« ΠροηγούμενηΣυνέχεια »
not covered by that judgment. In that case the plaintiff in error was seeking to compel the officer specifically to receive his coupons in payment of taxes by mandamus, on the ground that he was entitled to that remedy when the contract was made by the law of March 30, 1871. The law giving that remedy was subsequently amended, requiring the petitioner to pay the taxes in money in the first instance, and permitting the writ to issue only after a trial, in which the genuineness of the coupons tendered had been established. The court held that he might have been put to the same proof in the former mode of proceeding, and that the amendment did not destroy the efficiency of the remedy.
But here the plaintiff did not seek any compulsory process against the of ficer to require him specifically to receive the coupons tendered. He offered them and they were refused. He chose to stand upon the defensive, and maintain his rights as they might be assailed. His right was to have his coupon received for taxes when offered. That was the contract. To refuse to receive them was an open breach of its obligation. It is no remedy for this that he may acquiesce in the wrong, pay his taxes in money which he was entitled to pay in coupons, and bring suit to recover it back. His tender, as we have already seen, was equivalent to payment, so far as concerns the legality of all subsequent steps by the collector to enforce payment by distraint of his property. He has the right to say he will not pay the amount a second time, even for the privilege of recovering it back. And if he chooses to stand upon a lawful payment once made, he asks no remedy to recover back taxes illegally collected, but may resist the exaction, and treat as a wrongdoer the officer who seizes his property to enforce it.
It is suggested that the right to have coupons received in payment of taxes is a mere right of set-off, and is itself but a remedy subject to the control of legislation. Ordinarily, it is true, the right to set off mutual independent debts, by way of compensation and satisfaction, is dependent on the general law, does not enter into the contract, although it may be the lex loci contractus, and is dependent for its enforcement upon the lex fori, when suit is brought, and consequently may be changed by the legislature, without impairing vested rights. But in such cases the right is entirely dependent upon the general law, and changes with it. It is different, when, as in many cases of equitable set-off, it inheres in the transaction, or arises out of the relations of the parties; and it may in any case, as it was in this, be made the subject of contract between parties. When this is done, it stands upon the footing of every other lawful contract, upon valuable consideration, the obligation of which cannot be impaired by subsequent legislation.
It is urged upon us, however, that in a revenue system, a provision of law which gives to a party complaining of an illegal exaction of taxes, the right to recover back the amount in dispute only after previous payment under protest, as the sole remedy, against either the officer or the government, is a just and reasonable rule, sufficiently securing private rights, and convenient, if not necessary, to the interests of the public. We are referred to the revenue laws of the United States for illustration and example, and the question is put, why a similar provision, as it is assumed to be, should not be considered adequate as a remedy for the holders of coupons in Virginia, who have been denied the right to use them in payment of taxes.
The answer is obvious and complete. Virginia, by a contract which the constitution of the United States disables her from impairing, has bound herself that it shall be otherwise. The state has agreed that the coupons cut from her bonds shall be received in payment of taxes due to her, as though they were money. When the tax-payer has tendered such coupons, he has complied with the agreement, and in legal contemplation has paid the debt he owed the state. So far as that tax is concerned, and every step taken for enforcing its payment in disregard of that tender, the coupon-holder is with
drawn from the power and jurisdiction of the state. He is free from all further disturbance, and is securely shielded by the constitution in his immunity. No proceeding, whatever its pretext, which does not respect this right, can be judicially upheld. The question is not of the reasonableness of a remedy for a breach of the contract to receive the tendered coupons in payment of the tax; it is whether the right to have them so received, and the use of that right as a defense against all further efforts to exact and compel payment of the tax, in denial and defiance of that right, can be taken away without a violation of that provision of the constitution which prohibits the states from passing laws which impair the obligation of contracts. Certainly, a law which takes from the party his whole contract, and all the rights which it was intended to confer, must be regarded as a law impairing its obligation.
Another point remains for consideration. Section 721, Rev. St., provides that "the laws of the several states, except where the constitution, treaties, or statutes of the United States otherwise require or provide, shall be regarded as rules of decision in trials at common law, in the courts of the United States, in cases where they apply;" and section 914, Rev. St., declares that "the practice, pleadings, and forms and modes of proceeding in civil causes, other that equity and admiralty causes, in the circuit and district courts, shall conform, as near as may be, to the practice, pleadings, and forms and modes of proceeding existing at the time in like causes in the courts of record of the state within which such circuit or district courts are held, any rule of court to the contrary notwithstanding." Upon these sections it is argued that, admitting the acts of the general assembly of Virginia of January 26, 1882, and the amendment by the act of March 13, 1884, to be unconstitutional and void, so far as they forbid tax collectors from receiving coupons in payment of taxes, nevertheless, as the state has control over the forms of action and modes of proceeding by way of remedy, and has forbidden, in cases where the tax collector has refused coupons in payment of taxes, any personal action against him other than the suit to recover back the tax demanded and paid under protest, the same law, by force of the Revised Statutes of the United States, must govern in the courts of the United States.
