
for the court dismissed his petition, and that, too, without
even returning to him either the coupons or the money
which he had delivered to the collector, as he was required
to do by the law (Record, p. 1, § 407, and p. 9), thus de-
priving him of his property without due process of law.

It will not be denied that the object and intent of the
Constitution and laws of the United States and of the judi-
ciary act was to confer jurisdiction upon Federal courts to
afford protection to every right and privilege conferred upon
a citizen by our Constitution and laws. Nor will it be
denied that one of such rights is that the judgments and de-
cisions of the Supreme Court shall be accepted, followed,
and obeyed by all, and cannot be misinterpreted and per-
verted to his prejudice and injury. Nor can it be contro-
verted that any one asserting any claim, right, or demand by
iegal proceedings, thereby in effect claims every right, title,
privilege, immunity of, and authority under, all laws, both
State and Federal, as well as of all decisions of the Supreme
Court which support his claim; or that in Virginia the
opinion of the Court of Appeals is made part of the record
of the case. (Virginia Constitution, § 4, Art. VI.)

If these postulates be correct, then we maintain that our
case falls clearly within the rule of jurisdiction stated by
the Chief Justice in Sayward v. Denny, 158 U. S. 184:
“The right on which the party relies must have been
called to the attention of the court in some proper way, and
the decision against the right claimed; or, at all events, it
must appear from the record, by clear and necessary in-
tendment, that the Federal question was directly involved,
so that the State court could not have given judgment with-
out deciding it; that is, a definite issue as to the possession
of the right must be distinctly deducible from the record
before the State court can be held to have disposed of such
Federal question by its decision.”

If, by “reasonable intendment” this court will be satisfied,

7

for jurisdictional purposes, that a Federal question has been
decided, how much more by the express language of the court
below itself stating in terms its decision of a Federal question.

“If the facts and the decision are such as to show that
a Federal right was adversely decided below, the juris-
diction of the Supreme Court of the United States is not
defeated by showing that the record does not mention a Fed-
eral question, or state in terms that one was presented below.
5 Whenever rights acknowledged and protected
by the Federal Constitution are denied under the shield
of State legislation, this court is authorized to interfere.

The true test is, not whether the record exhibits
an express statement that a Federal question was presented,
bat whether such a question was decided, and decided ad-
versely to the Federal right.” (Murray v. Charleston, 6
Utto, 432.)

“In order to sustain the jurisdiction of this court upon
the ground that a Federal question is presented, it should
appear. . . . that such question was apparent upon
the record, and that a decision was made thereon.” (New
Orleans v. Water- Works, 142 U.S. 79.

We submit that it matters not how or when the question
was presented, if in very fact it was presented, and if in
very fact it was decided; it is immaterial how the wrong
has been done, if it has been done, and it comes to the
same thing here, if the right has been denied, whether the
court below has misconstrued the act of 1871 or the de-
cision of the United States Supreme Court.

In Furman v. Nichol, 8 Wall. 44, the rule is thus stated :
“Tf the record shows . . . . that the constitutional provi-
sion did arise, and that the court below could not have
reached the conclusion and judgment it did reach without
applying it to the case in hand, then the jurisdiction of the
court attaches. It is sufficient to confer jurisdiction that the
question in the case was decided adversely to the plaintiffs,
and that the court was induced by it to make the judgment
it did.”

8

In Davis v. Packard, 6 Peters, 49, the court said: “It
has also been settled, that in order to give the court juris-
diction under the twenty fifth section of the judiciary act, it
is not necessary that the record should state in terms that
an act of Congress was, in point of fact, drawn in question.
It is sufficient if it appears from the record that an act of
Congress was applicable to the case, and was misconstrued.”

In Satterlee v. Matthewson, 2 Peters, 410, the court said:
“ One of these principles is, that if it sufficiently appear from
the record itself that the repugnancy of a statute of a State
to the Constitution of the United States be drawn in ques-
tion, or that that question was applicable to the case, this
court has jurisdiction of the cause,-. . . . although the re-
cord should not in terms state a misconstruction of the
Constitution of the United States, or that the repugnancy of
the statute .... to any part of thel Constitution of the
United States was drawn into question.”

Mr. Phillips, in his most excellent work on the “United
States Supreme Court Practice,” page 179, fifth edition,
thus summarizes the law: “It is now established that the
jurisdiction cannot be avoided by the mere absence of ex-
press reference to some provision of the Constitution.
Wherever rights protected by it are denied or invaded under
the shield of State legislation, this court will interfere.”
[We respectfully submit that the distinguished writer was
too cautions here, and that the limitation he speaks of does
not exist, for Federal courts must have jurisdiction to pro-
tect Federal rights, from whatever source they spring, no
matter how invaded.] ‘The form in which the Federal
question is raised in the State court is of minor importance,
if, in fact, it was raised and decided.”

“There is nothing in the act of 1867 (Rev. Stat. § 709)
in reference to the mode in which it shall appear.”

“Undue importance is often attributed to the inquiry
whether the pleadings in tie Stete court expressly assert a
right under the Federal Constitution. The true test is, not
whether the record exhibits an express statement that a

9

Federal question was presented, but whether such a ques-
tion was decided, and decided adversely to the Federal
right. It has always been held that the revisory jurisdic-
tion exists over the judgments of the State courts when the
determination of the court could not have been made with-
ont deciding upon a right or authority claimed to exist under
the Constitution, laws, or treaties of the United States, and
deciding against that right; and very little importance has
been attached to the inquiry whether the Federal question
was formally raised.”

It would thus seem that it is not necessary to claim in
express terms the Federal right relied on, if, in fact, it has
been denied.

Let us examine, then, whether any Federal right Aas
been denied McCullough.

The case of Havemeyer v. Iowa, 3 Wall. 294, seems
surely to support our position that the destruction ‘of a con-
tract, hitherto adjudged valid by a decree of court, is an
impairment, and therefore within the meaning of the Con-
stitution of the United States, and the judiciary act.

It was a suit involving the validity of issue of certain
county bonds, which, until then, had been invariably recog-
nized as valid, but which had recently been decided to be
invalid by reason of a new interpretation given to an old
law, in existence before the bonds were issued. The Su-
preme Conrt held that such judicial iaterpretation would be
an impairment of the contract, saying that if the contract,
when made, was valid by the Constitution and laws of the
State as then expounded by the highest authority whose
duty it was to administer them, no subsequent action by the
Legislature or the judiciary can impair its’ obligation, which
rule, the court says, was established in Gelpeke v. Dubuque,
1 Wallace, 175, upon careful consideration, and that it rests
upon a solid foundation, and will not be departed from.
This rule there laid down is: “If the contract, when made,
was valid by the laws of the State as then expounded and
administered in its courts of justice, its validity and obliga-

10

tion cannot be impaired by any subsequent legislation, or
decision of its courts. The same principle applies, where
there is a change of judicial decision, as to the constitutional
power of the Legislature to enact the law.” Said the court:
“To this rule, thus enlarged, we adhere. It is the law of
this court. It rests upon the plainest principle of justice.
To hold otherwise would be as unjust as to hold that rights
acquired under a statute may be lost by its repeal.” May
we not add, as did Mr. Justice Swayne, “The rule embraces
the case” ?

We think that the language of the court in Delmas v. The
Merchants Insurance Company, 14 Wall. 661, applies with
great force, especially when it is remembered that it cannot
now be denied by any one within ¢his court that in the case
at bar “there is a contract to be impaired.” If, then, the
court jealously takes jurisdiction upon the mere suggestion
that there is a “contract to be impaired,” how much more
readily will it do so when it has itself already decided
that there is a “contract to be impaired, and that it cannot
be impaired”! It is this special feature in our case that
differentiates it from the many decisions which may be cited
wherein the preliminary question was, “contract, or no con-
tract?” and the State court held that there was none; for
by the Supreme Court, the supreme lawgiver of the land,
acting under authority conferred by the Constitution and
the iaws of the United States, it has been determined that
ours is a contract, valid and binding, which no authority of
the State can modify or change. And it is the fact that
‘there are such decisions, which brings every case instituted
upon this contract after these decisions were made, within
the rules of jurisdiction that the Federal right should be
claimed, without making special mention of them.

The following is the language referred to: “ Besides, this
court has always jealously asserted the right, when the ques-
tion before it was the impairment of a contract by State
legislation, to ascertain for itself if there was a contract to
be impaired. If it were not so, the constitutional provision

_—ceeeee 5

ee

11

could always be evaded by the State courts by giving such
a construction to the contract, or such decision concerning
its validity, as to render the power of this court of no avail
in upholding it against unconstitutional legislation.”

It appears, therefore, that, while a record which shows
suit upon a contract (being that which the Constitution says
shall not be impaired by the State), and a decision by the
State court that there was no contract, might not present a
Federal question, it would be otherwise if the Supreme Court
had already determined that there was a contract, and that
it was protected by the United States Constitution.

In the first case, jurisdiction might fail because the State
judginent was that there was no “ contract, and therefore no-
thing to impair.” But this is not always so. In the latter,
jurisdiction would attach because, as the Supreme Court has
established the contract which the State court afterwards
holds to be non-existent, there must, of necessity, be an im-
pairment, and, therefore, of necessity, jurisdiction to deter-
mine whether the contract were snch an one as the Constitu-
tion referred to, and whether the impairment snch as it
forbids.

In such a case, therefore, it is plain that some “right or
privilege, on which the recovery depends, will be defeated by
one construction of the Constitution or laws of the United
States, or sustained by another, and, therefore, the case will
be one arising under the Constitution and laws of the United
States.” (Pacific Rk. R. Co. v. California, 118 U.8. 109.)

In like manner it hath been decided, in Jefferson Bank
v. Skelly, 1 Black. 436, that this court hath appellate
power to reverse decisions of the highest State courts when-
ever the latter shall adjudge that not to be a contract which
is alleged in legal proceedings to be one within the mean-
ing of that clause of the Federal Constitution which forbids
impairment.

Mention has already been made that the decision com-
plained of necessarily gives effect to many laws which im-
pair the obligation of the contract. The various decisions in

12

the Virginia conpon ce ses give a fall history and a detailed
account of their character and application. For the sake
of brevity we will base our argument upon a single one
alone, which, like all the others, is validated by the decision
complained of, and which thus brings the case within the
constitutional inhibition, althongh the law actually inter-
preted by the decision complained of was anterior to the
making of the contract relied on. The law referred to as
being thus validated is the act of March 7, 1872, em-
bedied in the Code of Virginia, 1887, Section 399.

