Illinois Central Railroad Company v. Wirt Adams

• Decision Date: 07 January 1901
• Docket Number: No. 77,77
• Citation: 21 S.Ct. 251,180 U.S. 28,45 L.Ed. 410
• Parties: ILLINOIS CENTRAL RAILROAD COMPANY, Appt. , v. WIRT ADAMS
• Court: U.S. Supreme Court

180 U.S. 28

21 S.Ct. 251

45 L.Ed. 410

ILLINOIS CENTRAL RAILROAD COMPANY, Appt.,

v WIRT ADAMS.

No. 77.

Argued October 24, 1900.

Decided January 7, 1901.

This was a bill in equity filed by the railroad company, an Illinois corporation, against Wirt Adams, revenue agent, a citizen of the state of Mississippi, the railroad commission of that state, and the Canton, Aberdeen, & Nashville Railroad Company, a corporation of the state of Mississippi, to enjoin the railroad commission from approving and certifying an assessment for taxes on the Canton, Aberdeen, & Nashville Railroad for any of the years from 1886 to 1897 inclusive; also to enjoin the revenue agent from beginning any suit, or advising any of the counties or towns along the line of such road to bring suit for the recovery of such taxes, and for a decree adjudging such railroad to be exempt from state and county taxation for the years aforesaid.

A temporary injunction, issued upon the filing of the bill, was subsequently discharged, an appeal taken to the court of appeals, which was dismissed for the want of jurisdiction, and a final decree subsequently entered in the circuit court dismissing the bill, with the following certificate upon the questions of jurisdiction:

'1. That the complainant in its original bill showed no jurisdiction on the ground of diversity of citizenship. Defendants claim that its interest was derivative through the Canton, Aberdeen, & Nashville, and that the complainant had no right to raise jurisdiction in the Federal courts by making the Canton, Aberdeen, & Nashville Railroad Company a party defendant in the cause.'

'2. That the complainant by its original bill showed no jurisdiction in this court because of the subject-matter stated, inasmuch as the bill set forth no particular Federal question.'

3. That there was no jurisdiction in this matter, because the bill was a suit against the state of Mississippi and in violation of the 11th Amendment to the Constitution of the United States.

Messrs. Wm. D. Guthrie, James Fentress, Edward Mayes, Noel Gale, and J. M. Dickinson for appellant.

Messrs. F. A. Critz, Marcellus Green, and R. C. Beckett for appellee.

Mr. Justice Brown delivered the opinion of the court:

1. Motion was made to dismiss this bill upon the ground that the purpose and object of the original injunction bill have failed by reason of the fact that (as appears from an affidavit filed by Adams in this court since the case was docketed here) after the injunction was refused, and before the bill was finally dismissed or an appeal taken to this court, he filed a bill in equity in the chancery court of Clay county, Mississippi, against the Illinois Central Railroad Company and the Canton, Aberdeen, & Nashville Company to collect the same taxes involved here, and, in addition thereto, the taxes for the year 1898; that the defendants in their answer set up the same defenses relied upon here, which were overruled by the chancery court, and a final judgment given against the property as a paramount lien, June 16, 1899, from which decree an appeal is now pending and undetermined in the supreme court of the state.

The argument is that, inasmuch as the injunction in this suit was vacated by the circuit court, the assessment of taxes completed, and suit brought upon it and judgment recovered, the appeal in this case is abortive and improper for the reason that the very things the bill was filed to prevent are accomplished facts, and the railway companies cannot be injured, inasmuch as they have a complete remedy by writ of error to the supreme court of the state from this court, if any Federal question be involved and decided against them by that court.

The question which arises upon this state of facts, is, first, whether a decree in an equity cause in a state court can be set up as res judicata pending an appeal from such decree to the supreme court of the state; and, second, whether, assuming the decree to be still in force pending the appeal, it can be pleaded as res judicata upon motion to dismiss the appeal in this court. We are of opinion that this is a defense to the merits of the case, and is no ground for the dismissal of the appeal. It would hardly be contended that, if this decree of the state court had been propounced before the bill was filed in the Federal court, the appeal would be dismissed upon motion upon that ground; much less that it could be set up as ground for dismissing an appeal to this court. The case is not different, if the decree, instead of being rendered before the bill is filed in the Federal court, is rendered after such a bill is filed, and pending suit. In either case it is a question whether it operates as an estoppel. While the fact that an appeal has been taken from such decree, which is still pending, introduces a new element, it is still the same question whether the decree can be made available as an estoppel upon motion to dismiss.