It is not entirely clear, on the face of the act of January 26, 1882, that it does forbid actions against the officer for illegally levying upon the property of the coupon-holder for the tax which he has offered to pay. The language of the act seems to embrace only such suits as are framed with the direct object of preventing or restraining him from taking steps to collect the tax. And this uncertainty is not made clear by the amendatory act of March 13, 1884, which, by expressly forbidding actions of trespass or trespass on the case to be brought or maintained against any collecting officer for levying upon the property of any tax-payer who may have tendered coupons in payment of the tax demanded, would seem to have left the action of detinue, which was authorized in such cases by the previously existing law of Virginia, untouched by the prohibition. We shall assume, however, for the purposes of this opinion, that these acts of the general assembly of Virginia were intended to and do forbid every action, of whatever kind, against the collecting officer, for the recovery of specific property taken by distraint, or of damages for its caption or detention, and leaves to the coupon-holder, as his sole right of action, the suit to recover back the money illegally collected from him.
This action, as we have already seen, is no remedy whatever for the loss of the specific right of paying his taxes with coupons. It does not even profess so to be. Neither is it a remedy for the loss of the right sought to be vindicated in this and other personal actions against the collector for unlawfully taking from the plaintiff his property. And, upon the supposition made, this wrong is without remedy by any law of Virginia. The direct result, then, of giving effect to these provisions of the act in question is to defeat entirely the right of the coupon-holder to pay his taxes with his coupons, which we
have already said avoids that part of the acts in question which forbids it in terms, and to take from him that right as a defense against the wrongs and trespasses committed upon him and his property in denial and defiance of it. All persons, whose property is unlawfully taken, otherwise than to enforce payment of taxes, are secured in their right of action for redress. But the coupon-holder, to whom the constitution of the United States guaranties the right, conferred upon him by the law and contract of Virginia, to pay his taxes in coupons, is excepted. The discrimination is made against him in order to deprive him of that right, and, if permitted, will have the effect of denying to him all redress for a deprivation of a right secured to him by the constitution. To take away all remedy for the enforcement of a right is to take away the right itself. But that is not within the power of the state.
Section 721, Rev. St., it will be observed, makes an express exception, in reference to the adoption of state laws as rules of decision, of cases where the constitution otherwise requires, which it does wherever the adoption of the state law deprives a complaining party of a remedy essential to the vindication of a right, and that right is derived from or protected by the constitution of the United States. The same exception is implied in section 914, the language of which, indeed, is not imperative, as the conformity required in the practice and procedure of the courts of the United States with that of the state courts needs only to be "as near as may be." No one would contend that a law of a state, forbidding all redress by actions at law for injuries to property, would be upheld in the courts of the United States, for that would be to deprive one of his property without due process of law. This is exactly what the statutes in question undertake to do, in respect to that class of persons whose property is taken from them for the offense of asserting, under the protection of the constitution, the right to pay their taxes in coupons. The contract with Virginia was not only that the coupons should be received in payment of taxes, but, by necessary implication, that the tax-payer making such a tender should not be molested further, as though he were a delinquent, and that for every illegal attempt subsequently to enforce the collection of the tax, by the seizure of property, he should have the remedies of the law in force when the contract was made, for redress, or others equally effective. "The obligation of a contract," said this court, in McCracken v. Hayward, 2 How. 608, 612, "consists in its binding force on the party who makes it. This depends on the laws in existence when it is made. These are necessarily referred to in all contracts, and forming a part of them, as the measure of the obligation to perform them by the one party and the right acquired by the other. There can be no other standard by which to ascertain the extent of either than that which the terms of the contract indicate, according to their settled legal meaning; when it becomes consummated, the law defines the duty and the right, compels one party to perform the thing contracted for, and gives the other a right to enforce the performance by the remedies then in force. If any subsequent law affect to diminish the duty or to impair the right, it necessarily bears on the obligation of the contract, in favor of one party to the injury of the other; hence any law which in its operation amounts to a denial or obstruction of the rights accruing by a contract, though professing to act only on the remedy, is directly obnoxious to the prohibition of the constitution."
The acts of assembly in question must be taken together, as one is but ar amendment to the other. The scheme of the whole is indivisible. It cannot. be separated into parts. It must stand or fall together. The substantive part of it, which forbids the tax collector to receive coupons in payment of taxes, as we have already declared, as, indeed, on all sides is admitted, cannot stand, because it is not consistent with the constitution. That which is merely auxiliary to the main design must also fall with the principal of which it is merely an incident; and it follows that the acts in question are not laws
of Virginia, and are therefore not within the sections of the Revised Statutes referred to, nor obligatory upon the courts of the United States.