It forbids the collectors to receive aught in payment of
taxes save money. Hitherto it has been held uniformly,
both by State and Federal courts, to be unconstitutional, be-
cause it impaired the obligation of the coupon contract.
(Antoni v. Greenhow, 107 U. 8. 769, where the court
also said, that “any act of the State which forbids the
receipt of these coupons for taxes is a violation of the con-
tract and void as against coupon holders.”) And in another
connection, and considering the whole body of the many
coupon laws in Virginia so fully described by the court in
McGahey v. Virginia, 135 U. 8. 662, the Supreme Court
said (Poindexter v. Greenhow, 114 U.S. 304, 306): “The Acts
of Assembly in question must be taken together, as one is
but an amendment of the uther. The scheme of the whole
is indivisible. It cannot be separated into parts; it must
stand or fall together. . . . The whole legislation, in all
its parts as to creditors affected by it and not consenting to
it, must be pronounced null and void. Such is the sentence
of the Constitution itself, the fundamental and supreme law
for Virginia, as for all the States, and for all the people,
both of the States separately and of the United States, and
which speaks with sovereign and commanding voice, expect
ing and receiving ready and cheerful obedience, not so much
for the display of its power as on account of the majesty of
its authority and the justice of its mandates.” And in
MeGahey v. Virginia the court reiterated this, saying in
effect that all the State laws which were passed for the pur-

13

pose of restraining the use of coupons for taxes were unco?-
stitutional and invalid so far as they had such effect. The-
State court now declares that there is no coupon contract,
and this in effect validates this law. But thereby the Fed-
eral question cannot be avoided, or a Federal right be thus
deprived of the protection of the United States Court. This
feature also differentiates our case from many that may be
cited, where the courts have held that the judicial construe-
tion of a law, passed before the contract was made, cannot
be held to impair what was not in existence, and therefore
there is no Federal question involved in such decision, and
brings our case within the rule, necessary to prevent just such
evasions, that if the decision give validity to a subsequent
law which impairs the obligation of the contract, jurisdiction
will attach.

Therefore, “if by necessary operation the decision com-
plained of gives effect to some law which impairs the ob-
ligation of the particular contract in question,” a Federal
question will be involved. (Lehigh Water Co. v. Huston, 121
U.S. 388.)

Onur position in this respect is also supported by the deci-
sion in Chicago Life Ins. Co. v. Needles, 113 U. 8. 574, the
reasoning of which is most applicable to the case at bar. Said
the court: “The Supreme Conrt of Illinois did not in terms
pass upon the claim . . . . that the statutes in question were
in derogation of rights and privileges secured to appellant
under the Constitution of the United States. But the final
judgment necessarily involved an adjudication of that claim,
for if the statutes under authority of which the auditor pro-
ceeded are repugnant to the national Constitution, the judg-
ment could not properly have been rendered. This cout,
therefore, has jurisdiction to inquire whether any right or
privilege protected by the Constitution of the United S ates
has been withheld or denied by the judgment below, and
our jurisdiction is not defeated, because it may appear,
upon examination of this Federal question, that the statutes
are not so repugnant. Such an examination itself involves

14

the exercise of jurisdiction, and the motion to dismiss is
denied.”

Cases have occurred where, when legislative repeals or
attacks upon contracts have been found to be such as the
Supreme Court would declare void, State courts have at-
tempted to avoid its jurisdiction, and at the same time
destroy the coutract by a forced construction of the laws in
existence when it was made, and thus frustrate an appeal.
But thus to accomplish by indirection what cannot be directly
done is forbidden, and in such cases it is found that the
Supreme Court has often taken jurisdiction.

In order that the statute of 1872, section 399 of the Code
of 1887, should impair the contract obligation of the coupon,
it is not necessary that that statute should itself be made the
reason for declaring the contract invalid, or for restricting
its full and proper obligation. Even if, as in the case at
bar, the highest court of Virginia declares the contract in-
valid on grounds independent of the later act of 1872 (Code
of 1887, § 399), still, if the declared invalidity of the con-
tract, though placed upon such independent or general
grounds, necessarily imparts to the subsequent statute an
effect which it could not have but for the contract’s invalid-
ity, the contract is impaired by the later act. The essential
thing is only that the subsequent act derives an effect which
it cannot properly have if the contract is valid. An incon-
sistency between the subsequent statute, thus effectuated,
and the rights growing out of the contract, correctly con-
strued, makes a case of impairment of the obligation of the
contract. It is the effect actually given to a statute subse-
quent to a contract, and claimed to impair it, which deter-
mines whether, if the contract exists, the statute does in
fact impair it. The statute, as impliedly construed by the
State court, and with the operation there accorded it, is
what this court looks at to decide whether a contract has
had its obligation impaired.

In the case at bar it is manifest that the tax-collector re-
fused to receive McCullough’s coupons outright in payment

15

of his taxes because he was forbidden to do so by section
399 of the Virginia Code. It was in obedience to this law
that he acted as he did, and accepted the coupons, condi-
tionally, until “verified.” This law, therefore, thongh not
specially plead, becomes a part of this case; it was, in fact,
the very reason why there was a case at all, for withont it
the coupons would have been at once received in payment
of the tax; and, as the effect of the decision complained of
is to validate it entirely, the Federal question is apparent.

University v. People, 99 U.S. 309, sustains this proposi-
tion. The Supreme Court of the State of Illinois gave effect
to an act of the Legislature passed after the act incorporat-
ing the university, and creating, as the institution insisted,
an irrepealable contract, on the ground that the same was
repugnant to the prior State Constitution. Jurisdiction of
a writ of error by this court was strenuously resisted by the
Attorney-General of Illinois, because the record did not dis
close that the State court’s decision was based upon any
State law passed subsequently to the making of the sup-
posed contract, or that any such claim was made in that
court, but that the State court’s judgment was simply that
there was no contract, and was, hence, not reviewable here.

Mr. Justice Miller said, however, for this court, that
the writ. of error properly lay, because the State court was
giving effect to the subsequent statute, although upon inde-
pendent grounds, which was charged to impair the contract.
Your honors will observe that neither in the record of this
case, nor in the assignment of errors, is it charged that the
contract is impaired by legislative act, and this, as stated,
was one of the grounds of objection to jurisdiction.

Now, apply these rules to the case at bar. The Virginia
court decided that the funding bill of 1871 did not and could
not make an abiding contract. But it did not decide, and it
could not, that the said acts did not give authority that the
coupons should be received for taxes, until the Legislature
choose to withdraw the privilege. The act of 1872, if valid,
withdrew the privilege, and the Virginia court dismissed

16

McCullough’s petition, which could not have been done for
the reasons the Virginia court gives, except by treating the
act of 1872 as valid, which is thus given effect by the deci-
sion complained of.

A motion to dismiss was made and overruled in Wright
v. Vagle, 101 U.S. 793, for want of a Federal question,
which deserves mention.

Appellant was the assignee of certain exclusive ferry
rights, obtained in 1851 from an inferior court of Georgia.
In 1872 the county officers authorized the appellee to exer-
cise similar rights within the appellant’s territory, who
promptly applied for an injunction, setting forth his own
contract, and charging that the same had been impaired in
violation of the United States Constitution. The answer
denied the validity of complainant’s contract, and the court
so deciding dismissed the bill.

Your honors will note that here was no legislative act,
but a bare act of local inferior ofticers, whose validity was
sustained by the State court and by inference only, for, as
in McCallongh’s case, appellant’s petition was dismissed for
want of a contract right as claimed.

You stated (pp. 793-’4) that ordinarily a State court’s
construction of its statutes was conclusive on you, but de-
clared in the same breath: “One exception, however, exists
to this rule, and that is where the State court has been
called upon to interpret the contracts of States, though they
have been made in the forms of law, or by the instrumen-
tality of a State’s authorized functionaries, in conformity
with State legislation.”

“If the court,” your honors say (p. 794), “erred in con-
struing the statute, and in holding that there was no con-
tract... . in this way, it seems to us, a Federal question
is raised upon the record, which gives us jurisdiction.”

If in Wright’s case you reviewed a decision of the State
court that he had no contract, upon a record charging an
impairment thereof by subsequent non-legislative interfer-
ence, how much more will you entertain McCullough’s case,

17

where you yourselves have solemnly reiterated his possession
of a right which he now complains to you is being not im-
paired only, but annihilated, by judicial interference.

You have repeatedly declared (Louisville Gas Co. v. Citi-
zens’ Gas Co., 115 U.S. 697, and cases cited) it your duty,
upon your own judgment, and independently of the adjudi-
cation of the State court, to decide whether there exists a
contract within the protection of the United States. We
submit that you will the more readily make such inquiry
when requested by one, who, like McCullough, exhibits a
right which yourselves have repeatedly affirmed is a contract,
in the immunity whereof, you have said (vindexter v.
Greenhow, 114 U.S. 301), he is securely shielded by the
Constitution.

Indeed, it would seem, for the purposes of jurisdiction,
sufficient to charge an impairment of a contract’s obligation
by State law, and a justification by the State court of such
impairment by the application of some general rule of law.
It then becomes this court’s duty to inquire whether such
justification is well founded.

In Given v. Wright, 117 U. 8. 656, your honors so
expressed yourselves. Given resisted Wright’s attempted
collection of taxes on the ground that his property was ex-
empt therefrom by virtue of a contract with New Jersey in
1758. The State court declared, upon a general principle of
law, that the contract was long since abandoned, and the
lands subject, therefore, to taxation.

These cases to which we have invited your attention indi-
cate that it has ever been this court’s inclination to examine
for itself the question of contract or no contract when its
assistance has been invoked, and it can see for itself that
what is alleged to be a contract has, if such, been impaired,
whether by express legislative interference, by quasi legisla-
tive interference, by judical decision in the remotest degree
giving effect to subsequent legislation which would interfere,
though the pleadings do not formally recite the chapter and
line of the sacred instrument whose protection they in-

18

voke, nor specifically arraign the act of the State claimed to
impair the right. Our contention is that McCullough ten-
dered his coupons for verification only because it was recog-
nized that the collector would refuse them otherwise in obe-
dience to the act of 1872, section 399, Code of Virginia,
1887 edition ; that he was, therefore, obeying said act, as well
as the verification act; and that the Virginia court’s decision,
denying the validity of McCullough’s contract and dismiss-
ing his petition, affirmed the validity of said act of 1872 in
effect, and brings his case entirely, therefore, within the
reasoning of those we have cited, in one and all of which
this court overruled motions to dismiss for want of jurisdic-
tion.

Your honors entertained a writ of error in Hoadley v.
San Francisco, 124 U. 8. 639, where only in the brief of
counsel for Hoadley (page 645) was the Federal question
presented as a specification of error, and you cite Zhe
Bridge Proprietors v. The Hoboken Company, 1 Wall. 116,
145, and say, “ The existence of the contract or of the right
is part of the Federal question itself.”

Mr. Justice Gray has succinctly summarized the result of
the authorities, applying to cases of contracts the settled
roles that in order to give this court jurisdiction of a writ
of error to a State court a Federal question must have been
expressly or in effect decided by that court, in ew Orleans
Water- Works v. Louisiana Sugar Co., 125 U. S. 38. He
says, telling off the classes of cases seriatim, “So, when the
State court upholds the subsequent law, on the ground that
the contract did not confer the right claimed, this court may
inquire whether the supposed contract did give the right,
because, if it did, the subsequent law cannot be upheld.”

Will your honors be referred to Yazoo BR. &. Co. v.
Thomas, 132 U. 8. 174, strikingly wages McCullough’s
case in the pleadings ?