It is true that since the injunction against him was dissolved, Adams has sued and has succeeded, but it does not follow that his judgment may not be reversed by the supreme court when plaintiff's right to prosecute this bill would be revived.

We think the question is practically covered by the decision of this court at the last term in the case of Huntington v. Laidlcy, 176 U. S. 668, 44 L. ed. 630, 20 Sup. Ct. Rep. 526. In that case Huntington, as a receiver of the Central Land Company, on February 28, 1891, filed a bill in the circuit court of the United States against Laidley and other defendants, to set aside certain deeds which were claimed to be in fraud of the rights of the land company, and a cloud upon its title. Defendants answered and set up by way of estoppel certain judgments in the state courts rendered before the bill was filed, in favor of Laidley and against the Central Land Company in an action of ejectment, and also in a suit in equity between them. The circuit court upon this state of facts certified to this court whether that court was without jurisdiction, because of the pendency in the state court, prior to the suit, of the action of ejectment begun by Laidley against the Central Land Company, and also of the suit in chancery brought in the state court prior to the commencement of the case. It was held by this court that the question 'whether the proceedings in any or all of the suits, at law or in equity, in the state court, afforded a defense, either by way of res judicata, or because of any control acquired by the state court over the subject-matter, to this bill in the circuit court of the United States, was not a question affecting the jurisdiction of that court, but was a question affecting the merits of the cause, and as such to be tried and determined by that court in the exercise of its jurisdiction.' 'The circuit court of the United States,' said Mr. Justice Gray, 'cannot, by treating a question of merits of question of jurisdiction, enable this court upon a direct appeal on the question of jurisdiction only, to decide the question of merits, except in so far as it bears upon the question whether the court below had or had not jurisdiction of the case.' So, too, in Rcilly v. Bader, 50 Minn. 199, 52 N. W. 522, it was held that a former adjudication could not be set up by motion after trial and verdict. All that was held in Marsh v. Shepard, 120 U. S. 595, sub nom. Marsh v. Nichols, S. & Co. 30 L. ed. 794, 7 Sup. Ct. Rep. 704, was that one of several appellants cannot dismiss an appeal to this court, if the other appellants oppose such dismissal, though after the appeal was taken the supreme court of the state had enjoined all the appellants from enforcing their claims. Motion was denied upon the grounds that one appellant cannot control the appeal as against his coappellants. In Mills v. Green, 159 U. S. 651, 40 L. ed. 293, 16 Sup. Ct. Rep. 132, it was only held that where, after appeal taken, an event occurs which would render it impossible for this court, if it should decide the case in favor of the plaintiff, to grant him any effectual relief, the court will not proceed to a formal judgment, but will dismiss the appeal; in other words, that the court will not decide moot cases. In the case under consideration, however, the question still remains whether a decree of a state court can be made available as an estoppel pending an appeal to the supreme court, and this, as already stated, is a defense, upon the merits.

As the circuit court certifies to this court, pursuant to § 5 of the courts of appeal act, that the bill was dismissed for the want of jurisdiction, and this fact further appears on the face of the decree discharging the restraining order and overruling the motion for an injunction, the motion to dismiss must be denied.

Coming now to the three questions certified upon the subject of jurisdiction by the circuit court, we are next to inquire whether such jurisdiction can be supported upon the ground (1) of diversity of citizenship; (2) of a question arising under the Constitution or laws of the United States; or (3) whether it is ousted by the fact that the suit is against the state of Mississippi in violation of the 11th Amendment to the Constitution.

2. Plaintiff is averred to be a citizen of Illinois, and all the defendants citizens of Mississippi; but if further appears that the Illinois Central Company claims the right to bring the bill upon the ground that it is the lessee of the property and a creditor and a mortgage bondholder of the Canton, Aberdeen, & Nashville Railroad Company, whose property is sought to be taxed. It seems that it was once the owner of all the bonds, amounting to $2,000,000, but for some reason a subsequent mortgage was executed, and under it bonds to the amount of $1,750,000 were issued and sold, and a like number of the first two million issue were surrendered, and a note, secured by a second mortgage, taken for the balance. The latter bonds and note are averred to...