It is undoubtedly true that there may be cases where one part of a statute may be enforced as constitutional, and another be declared inoperative and void, because unconstitutional; but these are cases where the parts are so distinctly separable that each can stand alone, and where the court is able to see, and to declare, that the intention of the legislature was that the part pronounced valid should be enforceable, even though the other part should fail. To hold otherwise would be to substitute for the law intended by the legislature one they may never have been willing by itself to enact. An illustration of this principle is found in the Trade-mark Cases, 100 U. S. 82, where an act of congress, which, it was claimed, would have been valid as a regulation of commerce with foreign nations and among the states, was held to be void altogether, because it embraced all commerce, including that between citizens of the same state, which was not within the jurisdiction of congress, and its language could not be restrained to that which was subject to the control of congress. "If we should," said the court in that case, (page 99,) “in the case before us undertake to make, by judicial construction, a law which congress did not make, it is quite probable we should do what, if the matter were now before that body, it would be unwilling to do."
Indeed, it is quite manifest from the face of the laws themselves that they are together but parts of a larger whole. By an act of the general assembly of Virginia, passed February 14, 1882, the legislature restated the account between the state and its creditors on a basis of readjustment which reduced it to the sum of $21,035,377.15, including interest in arrears to July 1, 1882, which was thereby declared to be her equitable share of the debt of the old and entire state, and on which it was also declared that the state was not able to pay interest for the future at a larger rate than 3 per cent. per annum. The outstanding debt, of which this was a reduction, was then classified, and bonds of the state were authorized to be issued, bearing interest at the rate of 3 per cent. per annum, in exchange for outstanding bonds of the different classes, scaled at rates of 53 per cent., 60 per cent., 69 per cent., 63 per cent., and, as to one class, as high as 80 per cent., which were to be retired *and canceled. The coupons on the new bonds were not made receivable in payment of taxes. To coerce creditors holding bonds issued under the act of March 30, 1871, to exchange them for these new bonds, at these reduced rates, and with them to give up their security for the payment of interest arising out of the receivability of coupons in payment of taxes, is the evident purpose of the acts of January 26, 1882, and of March 13, 1884, and all together form a single scheme, the undisguised object of which is to enable the state to rid itself of a considerable portion of its public debt, and to place the remainder on terms to suit its own convenience, without regard to the obligation it owes to its creditors.
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, expecting 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.
The judgment of the hustings court of the city of Richmond is accordingly reversed, and the cause will be remanded, with directions to render judgment upon the agreed statement of facts in favor of the plaintiff; and it is so ordered.
(114 U. S. 307)
WHITE v. GREENHOW.1
(April 20, 1885.)
VIRGINIA BONDS-POINDEXTER V. GREENHOW, ANTE, 903, FOLLOWED.
This case falls within the decision in Poindexter v. Greenhow, ante, 903, and is decided by it.
In Error to the Circuit Court of the United States for the Eastern District of Virginia,
Wm. L. Royall, D. H. Chamberlain, Wm. M. Evarts, and Wager Swayne, for plaintiff in error. A. H. Garland, R. T. Merrick, and F. S. Blair, Atty. Gen., for defendant in error.
MATTHEWS, J. The plaintiff in error, who was plaintiff below, brought his action in the circuit court of the United States for the Eastern district of Virginia against the defendant, both being citizens of that state. The declaration, in substance, sets out that the plaintiff, owning property in the city of Richmond, was assessed thereon for the year 1882 for certain taxes to be paid to the state of Virginia, leviable for after December 1, 1882; that the defendant was treasurer of the city of Richmond, and, as such, collector of taxes due to the state assessed on property in that city; that plaintiff tendered to the defendant, on demand being made for payment of said taxes, the amount thereof in coupons cut from bonds issued by the state of Virginia under the act of March 30, 1871, entitled "An act to provide for the funding and payment of the public debt," which coupons, by the terms of said act, were receivable in payment of taxes by virtue of a contract with the state of Virginia; that the defendant refused to receive said coupons, under color of the authority of the act of the general assembly of the state of Virginia, passed January 26, 1882, which forbade him to receive the same; that the defendant, after refusal of said tender, forcibly and unlawfully entered the premises of the plaintiff, and levied upon and seized and carried away personal property of the plaintiff of the value of $3,000, in order to sell the same for the satisfaction of said taxes, which he claimed to be unpaid and delinquent; that the acts of the general assembly of Virginia, specified in the pleadings, which require the tax collector to refuse to receive such coupons in payment of taxes, and to proceed with the collection of taxes, for the payment of which they have been tendered, as if they were delinquent, impair the obligation of the said contract between the state of Virginia and the plaintiff; and that by reason of the said wrongs the plaintiff has suffered damage in the sum of $6,000 for which he brings suit. To this declaration the defendant demurred generally, the demurrer was sustained, and judgment was rendered for the de fendant. The plaintiff sued out this writ of error.
All the questions raised and argued upon the merits of this case have beer fully considered in the opinion of the court in the case of Poindexter v Greenhow, ante, 903. The present action, as shown on the face of the declaration, was a case arising under the constitution of the United States, and was one, therefore, of which the circuit court of the United States had rightful jurisdiction by virtue of the act of March 3, 1875, without regard to the citizenship of the parties, the sum or value in controversy being in excess of $500.
In conformity with the views expressed in the opinion in Poindexter v. Greenhow, ante, 903, the judgment in the present case is reversed, and the cause is remanded, with directions to proceed therein in conformity with law.
1 See dissenting opinion, post, 962.