Appellant prayed for an injunction against Thomas and
others, sheriff and tax collectors, to restrain the collection
of certain taxes as illegal, asserting an exemption under a

19

prior State contract, and asserting that the same was pro-
tected under the contract clause of the United States Con-
stitution. Defendants demurred to the bill, and the same
was dismissed by the State court and affirmed by the Sa-
preme Court on the ground that the company had not such
contract as claimed. Your honors took jurisdiction, even
though the ground of the State court’s decision was other
than that the contract set up was unconstitutional.

The case of the Wilmington & Weldon R. R. Co. v. Als-
brook, 146 U.S. 293, is alsu in point. The company en-
joined the tax collector from collecting a tax upon part of
its property under the general revenue law of the State,
because its charter provided that all its property should be
free of tax, for which it claimed Federal protection. Observe
that there was no question as to the legality of the revenue
law. The State court declared that the charter exemption
did not cover the particular property alluded to, and upon
writ of error this court took jurisdiction, because the neces-
aary effect of the decision was to validate the revenue law,
when the contrary decision would necessarily have invali-
dated it so far as applicable to the company’s property.

Said the court: “The jurisdiction of this court is ques-
tioned, upon the ground that the decision of the Supreme
Court of North Carolina conceded the validity of the con-
tract of exemption contained in the act of 1834, but denied
that particular property was embraced by its terms, and
that, therefore, such decision did not involve Federal ques-
tion.

“Tn arriving at its conclusion, however, the State court
gave effect to the revenue law of 1891, and held that the
contract did not confer the right of -exemption from its
operation. If it did, its obligation was impaired by the sub-
sequent law, and as the inquiry whether it did or did not was
necessarily passed upon, we are of opinion that the writ of
error was properly allowed.” ( Wilmington & Weldon R. R.
Co. v. Alsbrook, 146 U. S. 293.)

Your decision in the case of Given v. Wright, 117 U.S.

20

655, is also pertinent and persuasive. It was instituted
by land-owners within the “Indian Reservation” of New
Jersey claiming exemption from taxation by the terms of
the original grant. The defence was that this privilege had
been, in effect, surrendered by acquiescence in taxation. Said
the court: “The question then will be whether the long ac-
quiescence of the land-owners under the imposition of taxes
raises a presumption that the exemption which once existed
has been surrendered. This question by itself would be a
mere question of State municipal law, and would not involve
any appeal to the Constitution or laws of the United States.
But where it is charged that the obligation of a contract has
been impaired by a State law, as in this case by the general
tax law of New Jersey as administered by the State authori-
ties, and the State courts justify such impairment by the
application of some general rule of law to the facts of the
case, it is our duty to inquire whether the justification is well
grounded. If it is not, the party is entitled to the benetit of
the constitutional protection. (Afurdock v. Memphis, 20
Wall. 590, 636: Prop. 6.)”

The case of Mobile & Ohio BR. Le. Co. v. Tennessee, 153
U.S. 486, is analogous to our own, and the principle for
which we are contending seems clearly deducible from that
decision. The case was thus: The railroad company was
chartered by Tennessee, and by its charter exempt from
taxes, which the State authorities attempted to collect, never-
theless, under a recent act taxing its property. The de-
fence was that the tax law was an impairment of the
obligation of the contract of the charter and, therefore,
void. Had the State court directly adjudicated this ques-
tion, there could have been no doubt of the right of the
compasy to appeal to the United States Court. But the
State court of Tennessee, like that of Virginia, sought to
avoid the Federal question by so construing the State Con-
stitution, in force betore the charter was granted, as to de-
termine that no contract had ever been made. Said Mr. Jus-
tice Jackson, in delivering the opinion of the court, p. 492:

21

“Tt is contended by counsel for defendants in error, that this
court is without jn isdiction to review the judgment of the
Supreme Court of Tennessee, because it was based or pro-
ceeded upon the ground that there was no contract in exist-
ence “‘ between the company and the State to be impaired,
and that the supposed contract was in violation of the State
Constitution of 1834, and hence not within the power of the
Legislature to make.” .... “It is well settled that the
decision of the State court holding that, as a matter of con-
struction, a particular charter or a charter provision does
not constitute a contract is not binding on this court. The
question of the existence or non-existence of a contract in
cases like the present is one which this court will determine
for itself, the established rule being that where the judgment
of the highest court of a State by its terms, or necessary
operation, gives effect to some provision of the State law
which is claimed by the unsnecessful party to impair the con-
tract set out and relied on, this court has jurisdiction to de-
termine the question whether such a contract exists as
claimed, and whether the State law complained of impairs
its obligation. A brief reference to some of the authorities
is sutticient to show this.” ... “The grounds upon which
the Supreme Court of the State held that the contract
claimed by the company under its charter was invalid in
no way affects the jurisdiction of this court. The legal ex-
istence of the contract itself, and its proper construction, is
necessarily involved in the question of alleged impairment.”
We beg that your honors will refer to all of what was then
said upon this subject. (Pp. 493-95.)

If the mere allegation, whether true or the reverse, that
the State law, validated by the decision complained of, im-
paired the contract relied on, suffices to give jurisdiction,
surely the decision of this court already given, that such
was the effect of the law thus validated, should not have
less effect. In the many decisions of this court upon these
Virginia coupons, you have always decided that the act of
March 7, 1872, forbidding the receipt of coupons for taxes,

22

is unconstitutional and void, because impairing the obliga-
tion of the coupon contract. But by the present decision it
is said that there is no such contract; if so, the law of 1872
is validated. As already said, this law has been incorpo-
rated into the Virginia Code of 1887, and is now section
399 thereof.

Now, in consideration of your decisions, and the former
decisions of the Virginia Court of Appeals (Antoni v.
Wright, 22 Grat. 833), that this law of 1872 does impair
the obligation of the contract in question, we think that the
necessity to jurisdiction of an allegation of that fact is
obviated. If so, our case falls easily within the reason
and rule of the Bridge Proprietors v. The Hoboken Co.,
1 Wall. 116; @ e, “ Where a statute of a State creates
a contract, and a subsequent statute is alleged to impair
the obligation of that contract, and the highest court of
the State construes the first statute in such a manner as
that the second statute does not impair it, whereby the
second statute remains valid under the Constitution of the
United States, the validity of the second statute is ‘drawn
in question, and the decision is in favor of its validity
within the meaning of the twenty-fifth section of the judici-
ary act, and this court may examine and reverse said de-
cree.”

“A party relying on this court for re-examination and
reversal,. . . . need not set forth specially the clause
of the Constitution on which he relies. If the pleadings
make a case which necessarily comes within the provisions
of the Constitution it is enough.”

In its chief feature this case is almost upon all fours with
our own, for in both it was the earlier statute alone which
was construed, and because upon that construction depended
the constitutionality of the later une the Supreme Court
took jurisdiction. it said, page 144: “ But there is a mis-
conception as to what was construed by the State court.
It is very obvious that the statute of 1860 (the latter) was
not construed. No doubt is entertained by this court, none

23

could have been by the State court, that the intent was to
give the defendants the right to build the bridge. The act
which really was the subject of construction was that of
1790, under which plaintiffs claim. For if that act and the
proceedings under it amount to a contract, and that con-
tract prohibited the kind of structure which the defendants
were about to erect under the act of 1860, then the latter
act must be void as impairing that contract. If, on the
other hand, the first act and the agreement under it was
not a contract, or, if being a contract, it did not prohibit
the erection of such a structure as that authorized by the
act of 1860, the latter act was valid because it did not
impair the obligation of a contract. It was, then, the act of
1790 which required construction, and not that of 1860, in
order to determine whether the latter was valid or invalid.”

Now, as matter of fact, the record shows plainly that
there was no express claim of any Federal right whatever
by either of the parties. One claimed a contract by virtue
of the act of 1790, the other a privilege or right under that
of 1860, and the highest court of the State dismissed the
plaintiff's petition; but this court decided notwithstanding
that the constitutionality of the act of 1860 was necessarily
“drawn in question” by the interpretation given by the
decision to the act of 1790.

Perhaps we can better demonstrate how our case falls
within these rules by considering it with special reference
to the remedy which McCullough was following, and the
denial thereof by the decision of the court complained of.
It dismissed his petition.

Now, let it be observed that the origin of this whole con-
tention was the effort of the tax collector to collect from
McCullough, in money, a tax imposed by the general reve-
nue laws of Virginia, notwithstanding his privilege, his im-
munity secured to him by the Constitution, the supreme law
of Virginia, as of the whole land, to pay the same with his
coupons. In this respect, therefore, the case is similar to

Wilmington & Weldon R. BR. Co. v. Alsbrook, and Mobile

24

& Ohio R. R. Co. v. Tennessee, supra, in both of which the
suit arose because of the efforts of the State’s officers to col-
lect taxes under the general revenue laws of the State, as
to which the companies claimed contract immunities. The
result of the decision in the case at bar was that the tax has
been collected in money, and McCullough is deprived of his
claimed immunity, and of his right and privilege to pay in
coupons.

He was pursuing a course with the object of having his
coupons received for his taxes. It was a remedy given to
all holders of these coupons in lien of their earlier remedy
by mandamus, and by this court, in Antoni v. Greenhow,
107 U. S 769, adjudged to be a constitutional and valid
remedy, and as such an inherent right of every coupon, a
part of its contract, which could not be denied the tax
payer. The defence interposed was that the funding bill,
under which the coupons were issued, was unconstitutional,
and that, therefore, the coupons were not “legal coupons
legally receivable for the taxes,” ete., which defence tie
Court of Appeals of Virginia sustained by so interpreting
the State Constitution as to make the said funding bill un-
constitutional—a mode of reasoning somewhat involved, be-
cause the funding bill could not be held unconstitutional un-
less it made a contract, which, according to this decision, it
could not do. The real ratio decidendi was, and must neces-
sarily have been, that the funding bill which made the coupon
did not make it an irrevocable contract, because it could not,
and the plaintiff's petition was dismissed, because the act of
March 7, 1872, Code of Virginia, § 399, forbade that con-
pons should be received for taxes thereafter, thus giving
validity to this subsequent act, which, if the coupon be a
contract, impairs or attempts to impair its obligation. If
the funding bill made a contract, then the act of 1872 must
be vuid as impairing that contract. If, on the other hand,
as the Virginia court said, the funding bill did not make a
contract, the later act was valid, because it did not impair a
contract, and thus the constitutionality of the act of 1872

25

was necessarily drawn in question by the interpretation given
by the decision to the funding bill or the Constitution of
the State.

And observe that there is nothing whatever in the State
Constitution which forbids that a coupon shall be receivable
for taxes, nor was any such construction given it by the
State court. The decision went no further in this respect
than to hold that a contract to that effect could not be
made, 7. ¢., an irrevocable agreement. But such an agree-
ment, revocable at will, might be made, and according to
the court’s decision such an agreement, revocable at will,
had been made, and McOullough’s petition was dismissed
becanse the law of 1872 was thus given effect as a revoca-
tion of the privilege. Such, we submit, is the true logic of the
decision,.and brings us strictly within the rules of Bridge
Proprietors v. Hoboken Co., 1 Wall. 116. “The grounds
upon which the Supreme Court of the State held that the
contract claimed ... wasinvalid . . . in no way affects the
jurisdivtion of this court.” (Afobile & Ohio R. R. Co. v.
Tennessee, 153 U. S. 486.)

But there are other Federal questions involved also. One
of them is presented by the failure of the Virginia court to
give full faith and credit to the repeated former decisions of
this court upon the coupon contract. Such a question, you
have said, is one arising under the Constitution and laws of
the United States, and falls within the jurisdiction of this
court. By your repeated decisions in cases of coupon con-
tracts before you, wherein Virginia or her officers were al-
ways parties, McCullough can now, and by his proceedings
he does, claim a privilege or immunity under the Constitu-
tion or laws of the United States; and that privilege or im-
munity is certainly denied him when the State court utterly
refused to give them any effect. Please observe that, as Mr.
Justice Matthews, in Crescent Live Stock Company v. Butch-
ers’ Union, 120 U. 8. 147, said: “It is within the jurisdic-
tion of this court to determine . . . whether such due effect
has been given by the Supreme Court” of the State to the

26

decisions of the Federal court drawn in question, meaning
that you readily inquire whether the proper effect has been
accorded your prior decrees; and the right to inquire imports
jurisdiction.

The spirit of the rule would, we apprehend, lead the court,
though no specific claim of privilege or immunity under your
prior decisions be set up, when you can perceive from the
scope of petitioner’s pleadings and the State court’s disposi-
tion of his case, especially when its reasons are disclosed in
an elaborate opinion, that your decisions are relied upon as
the bulwark upon which rests the plaintiff's claim, and that
the State court utterly misinterprets those decisions, giving
them, not “due effect,” but absolutely no effect, we submit,
would induce you, with alacrity, to respond to the peti-
tioner’s appeal, who vouches you your own oft-repeated
and impressive utterances, from the language employed
by Mr. Justice Field in Hartman v. Greenhow, 102 U. 8.
679, the first of these adjudications, in 1880: “A con-
tract was thus consummated between the State and the hold-
ers of . . . coupons, from the obligation of which she could
not, without their consent, release herself,” to that masterly
presentation of the entire subject by Mr. Justice Bradley,
in 1889, in McGahey v. Virginia, 135 U. 8. 668, in which
cause he declares that the act of 1871 was a valid act, and
that it constitutes a contract between the State and the
holders of the bonds issued under it, and that the holders
of the coupons of said bonds are entitled to use them in
payment of State taxes. “ This,” he says, page 668, “was
determined in all the cases on the subject”—in all—* that
have come before this court for adjudication.” “This ques-
tion,” adds the distinguished justice, impressively, ‘ there-
fore, may be regarded as foreclosed and no longer open for
consideration.”

McOullough has thus been denied rights under the United
States Constitution, Section 1, Article III., Section 1, Arti-
cle IV., and Section 2, Article VI.; and under Section 709,
Revised Statutes.

27

As already said, it is a general principle of law and of
pleading that one who asserts a claim in court thereby
claims and relies upon every legal right which is his in sup-
port thereof, whether under the general statute, the com-
mon law, or the law as interpreted and established by the
decisions of those courts which are the ultimate expounders
of the laws of this country. If so, then McOnllongh, when
he filed his petition below to procure the specific perform-
ance of his coupon contract, which he did subsequent to the
decisions of the Supreme Court to which we refer, thereby
asserted, and claimed, and relied on a right, privilege, or
immunity, and exercised an authority secured to him by
these decrees, and, therefore, by and under the Constitution
and laws of the United States.

These decrees and authority were that all holders of
coupons had an absolute contract right to pay their taxes
therewith, which included the right to resort to and avail
themselves of the identical legal procedure which McOul-
lough adopted to procure the execution of their contract,
and could not be lawfully deprived of either, and that both
contract and the right to the remedy were protected by the
Constitution and laws of the United States. (Antoni v.
Greenhow, 107 U. 8. 769, and McGahey v. Virginia, 135
U. S. 662, and cases cited.) The Virginia court, in its
opinion, which in Virginia is made part of the record, refers
to, and in terms interprets, these decisions adversely to the
plaintiff, and in terms makes its interpretation the ground
of dismissing his petition (and that, too, without requiring
restitution to him of his money and his coupons which he
had given to the collector, in order that he might avail him-
self of this remedy), and of its decision that he had no con-
tract and no remedy at all. We respectfully and earnestly
submit that, as the mere claiming a Federal right, even
though the claim be ignored by the State court, or be color-
able only (Smith v. Greenhow, 109 U. 8. 671), would
present a case within the jurisdiction of the Supreme Court
to review, the actual adjudication of such a right by the

28

State court should also suffice, whether expressly claimed or
not. For often might it occur, as in fact it did occur in the
case at bar, that the plaintiff would have no suspicion what-
ever that any Federal right of his would be denied him by
the Court of Appeals, and he would, therefore, have no
thought to specifically assert any claim to any of his Federal
rights, and yet the court might itself introduce such a ques-
tion into the record as the Virginia court did here, and de-
cide it adversely to him. So that, if the rule limits appeals
to cases in which the Federal right was actually claimed in
the trial court (it could not be claimed in the Court of Ap-
peals, that being a court for appeals only), the petitioner
would have no redress whatever, although a right of the
most sacred character, one secared to him by the Constita-
tion and laws of the United States, had been denied. And
observe, that if the Federal question be one concerning “an
authority exercised under the United States,” it is not re-
quired by the judiciary act that it be “specially claimed.”
In Dupasseur v. Lochereau, 21 Wall. 130, Mr. Justice
Bradley said for the court: “ Where a State court refuses
to give effect to the judgment of a court of the United
States rendered npon the point in dispute, ... . a ques-
tion is undoubtedly raised, which, under the act of 1867,
may be brought to this court for revision. The case would
be one in which a right or title is claimed ander an au-
thority exercised under the United States, and the decision
is against the right or title so set up. It would thus be a
case arising under the laws of the United States establishing
the Circuit Court and vesting it with jurisdiction, and hence
it would be within the judicial power of the United States,
as defined by the Constitution; and it is clearly within the
chart of appellate power given to this court over cases
arising in and decided by the State courts. The refusal by
the courts of one State to give effect to the decisions of the
courts of another State is an infringement of a different
article of the Constitution, to-wit, the first section of Article
IV., and the right to bring such a case before us by a writ

29

of error under the twenty-fifth section of the judiciary act,
or the act of 1867, is based on the refusal of the State court
to give validity and effect to the right claimed under that
article and section.

“in either case, therefore, whether the validity or due
effect of a judgment of a State court, or that of a judgment
of a United States court is disallowed by a State court, the
Constitution and laws furnish redress by a final appeal to
this court. We cannot hesitate, jerefore, as to our jurisdic-
tion to hear this case.”

The above was cited and approved by an unanimons court
in Embry v. Palmer, 107 U. 8. 3, wherein it was decided
that, “ where a State court refuses to give effect to a judg-
ment of the Supreme Conrt of the District of Columbia
rendered with jurisdiction of the case and the parties, such
decision of the State court is a denial of the title and right
claimed under an authority exercised under the United
States and is reviewable by this court. The question we
have to determine is whether the . . . Court of Connecticut
in the decree complained of gave to that judgment its due
effect.”

Again, in 1886, the same question was presented to the
court in Zhe Crescent City, &c. v. Butchers’ Union, &c., 120
U. S. 141, and with like result, and also by an unanimous
court, which decided “whether a State court has given due
effect to a decree or judgment of the court of the United
States is a question arising under the Constitution and
laws of the United States, and is within the jurisdiction of
the Federal courts. . .. The Supreme Court of Louisiana
denied to it not only the effect claimed, but any effect what-
ever.”

It is true that in these three cases the judgments of the
United States courts relied upon for jurisdiction were spe-
cially set up, and rights under them specially claimed. But
the effect thereof is only to make it clear that the Federal
right thereunder was actually denied by the State court, a
fact which sufficiently appears in our case from the opinion

30

of the Virginia court, which bases its decision upon its inter-
pretation of these judgments, and dismissed the plaintiff's
petition accordingly. The whole spirit and intent of the
jurisdictional statutes is to provide for an appeal to Federal
courts whenever Federal rights are denied, and it should
suffice, therefore, if it appear upon the record that such has
been done, no matter how the actual question was brought
into adjudication, for the Constitution and acts of Congress
extend this court’s jurisdiction to rights protected by the
Constitution, from whatever source they spring (ew
Orleans v. De Armas, 9 Peters, 224), and the rights of
the coupon holder under the contract to pay his taxes with
the coupon are guaranteed and secured to him by the Con-
stitution of the United States (Poindexter v. Greenhow, 114
U. 8. 270); and also, when the question raised is upon a con-
tract alleged to be protected by the Constitution of the
United States, it is the prerogative of this court to judge for
itself with regard to the making of such contract (McGahey
v. Virginia, 135 U. 8S. 667.)

In Factors Ins. Co. v. Murphy, 111 U. 8. 738, both parties
claimed rights growing out of Federal judgments, but neither
were specially claimed as Federal righte. The Supreme
Court took jurisdiction, deciding that both parties asserted
rights under the order and sale, and, therefore, rely upon
rights under Federal authority, and as the rights of the
plaintiff were denied by the State court, this court has
jurisdiction.

In the early case of Martin v. Hunter's Lessee, 1 Wheat.
304, this court took jurisdiction to review a decision of the
State court, which refused to give effect to the decree of
this court upon the first appeal therein, upon the ground
that there was drawn in question by such refusal the au-
thority exercised under the said decree, which was an
authority exercised under the United States. It will be
observed that the jurisdiction thus to review this second
decree did not in any manner depend upon the Federal
question involved in the original case, which wasa right or title

31

under a treaty. On the contrary, the second writ of error
bronght up the record of the last decree of the State court
only, which constituted, together with the mandate, the en-
tire record then before the Supreme Court. There was no
claim in this second record of a Federal right which was
denied, but the language of the decree of the State court
abundantly showed that a Federal right had been denied,
and the Supreme Court therefore took jurisdiction. The
construction and interpretation of a decree of the Supreme
Court necessarily involved the construction and interpreta-
tion of the Constitution and laws of the United States,
whence its powers were derived, and this was a Federal
question.

So, upon the same line of reasoning, this court took juris-
diction in Osborne v. The Bank, 9 Wheat. 817, because a
construction of the powers exercised by the bank required a
construction of its charter, and this necessitated an exami-
nation of the laws of the United States, which granted the
charter. Said the court (p. 827): “Every act of the bank
grows out of this law” (the act of Congress which incorpo-
rated the bank], “and is tested by it. To use the language
of the Constitution, every act of the bank arises out of this
law.”

Precisely the same principle applies in the many cases
involving rights claimed under decrees, sales, or appoint-
ments made in the bankrupt or other United States courts,
the theory of the jurisdiction being that a right, title, or
authority claimed under any such decrees necessarily in-
volves an examination of the powers of the courts in question,
and which in turn involves an examination of the Constita-
tion and laws of the United States from which the powers
of the courts are derived. If, as the court said in Osborne
v. Zhe Bank, “ Every act of the bank arises out of the law
of Congress creating it,” is it not likewise true that every
act of a court arises out of the law creating it?

“This court hath jurisdiction to review decisions of the
State courts denying rights claimed under a decree of the

32

United States bankrupt courts.” (WV. 0. 2. R. Co. v. De-
lamore, 114 U. 8. 501.)

Corporations chartered by Congress may remove suits
against them to the Circuit Courts of the United States, on
the ground that such suits arise under the laws of the United
States, because their authority, as that of the Supreine Court,
is exercised under the laws of the United States. (/acific
R. R. Co. v. Myers, 115 U. 8. 14.) Said the court therein:
“An examination of the acts of Congress shows that the
corporations now before us not only derive their existence,
but their powers, their functions, their duties, and a large
portion of their resources, from those acts, and by virtue
thereof sustaim important relations to the government of the
United States.”

The decision in McNulta v. Lochridge, 141 U. 8. 327,
further confirms these views of the grounds of jurisdiction
in the class of cases we are considering. Said the court:
“But while we think the plaintiff in error is not entitled to
immunity by virtue of the statute of 1887, we are author-
ized by Revised Statute, section 709, to review the final
judgments or decrees of a State court where ‘any title,
right, privilege, or immunity is claimed under. . . any .
authority exercised under the United States, and the aunt
sion is against the title, right, privilege, or immunity speci-
ally set up or claimed by either party under such . . . au-
thority,’ ete. Now, as McNulta was exercising an authority
as receiver under an order of a Federal comt, and claimed
immunity, as such receiver, from suit without the previous
leave of such court, he is entitled to such ruling, whether
his claim be founded upon tl.e statute, or upon principles of
general jurisprudence. We regard this as a legitimate de-
duction from the opinion of this court in Pacific 22. 2, Co.
v. Myers, 115 U. 8. 1,” which was, that to give effect to . de-
cree necessitated an examination of the laws which created
the court.

It is, perhaps, quite worth while to recall that the words
“immunity under the Constitution” and “anthority under”

33

the United States were words of enlargement of jurisdiction
in the act of 1867, added thereto because of the amendments
to the Constitution, and for the distinct purpose of bringing
within the jurisdiction of the United States courts all and
every Federal right enjoyed by every citizen of the United
States. It is also well to remind the court that in Poindex-
ter v. Greenhow, 114 U.S. 276, you have said that the rights
of the coupon-holder in and to his contract are guaranteed to
him by the Constitution of the United States, are secured
to him by that Constitution. “He is free from all further
disturbance, and is securely shielded by the Constitution in
his immunity.” And yon also said that, should he be as-
sailed, in violation of these rights, the grounds of the pre-
sent judgment would be his perfect defence. And as that
defence, made in any cause, though brought in a Strate
court, would present a question arising under the Constitu-
tion and laws of the United States, it would be within the
jurisdiction of this court to give it effect upon a writ of error,
without regard to the amount or value in dispute.”

The judgments of the Supreme Court must be final and
conclusive, because the Constitution invests that tribunal
with the power to decide, and gives no appeal from its de-
cisions, which are, therefore, the supreme law.

You have considered the contract over and over, after
hearing again and again arguments from the most eminent
members of your bar in support of every defence that their
ingenuity, learning, and research could devise, oftentimes
assisted by the reasoning of many of your associates, in dis-
sent. It cannot be presumed, therefore, that you have not
also, in your own deliberations, given due weight to the de-
fence now suggested by the Virginia Court, for you have
said that you have finally determined that the contract is
legal and can no longer be questioned. Surely, then, unless
your words are to be treated as without meaning, and the
decisions of this great tribunal, this supreme lawgiver, whose
decrees the State of Virginia hath, in ratifying the Consti-
tution of the United States, made the supreme law of the

34

State of Virginia, anything in her Constitution and laws to —
the contrary notwithstanding, and the supreme duty of all
her judges to enforce and obey, arc to be regarded as “ trifles
light as air,” the questions herein must be considered as for-
ever closed and at an end.

‘it On tHe Merits.

This case, like many others which have been exhaustively
argued and decided in this court during the last twenty
years, arises upon certain tax-receivable coupons issued by
the State of Virginia, and is an unexpected continuation of
a controversy nade by the State in the effort to avoid the
obligation of the contract thus made. It does not present
any features or defence which have not already been passed
upon by this court, and which it has said more than once
have been finally settled, and are no longer open to contro-
versy. The sole question is, is or is not the coupon a con-
tract. You have over and over again decided that it is, and
so, also, has the Court of Appeals of Virginia until now,
when, for the first time, it decrees that it is not. The last
determination of this matter in this court was in 1890, when
there was argued and decided a group of eight cases, known
as the Virginia coupon cases, and which are reported in
135 U.S. 662 under the title of McGahey v. The State of
Virginia. In these Mr. Justice Bradley delivered the unani-
mous decision of the court, and as he then took occasion in
his own matchless manner to present a connected resumé of
the history, the legislation, the litigation, and the decision
of this long-protracted contention, which is, of course, a far
better argument in support of your decisions than we can
ever expect to make, we are content to refer the court
thereto, without further effort on our part to convince you
that your decisions were right. Suffice it to say, that after
all this resumé and re-examination the conclusion arrived at
was “that the provisions of the act of 1871 constitute a con-
tract between the State . . . and the holders of the coupons
issued . . . in pursuance of said statute.”

35

And let it not be forgotten in this connection, that while
there was not unanimity upon other points in some of the
previous decisions, there had never, since the first case in
the Virginia court, been any difference of opinion what-
ever as to validity of the coupon contract. In McGahey’s
Case, 135 U. 8. 685, the court said that there “may be
exceptional cases of taxes, debts, dues, and demands due
the State, which cannot be brought within the operation
of the rights secured to the holders of the . . . coupons
of the acts of 1871 and 1879. When euch cases occur,
they will have to be disposed of according to their own
circumstances and conditions.” And proceeding to con-
sider two of the allied cases then being heard all to-
gether—Huckles’ and Vashon’s—the court decided that
these were of the exceptional cases, and that the license tax
and the school tax involved in them were not payable with
coupons. And then, doubtless, anticipating the conclusion
which the Virginia court now draws, expressly negatives it,
saying that the principles involved in the case of Vashon do
not affect the capacity of the coupon to pay the general tax
for carrying on the government.

The Virginia court decrees that in view of “the above
decision, we declare the whole coupon contract absolutely
illegal and void,” and yet “the above decisions,” as we have
shown, expressly declare that, except as to the school and
license taxes, it is a valid contract, and not at all af-
fected by the withdrawal from its scope of the excepted
taxes named. Its effort to apply the principles of the
laws of contract is, if possible, more erroneous still, and the
cases cited to sustain the conclusion are, save one, utterly
inapplicable, as the excepted one abundantly proves. The
contract is indivisible, says the Virginia court, and illegal in
part, and is, therefore, illegal altogether; and yet in the
same breath almost, it declares that it is divisible, and the
part thereof which promises the payment of money is not
affected by the vicious part —— to receive coupons in
payment of taxes.

36

In its confusion the Virginia court confounds the consider-
ation given for a promise with the promise itself. It says that
the consideration for the promise being illegal, the promise
is void; but this, also, is the converse of what you have de-
cided (p. 716), for in the same, McGahey v. Virginia, in
Vashon’s Case, you distinctly said that a good and valid con-
sideration had been given for the coupon promise, and that
the Virginia court erred in holding otherwise, as well as in
deciding, what yousaid it did in that case, 7. ¢., that the
funding bills were unconstitutional. Thus, in effect, you
anticipated and decided in advance the very question now
before you. '

Being yet confused, it forgets the well-known distinction
which the law makes between contracts mala in se and those
mala prohibita, and which Mr. Justice Story thus explains in
United States v. Bradley, 10 Peters, 343: “ That bonds and
other deeds may, in many cases, be good in part and void for
the residue when the residue is founded on illegality, but not
malum in se, isa doctrine well founded in the common law,
and has been recognized from a very early period. The
doctrine has been maintained, and is settled law at the
present day in all cases where the different covenants and
conditions are severable and independent of each other, and
do not import malum in se. There is no solid distinction
in cases of this sort between bonds and other deeds contain-
ing conditions, covenants, or grants not malum in se, but
illegal at the common Jaw, and those containing conditions,
covenants, or grants illegal by express prohibition of statute.
In each case the bonds or other deeds are void as to such
conditions, covenants, or grants which are illegal, and are
good as to all the others which are legal and are unex-
ceptional in their purport. The only exception is where
the statute has not contined ite prohibitions to the illegal
conditions, covenants, or grants, but has expressly or by
necessary implication avoided the whole instrument to all
intents and purposes.”

In Gelpecke v. Dubuque, 1 Wall. 222, Justice Swayne.

37

said for the court, speaking of the objections made: “They
relate to certain provisions of the contract claimed to be
invalid. COonceding them to be so, they are clearly separa-
ble and severable from the other parts which are relied
upon. The rule in such cases, where there is no imputation
of malum in se, is that the bad parts do not affect the good.
The valid may be enforced. That part of the complaint
only which relates to the stipulations claimed to be valid
will be considered.”

The coupon contract made by the State is the act of the
sovereign, and if part be found inapplicable to certain taxes,
the necessary conclusion must be that such was the sove-
reign’s intention as to such part, but not as to the resi-
due. If otherwise, and the contract be now construed to
be wholly void by any principle of common law, as above
indicated, this would be to hold the common law superior to
the statute, whereas the true construction should be that any
such principle of common law is impliedly negatived by
the statute which made the voupon. The coupon statute
may be held void as to the school tax because of the consti-
tutional provision, which is the supreme law, but the common
law is not supreme, and what a statute says may be done
cannot be defeated by any principle of common law.

There is no question here of any illegality of the consid-
eration given for the promise contained in the coupon, for
that consideration was simply the surrender by the bond-
holders of their bonds to the State, who gave them, in lien,
others of lesser amount and interest. But the illegality
as charged is found in the contract of the coupon alone, the
promise. The citations by the Attorney-General showing the
effect upon the promise of a consideration void or unlawful
in part have, therefore, no application at all to the matter
under consideration, and those which he names on pages 25
and 26 of his brief abundantly demonstrate the error of the
decision he seeks to defend. They say, “when, however, for
a legal consideration a party undertakes to do one or more
acts, and some of them are unlawful, the contract is good for

38

so much as is lawful, and void for the residue.’ Whenever
the unlawful part of the contract can be separated from the
rest it will be rejected and the remainder established.” The
remainder of the quotation refers to the effect upon the pro-
mise of an unlawful consideration, but there is no question
of the consideration here save in the misapprehension of the
Virginia court.

In Addison on Contracts, Vol. I., page 1169, note 1, the
following is stated as the law: “The general doctrine is that,
if the promise and the consideration are each entire, and
the consideration is even in part illegal, the contract is void.
But when the contract consists of two or more distinct parts
which are readily separable, and not in any material sense
dependent on each other, one part being valid and the other
void, the rule is to enforce that part which is valid. In like
manner, a lawful promise is not necessarily impaired by be-
ing joined in a contract with an unlawful one, provided the
two can be separated ; in other words, a person who, upon a
good and valid consideration, promises to do two things, one
legal and the other illegal, will be bound to the perform-
ance of the former, unless the two are so intermingled that
they cannot be separated.”

Your decision in MeGahey v. Virginia, supra, that school
and license taxes may be withdrawn from its operation with-
ont impairing its effect upon other taxes, necessarily deter-
mines that they can be so separated, which, also, so abun-
dantly appears from the terms of the promise itself ; it is to
be ‘received, it says, in payment of “all taxes,” etc., mani-
festly meaning “any”; and, besides, the courts have time
and again decided that it may be separately executed as to
dues, or any of the various kinds of debts included in the
comprehensive language employed—fines, license taxes, coste
of suit, and any monetary demand whatever which the State
may make. And, in fact, the statute of 1884, construed in
Vashon’s Case, supra, has effectively and easily so arranged,
and has separated the promise, as to the school tax, from the
residue, without embarrassment or difficulty.

39

The Attorney-General, on the 8th and 9th pages of his
brief, maintains that the repeal by Virginia, on February 21,
1894, of the laws ander which McCullough instituted his suit
in the Circuit Court of Norfolk necessarily puts an end to
this proceeding, and that no further steps can be taken
therein. But such was not the opinion of the Court of Ap-
peals of Virginia, for the decree of which we complain was
entered in favor of Virginia nearly thirty days thereafter,
March 15, 1894. The cases cited by our learned opponent
in this respect by no means bear him out; for while the re-
pealed acts did give jurisdiction to the lower court, the ap-
pellate tribunals were in no sense dependent upon them for
their jurisdiction, and therefore their repeal could not affect
cases pending at their bar. McCullough’s case, it is true, had
been in the Circuit Court by reason of the permission given
by the State; but it was in the Court of Appeals by the
act of the State itself, and not at all by virtue of any of
the repealed statutes. The State, having thus voluntarily
become the actor in that tribunal, is subject to all the rules
of process and pleading applicable to any other litigant.

We do not for one moment deny that the general rule is
that the repeal of statutes giving jurisdiction terminate all
proceedings pending thereunder; but there is a well-known
exception of no less weight and authority excluding all
cases where rights have vested, and this embraces McCul-
lough’s case, it having gone to judgment two years before the
act of repeal; and, besides, he had given valuable consid-
eration for the. privilege he was exercising of verifying his
coupons, having fully complied with the conditions imposed,
and given to the collector both money and coupons.

Said the court in Steamship Co. v. Joliffe, 2 Wall. 457:
“When a right has arisen upon a contract authorized by
statute . . . the repeal of the statute does not affect it
or an action for its enforcement. It has become a vested
right, and stands independently of the statute.” -

“Vested rights acquired by a creditor under and by vir-
tue of a statute of a State granting new remedies, or enlarg-
ing those which existed when the debt was contracted, are

40

beyond the reach of the Legislature, and the repeal of the
statute will not affect them.” (Memphis v. United States,
97 U.S. 293.) in

- It will be observed that this repealing act was passed
February 21, 1894. Its language is given at the foot of
page 9 of the. Attorney-General’s brief. The decree com-
plained of here was entered March 15, 1894 (Record, p. 10),
and validity is thereby given to the repealing act, which
takes away from holders of these coupons the sole remedy
they have to enforce their contract. But this you have de-
cided, in Antoni v. Greenhow, supra, cannot be done.
Therefore the claim of the Attorney-General that you should
give effect to the repealing act clearly raises another Federal
question for your jurisdiction, you being asked to give ef-
fect to an act clearly of the class which you have hitherto
determined is obnoxious to the Constitution and laws of
the United States.

It is quite true, as the Attorney-General says, that the
effect he claims for the repealing act has been given it by
the Court of Appeals of Virginia in Maury’s case, decided
in December, 1895 (23 Southeastern Rep. 757). But that
was a case still pending below when the repeal was passed.
If the law be as the Attorney-General contends, it was also
so when the McCullough decision was rendered; and that it
was not then thus applied is another of the many evidences
found throughout this record of the attempt of the Virginia
court to evade the decision of the Supreme Court that the
contract is valid and protected by the Constitution, and de-
stroy it utterly by a decision which this court would not
have jurisdiction to review. If McCullough’s petition had
been dismissed because of this repeal, which deprived him
of all remedy under his contract, there could be no question
of your right to review.

It seems to us impossible for this court, after the many
times it has held that these coupons are binding contracts,
to hold now that they are void, and therefore we do not
deem it necessary to discuss these matters further.

Very respectfully
F Bfog
~ RAAAY

a

A. A. McCULLOUGH,
vs. -
THE COMMONWEALTH OF VIRGINIA.

Reply Brief of
R. L. Maury & M. F. Maury, ©
For the Plaintiff

SUPREME GOURT OF THE UNITED STATES.

OCTOBER TERM. 1897.
No. 19.

A. A. McCULLOUGH, Plaintiff in Error,
vs.

THE COMMONWEALTH OF VIRGINIA,
Defendant in Error.

Reply of R. L. Maury and M. F. Maury, Counsel for
Plaintiff in Error, to the Supplemental Brief of
R. Taytor Scort, Esq., Attorney-General of Virginia,
and further argument as required by the court.

Before proceeding to the further argument of this case
which the court has directed, we will first make brief reply
to the three contentions of the supplemental brief of our
lamented brother, the late Attorney-General of Virginia.

That distinguished and faithful officer, whose sudden
death every Virginian deeply deplores, has insisted that
this case should be dismissed because the court has not
jurisdiction to review the State court herein, no Federal
question having been decided, inasmuch as the State
court’s interpretation of its own statute must be followed
by this court; because, further, that the decision of the
State court is without error, and consequently all that you
have hitherto decided concerning the legality of these Vir-
ginia coupons is wrong; and lastly, because this is, what
he calls, a moot case, inasmuch as the statute authorizing
the proceeding from which it has grown has been repealed,
and the privilege of suing the State withdrawn.

2

But for the courtesy due, and which we willingly accord
to the memory of our eminent brother, we would not deem
it necessary now to make direct reply to these contentions,
because we have anticipated and answered them already
in our previous brief. We content ourselves, therefore,
with saying, at this moment, that the rule relied upon
in support of the first contention has never been applied
to a case wherein the Supreme Court had already con-
strued the statute in question. By comity alone it is that
the Supreme Court will adopt the State court’s construction
of its own statute; but this can only be when the Supreme
Court has not already made its own construction, in which
event whatever of comity there be requires that the State
court should adhere to what it has heretofore decided, and
follow the decision of the Supreme Court, which by comity
hath made the earlier State decision its own. This feature
in the case at bar, that the Supreme Court had already it-
self decided the question which the State court decided
(differently), differentiates it in toto from every one of those
cited by the Attorney-General in support of the contention.
The latest (Bacon v. Texas, 163 U.S. 208) which he cites
clearly has no application, there being no judgment of the
Supreme Court in question as here, and no unconstitutional
statute of the State given effect as the de¢ision now ap-
pealed from does. Indeed, it is expressly stated in Bacon
v. Texas, as reason for the conclusion reached, that there
was no such statute validated by the deciston appealed
from. The presence or absence of a Federal judgment or of
an impairing statute has, in a multitude of cases, many of
which are set down upon our briefs, been made the ground
of this court’s conclusions.

The second contention is that upon the merits the State
court’s decision is right, and therefore that all that has
hitherto been decided in this court and in the Court of
Appeals of Virginia concerning the validity of these cou-
pons is totally wrong. After the years of labor and in-
vestigation which have been given to this subject by the
most astute and intelligent members of this bench and of

3

the Supreme bénch of Virginia, and of their bars, we feel
confident that such a contention cannot prevail, and that
we need not answer further than to quote, as we have al-
ready done, your last determination (McGahey v. Virginia,
135 U. S. 662), that the provisions of the Funding Bills of
Virginia do constitute a valid and binding contract between
the State and the holders of the coupons issued in pursu-
ance thereof, and that this is finally settled and no longer
open to controversy.

The third contention is also without force. This isin no
sense a “moot case,” for the writ of error acts not upon the
parties, but only upon the record, and no affirmative relief
is asked against the defendant. When the State of Vir-
ginia appealed the case to her Court of Appeals, it became
her own case, she was‘then the actor, and the suit was no
longer one against the State within the meaning of the pro-
hibition of the Constitution of the United States. (Cohens
v. Virginia, 6 Wheat. 610.) The repeal of the Act under
which this proceeding was commenced in the Norfolk court
by McCullough, which the Attorney-General relies upon to
defeat this appeal, was made before the appeal of the State
had been decided by the Virginia: court, who, according to
the present contention, ought to have dismissed the State’s
appeal instead of retaining it, as was done, and deciding
it in her favor. But we have already shown that such a
repealing statute does not affect pending causes, where
rights have already vested. (See the last two pages of our
previous brief.)

Before commencing the further argument which the
court has called for, we beg to commend to your consid-
eration that incomparable opinion delivered by the la-
mented Justice Bradley for the whole court, to which we
have already referred, in McGahey v. Virginia, 135 U. 8.
662, which in the clearest manner possible gives a full and
complete history of this prolonged and complicated conten-
tion concerning the State’s obligation to her creditors. It
is a full and exhaustive review and analysis of all the many
decisions in these cases, and presents a summary of the

4

propositions established, which, said that learned Justice,
can no longer be questioned or denied, the first of which
is, that the provision of the “Act of 1871 constituted a
contract with the State of Virginia and the lawful holders
of the bonds and coupons issued under and in pursuance
of said statute.” And great weight is added to the justice
and force of the conclusion then reached, when it is remem-
bered that the consideration exacted from her creditors by
the State, and given, which she still retains and enjoys,
for the tax-receivable feature of their coupons was the
surrender to her upon request of what, if not surrendered,
would, principal and interest, now exceed seventy-five mil-
lions of dollars, in exchange for which they accepted less
than twenty-five millions, bearing interest at a lesser rate.

The case hath its origin by reason of the persistent ef-
forts of the government in Virginia to escape performance
of her promises, for which she received and is enjoying
this large consideration, and to devise a means of avoiding
the obligation of this contract made with her creditors in
return for their release, at her request, of the greater part
of what was due them. Although time and again this
court, and her own courts too, have decided that the con-
tract is valid and binding, both in law and morals, and that
the repeated legislation to nullify and destroy it is uncon-
stitutional, null and void, these unworthy efforts, to which
nearly all the creditors have been compelled to submit,
still continue against the few—her own citizens—who can-
not do so.

In 1871 the interest upon the State’s bonds being largely
in arrear, and there being no prospect of funds to meet the
annually accruing instalments, a Funding Bill was passed
by the Legislature, appealing to creditors to surrender their
evidences of debt, to release one-third (for which they
might look to West Virginia), and to accept in lieu a new
bond (for two-thirds), whose coupons should be taken in
payment for all taxes due the State. The request was
promptly granted, and in a short time the greater portion
of the debt, some twenty-seven millions of bonds and in-

5

terest, was surrendered, and eighteen millions of the new
bonds, with the coupon, as promised, accepted in exchange,
and the entire amount would have been so funded but that
the bill was repealed.

_ But the revenues were still insufficient to meet even the
amount of interest thus reduced. Parts of the maturing
coupons were paid during the first year, after which pay-
ments ceased altogether, and have never been renewed.
In order to realize something of their accruing interest,
creditors availed themselves of the tax-receivable feature
of their coupons, and sold them to Virginia tax-payers,
who used them for the payment of their taxes. Such use
soon became so general that the larger part of the State’s
revenues were thus paid, whereupon an Act was passed
(March 7, 1872) that they should be no longer so received.

Upon this Act the celebrated case of Antoni v. Wright,
22 Grat. 833, arose, wherein the Court of Appeals of Vir-
ginia decided that the law under which the coupons were
issued constituted a contract which the State could not
rescind. Except for several unsuccessful efforts to exclude
from its operation some special kinds of taxes or dues,
which resulted in unvarying affirmation of Antoni v.
Wright, the decision was accepted as a finality, and for
twelve years or more these coupons, aggregating annually
very large amounts, were taken freely from all who offered
them; a regular custom was established throughout the
State for tax-payers to buy them from bondholders at a
small discount, who thus in effect and indirectly received
their interest each year, and laws were passed recognizing
and regulating their sale, and providing for their registra-
tion and safe-keeping after reception.

And not only so, but in 1879 creditors were again asked
to remit a portion of their dues and again take new bonds
with coupons, ta.r-receivable as before, but at only half the
interest rate, which was done, and the exchange largely
made.

Thus there are two issues of these tax coupons, both of
which were tendered in the case at bar, and both of which

6

the Supreme Court has decided are valid, binding con-
tracts, whose holders are shielded and protected in their
rights thereunder by the Constitution of the United States.
Firmly founded as are the first, the latter are still more so,
issued, as they were, so long after all these decisions were
made and recegnized and observed, it being a familiar rule
of construction recognized by the Virginia courts that
where a statute has been construed by the courts, and
subsequently re-enacted by the Legislature, it is an affirm-
ance and acceptance of the court’s decision. (Anable’s
Case, 24 Grat. 563; Mangus v. McClelland, 93 Va. 789.)
There can be no hesitation in saying that the rights of
their owners are to be determined in this court according
to the law as it was judicially construed to be when these
bonds and coupons were delivered to them, or put upon
the market as commercial paper. (Burgess vy. Seliginan,
107 U.S. 20.)

In 1884 a law in the same words as that of 1872, which
forbade the acceptance of these coupons for taxes, and
which Antoni v. Wright decided was unconstitutional, was
passed again, forbidding the reception of aught but money
in payment of taxes, and in 1887 it was included in the
Virginia Code adopted that year. (See. 399.)

When the coupon contract was made, a remedy for its
enforcement was by writ of mandamus from the Supreme
Court of Appeals direct. In April, 1882, this remedy was
withdrawn from holders of coupons. (See Code of Vir-
ginia, See. 3086.) .

On January 14, 1882, another remedy to secure perform-
ance of this contract in effect was provided by the Legisla-
ture. It is (Secs. 406 and 407, Code of Virginia) given in
full on page 1 of this Record, and generally called the
“Verification Act.” The mandamus repeal left this the
sole remedy available to coupon holders, and it so re-
mained until repealed in February, 1894. If its repeal be
valid, then the coupon holder is left now without any
remedy at all for the enforcement of his contract, although
when the contract was made there was an easy, complete,

7

and efficacious one by mandamus. The mandamus repeal
and the Verification Act were construed by this court in
Antoni v. Greenhow, 107 U.S. p. 770, wherein it was de-
cided that there could bé no longer any question as to the
validity of the coupon contract; that any act of the State
prohibiting the receipt of these coupons for taxes is void,
and that the remedies in force when the contract is made
are parts of it, and cannot be lawfully taken away unless
others of equal efficacy remain. Manifestly, then, the Act
repealing the Verification Act is invalid, for that was the
only remedy then left to coupon holders, and none was
given in its place.

There was also, and all the time has been in force, the
general revenue laws of the State, imposing taxes and requir-
ing collectors to levy for them if not promptly paid.

. Such were the laws and decisions when the plaintiff in
error tendered his coupons (of both issues) in payment of
his taxes (except that the Verification Act had not then been
repealed), which were refused by the collector by authority
of the Act above recited, which forbade the reception of
aught but money in payment of taxes, and thereupon and
solely because of this refusal, and of these acts, which he
relied upon as his authority, this case arose. Plainly but
for them he would have taken the coupons when offered,
as this court and the Virginia courts had unvaryingly decided
it was his duty to do so, and as had been the uniform
custom for years before these acts were passed.

But he refused them and required the tax to be paid in
money, being commanded otherwise to levy, and the cou-
pons were delivered to the court for judicial determination
whether they were genuine and legally receivable for taxes.
This inquiry was manifestly one of fact only, for it was to
be determined by a jury, /. ¢., whether or not the coupon
was genuine. There was no question of their legal receiva-
bility for taxés, if genuine; the statute under which they
were being examined by the jury distinctly recognizes them
as receivable, if genuine. If there were question of this, it
being of legal import was not matter for a jury, and, there-

8

fore, not to be heard in this case, being a statutory jury
proceeding, and, therefore, confined to the issues proper
for a jury to determine. The words “legally receivable
for taxes,” where they occur in the Act, are but words of
_ description of the coupon ; there being many others of Vir-
ginia issue which do not bear these words, and which,
therefore, were not to be included in the provisions of this
“Verification Act.” (See Stuart v. Virginia, 117 U.S. 612.)

Thus the case at bar commenced, as the Verification Act
provides; the trial court found that the coupons were
genuine and legally receivable for taxes ; the State appealed,
and the Court of Appeals, without question that they were
genuine, decided that they were invalid altogether in re-
spect of their tax-paying power; whereupon the plaintiff
in error asked and obtained this writ.

The question now is, are the coupons tax-receivable ?
The trial court, following the Supreme Court, said “yes.”
The Court of Appeals, “no.”

With the reason that the latter gave for its decision the
Supreme Court has no concern; it regards the actual de-
termination only, to-wit, that these coupons are not tax-
receivable. P

It is nowhere pretended that they were not issued by the
State, and under authority of the several funding bills, and
are not promised to be received for taxes. Nor is it any-
where alleged, directly or indirectly, that there is aught
unlawful in such a promise if a mere promise or privilege
revocable, if but a spontaneous concession on the part of
the Legislature, not constituting a contract, and which may
be revoked at will. The same words are found upon the
treasury notes of the United States. It therefore follows
that if the coupons be not now receivable for taxes, which
is the conclusion and decision of the Virginia court, such
can only be because that privilege has been lawfully with-
drawn, or, in other words, because the law forbidding their
reception is valid. But you have decided that this law is
invalid. Stripped of all subterfuge and deviation, this is
the true logic of this startling decision. And the same

9
conclusion follows from the major premise of the Virginia
court. It decided that the coupon is not a contract—is
altogether void; therefore the subsequent Act forbidding
its reception for taxes impairs no contract, and so is valid.
But the Supreme Court decided that the coupon is a con-
tract, and that the subsequent Act is invalid.

Whether the decision be logically considered or taken
illogically, upon the Virginia court’s own statement, if
allowed to stand, it inevitably and necessarily validates
the statutes revocatory just described. In like manner and
for the same reasons it also validates every one of the
many statutes attacking the coupon contract, all of which
are valid if it be no contract, and invalid otherwise. It jus-
tifies the act of the collector, under the authority of the
State, refusing to accept the coupons offered him, although
the Supreme Court has decided that it was his duty so to
take them; and basing its decision upon the full faith,
credit and effect which the Constitution requires for the
proceedings of its Supreme Court, it has regard to but a
part of the decision, and gives that part effect to destroy
that contract which the whole decision determined was
legal and binding, and could not be rescinded, altered or
impaired.

And besides, these many assaults upon the rights of
coupon holders have been so repeatedly and for so long
a period by all the courts, both State and Federal, de-
cided to be obnoxious to the Constitution of the United
States, that a rule of property has been thus established
which none but this court has power to overturn.

In arriving at its conclusion, which thus validates these
laws which you have declared are unconstitutional, the
Virginia court construes, and says it gives effect to, the
last one of your decisions concerning these coupons;
and yet it is now said you have not jurisdiction to hear
the cause which thus pretends to give effect to your de-
cree. It is impossible to credit that the machinery of
the government is thus defective, for wherever there are
rights of the citizen of the United States, there must

10

go the judicial power of the United States to protect them
from invasion or destruction (9 Wheaton, 91); and it can-
not be that the framers of the Constitution failed to pro-
vide that such a decision should be reviewed by the Su-
preme Court. If otherwise, consequences of such mo-
mentous import. would result, that the mere suggestion by
counsel so distinguished, however groundless we may deem
it, imposes upon us a task of careful consideration and la-
borious demonstration which we would willingly avoid if
we might, and but for which we would be content simply to
reply that it is incredible that the Constitution and laws of
the United States confer rights upon its citizens, and yet fail
to provide for their protection and enforcement by its courts ;
that there is no remedy when these rights are invaded; or
that the relations between the Supreme Court and the
State courts are so ill-defined and imperfect that the latter
may disregard or pervert at will the decisions and deter-
minations of the law by the former, under the guise of
giving them effect, with entire immunity from its revision.

If this were so, our highest court would be supreme to
the State courts in name only, although created by the
States themsélves to be their supreme and final arbiter for
themselves and their citizens of every right consequent
upon their union; to insure which they have made it the
law of the land, a special provision of the Constitution,
that their courts and judges should give its judgments full
faith and credit, and yield to them that absolute obedience
and respect due to the supreme law of the land.

It may be well that the powers vested by the Constitu-
tion are not always perfectly described; it was impossible
that they should be.

A constitution establishing a frame of government, de-
elaring fundamental principles, and creating a national
sovereignty intended to endure for ages and to be adapted
to the various crises of human affairs, is not to be inter-
preted with the strictness of a private contract. The Con-
stitution of the United States marks the outlines of powers
granted; but it does not undertake, with the precision of a

11

code of laws, to specify all the means by which they may
be carried into execution. (Legal-tender case, 110 U.S.
439.)

It is made the supreme law of the United States that the
judgments and decrees of this supreme and final arbiter
are to have given them full faith and credit as such, as
final and conclusive determinations of the matters they
have determined and with all the full force and effect that
they have in the court which rendered them, and therefore
those who interpret them and fail to accept them as being
final and conclusive violate the supreme law of the land,
and, the decision being adverse, a case arises under the
Constitution and laws of the United States of which the
Supreme Court has jurisdiction.

The Constitution which the States have made for the
guidance and authority of the general government they
created—giving up certain of their rights to government
for the better security of others—and which was chiefly
the work of three great statesmen, of whom two were Vir-
ginians, subordinates their own highest courts in matters
Federal to the Supreme Court, and imparts to it not only
superiority to them in such matters, but also superiority to
the other members of the governmental trinity, whose ac-
tions also it is empowered to review, overrule, interpret and
expound.

Its authors intended that the judicial powers vested
should be co-extensive with every right or claim which in
any manner should emanate from, or grow out of, the pro
visions of that instrument.

Its language, therefore, in respect of the scope of the
judiciary powers should be taken in its most comprehen-
sive sense, and so as to embrace any and every Federal
right, every right of a citizen of the United States, which
can be traced to the Constitution as its source, even though
it may not appear to be included in any of the special
classes named. Every authority exercised, no matter by
which department of the government, must of necessity
have its origin, directly or indirectly, in the Constitution,

12

which is its primal basis, and therefore any question con-
cerning such authority must be a “ Federal question.”

The word “constitution” is the strongest term in the
language to designate the fundamental law of a govern-
ment. Its law is that there shall be but one Supreme
Court, whose jyrisdiction, original and appellate, is made as
broad as the judicial power itself, and whose supremacy
makes it the final and conclusive authority in all cases and
controversies that it decides. There is no higher authority
to review its decisions, and therefore the law of the Constitu-
tion, and the agreement of the States which made it, is that
the Supreme Court’s judgments are absolute and final law
to all, that they are final and may not be questioned by
any; and being thus by reason of the provisions of the
Constitution, ’tis law that they should be so—law of the
Constitution and of the United States, and therefore, when
decisions are made upon a construction or interpretation
of them adverse to those relying upon them, a Federal
question is made, of which the Supreme Court has jurisdic-
tion.

“The judicial power shall extend to all cases in law and
equity arising under” this Constitution, the laws of the
United States, or treaties made, or which shall be made.
This classification was evidently adopted for the purpose
of emphasis, and not to enlarge or vary the scope of the
judicial power from what it would be if the word “ Consti-
tution” alone were used, which could not be, for the Con-
stitution being the source of all law and power, all cases
which arise under the laws and treaties of the United
States fall within the larger classification of those aris-
ing under the Constitution, just as all “arising under the
treaties” are included in those arising “under the laws.”
There can be no doubt of what is referred to by the words
“Constitution” and “treaties,” but perhaps the expression
“laws of the United States” is not equally clear. If it
only means ‘‘acts of Congress” tis clear enough. But
manifestly it cannot be so limited, as well because at the
time the Constitution was adopted there were no acts of

13

Congress, as because the Coxstitution declared for a much
larger meaning in defining what shall be “the law of the
land.” It is far more extensive than the statutes only; it
means als» the Constitution and all that it prescribes or au-
thorizes, whether expressly or by absolutely necessary im-
plication.

We maintain that this word “law,” thus used, is by no
means intended to be understood as synonymous with
“‘acts of Congress,” but is used in its larger and broader
signification, which Blackstone gives—that is, “a rule of
civil conduct prescribed by the supreme power,” etc.—and,
therefore, includes not only “acts of Congress,’ but acts
of the other grand divisions of the government as well, as,
for example, the proclamations and pardons of the Presi-
dent; his orders as Commander-in-chief; his war measures,
as the emancipation; the declaration of peace; and like-
wise the acts, the decrees, of the greatest of these depart-
ments, the Supreme Court. It being authorized to deter-
mine finally the law in cases before it, its determination
is thus itself made the law; for it is surely a rule of civil
conduct prescribed by the supreme power.

The learned commentator just referred to, after giving
the above definition of “law,” proceeds to explain that the
term “laws of England” includes the written and the un-
written laws of the kingdom, or parliamentary law and
common law; and that part of the latter are the ancient
decisions of the courts.

It is quite true that we cannot sustain our position that
the decisions of the Supreme Court are laws, wherever ap-
plicable, within the meaning of the Constitution, by point-
ing to any express provision therein to that effect. But it
is likewise true that there is nothing whatever therein
which specifically negatives such a contention.

Negation being absent, affirmation should be presumed,
being plainly in accord with, and in furtherance of, the
theory and intent of that instrument, of which there is strong
internal evidence, both negative and positive; for the grant
.of the power and the declaration of supremacy is a declara-

14

tion and a law that the exercise of the power shall not be
frustrated.

A government ought to contain in itself every power re-
quisite to the full accomplishment of the objects committed
to its care and to the complete execution of the trusts for

‘which it is responsible, free from every other control but a
regard to the public good and to the sense of the people.
(Federalist, No. 31.)

Said the great Chief-Justice from Virginia (in WeCul-
lough vy. Maryland, 4 Wheaton, 316): “This government
is acknowledged by all to be one of enumerated powers.
The principle that it can exercise only the powers granted
to it would seem too apparent to have required to be en-
forced by all those arguments which its enlightened friends,
while it was depending before the people, found it neces-
rary to urge; that principle is now universally admitted.
But the question respecting the extent of the powers actu-
ally granted is perpetually arising, and will probably con-
tinue so to arise as long as our system shall exist. In dis-
cussing these questions, the conflicting powers of the gen-
eral and State governments must be brought into view, and
the supremacy of their respective laws, when in opposition,
be settled.

“If any one proposition could command the universal
assent of mankind, we must expect it would be this: that
the government of the Union, though limited in its powers,
is supreme within its sphere of action. This would seem
to result necessarily from its nature. It is the government
of all; its powers are delegated by all; it represents all,
and acts for all. Though any one State may be willing to
control its operations, no State is willing to allow others to
control them. The nation, on those subjects on which it
can act, must necessarily bind its component parts.”

And the following from the same eminent source, spoken
with reference to the legislative branch of the govern-
ment, applies with equal force to the judicial: “We ad-
mit, as all must admit, that the powers of the government
are limited, and that the limits are not to be transcended.

15

But we think the sound construction of the Constitution
must allow to the national legislature that discretion
with respect to the means by which the powers it confers
are to be carried into execution, which will enable that
body to perform the high duties assigned to it in the man-
ner most beneficial to the people. Let the one be legiti-
mate, let it be within the scope of the Constitution, and
all means which are appropriate, which are plainly adapted
to that end, which are not prohibited, but consist with the
letter and spirit of the Constitution, are constitutional.”

These rules have ever since been accepted as a correct
exposition of the Constitution. They were expressly con-
firmed by the court in //ephurn v. Griswold, for whom
Chiei-Justice Chase said that the words “all laws neces-
sary and proper for carrying into execution” powers ex-
pressly granted, or vested, have in the Constitution a sense
equivalent to that of the words “laws,” “not absolutely
necessary,” ‘‘indeed,” “but appropriate,” plainly adapted to
constitutional and legitimate ends”; ‘laws not prohibited,
but consistent with the letter and spirit of the Constitu-
tion” ; “laws really calculated to effect objects entrusted to
the government.”

“The spirit as well as the letter of the law must be ob-
served, and when the whole demonstrates a particular in-
tent, to effect a certain object, some degree of implication
may be called in to aid that intent.” (Phillip’s S. C. Pr. 34.)

And in Story on the Constitution, section 422, these
principles are thus expounded: “A constitution of govern-
ment founded by the people for themselves and their pos-
terity, and for objects of the most momentous nature, for
perpetual union, for the establishment of justice, for the
general welfare, and for the perpetuation of the blessings
of liberty, necessarily requires that every interpretation of
its powers should have a constant reference to those ob-
jects. No interpretation of the words in which these pow-
ers are granted can be sound which narrow down their
ordinary import so as to defeat these objects.”

It is upon the application of these rules-of construction

16

that this court has of latter years recognized as constitu-
tional the exercise of powers far in excess of what was con-
sidered to be their limits before the necessity for their ex-
ercise arose, notably in regard to cases maritime and of
admiralty, of legal tender, of the prize cases, the civil rights
cases, and many others growing out of the changed condi-
tion resulting from civil war, of which jurisdiction was
taken, not being actually prohibited, because of the impera-
tive nature of the circumstances which demanded relief.

It is apparent that the expression “laws of the United
States,” used in conferring jurisdiction, does not mean
“Acts of Congress” only. When that expression was
framed, there were no “Acts of Congress,” and the Consti-
tution itself, in another clause, gives a different definition,
including both Constitution and treaties as sources of
“Jaws of the United States.” There is here much “law
of the United States” which was not made by Con-
gress. For example, there is something of the common
law, there is a deal of equity law, expressly referred to in
the Constitution; there is much of the laws of evidence
which consist in the general principles which the Federal
courts have adopted and established, to be found in their
reported decisions and deliverances, together with such
statutory regulations as Congress has seen fit to enact for
their guidance (Spear, Fed. Juris. 425); laws commercial
and international, and of admiralty, and laws maritime,
which the Supreme Court holds is that general system of
law which was familiar to lawyers and statesmen when the
Constitution was adopted. (The Lottawanna, 21 Wall.
558.) There is also martial law, the President’s proclama-
tions and war measures (20 Wall. 626), and the laws of the
States when administered by the Federal courts in the
States whose construction of State statutes are thencefor-
ward part of the State statute itself, and as such State and
Federal law both. There are the rules of pleading and
practice adopted by the Supreme Court. Its decisions, too,
are law to the parties, and when repeated and reiterated
become laws of property, and if of a general and public

17

character, as, for example, that a statute be constitutional,
or a power invalid, are law for all who claim thereunder
that the statute is constitutional, or the power invalid.

Manifestly, then, the expression “laws of the United
States” cannot mean “acts of Congress” only. It embraces
them of course, but also much other law from other sources.
It means the rule of civil conduct prescribed by the supreme
power in the United States ; and is synonymous with the great
word “constitution,” designating all fundamental law, all
the law of the land, all the rules of civil conduct prescribed
by the supreme powers. It is made the duty of the Presi-
dent to take care that the laws be faithfully executed (Article
II.), which he assumes by his oath of office, whose words
“to preserve, protect, and defend the Constitution,” are
deemed all-comprehensive, because all law emanates from
the Constitution and its provisions, and if it be “ preserved,
protected, and defended,” all that it commands and directs
will of necessity be faithfully performed. For the same
reason, and that the greater includes the less, the Act of
Congress of June 1, 1789, considers that the oath, “to
support the Constitution of the United States,” required of
all Federal and State officers, is all-sufficient.

If “acts of Congress” alone were meant by the expres-
sion, “laws of the United States,” would not the former
expression have been the one used, and invariably used,
whereas we find in the Constitution that laws are some-
times called “regulations of commerce,” sometimes “rules
of naturalization,” “laws of bankruptcy,” “laws of the
Union,” ete.?

This larger meaning of the word “law” in the provision
that “no State shall pass any law impairing the obligation
of contracts” has, in effect, been adopted’ by the Supreme
Court and in the Judiciary Act. (Rev. Stats., Sec. 709.)

As Congress may not enlarge the jurisdiction of this
court beyond what the Constitution confers, the language
of the Judiciary Act is to be understood in this respect as
simply defining the scope of the jurisdiction conferred
by the Constitution, and, therefore, its provision for writs

18

of error to State courts in cases of contracts and impair-
ment is but a definition of what the provision means. The
Constitution says that the contracts shall not be impaired
by State law, but the Judiciary Act uses the words “statute
of, vr an authority exercised under any State”; that is to
say, that any eyasion or denial of contract rights by any
functionary of a State, for which authority, real or pre-
tended, from one or the other of the departments of the
government is claimed, is an impairment of the contract
within the meaning of the Constitution, and the

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386018_0196%3A3. Public record. Not legal advice.