Central Trust Co. of New York v. Citizens' Street Ry. Co. of Indianapolis

• Decision Date: 22 July 1897
• Docket Number: 9,448.
• Parties: CENTRAL TRUST CO. OF NEW YORK v. CITIZENS' ST. RY. CO. of INDIANAPOLIS et al.
• Court: United States Circuit Court, District of Indiana

82 F. 1

CENTRAL TRUST CO. OF NEW YORK v. CITIZENS' ST. RY. CO. of INDIANAPOLIS et al.

No. 9,448.

United States Circuit Court, D. Indiana.

July 22, 1897

Butler Notman, Joline & Mynderse, Benjamin Harrison, Miller & Elam and F. Winter, for complainant.

William A. Ketcham, James B. Curtis, John W. Kern, and Joseph E Bell, for defendants.

The defendant the city of Indianapolis now demurs to the bill and also moves to dissolve the injunction. It appears that after the hearing on the motion for preliminary injunction, the city of Indianapolis brought suit in one of the state courts against one Navin, to recover a penalty, under an ordinance of the city, for alleged misconduct of Navin in boarding a street car, and refusing to pay the fare demanded, namely, five cents. This alleged offense by Navin was after the hearing on the motion for the injunction, but before the injunction had been granted. Navin pleaded the act of 1897, called in question by the complainant here, in justification. The cause went by appeal to the supreme court of Indiana, and that court, on the 11th of June, rendered a decision holding the enactment of 1897 valid. 47 N.E. 525. Motion to dissolve is made on the strength of that decision. Complainant on its part moves for leave to amend the bill by making defendants thereto certain persons who have brought actions in the state courts for penalties pursuant to said act of 1897.

SHOWALTER, Circuit Judge (after stating the facts as above):

It is again urged that this suit cannot be maintained against Prosecuting Attorney Wiltsie, because he represents the state of Indiana. If the enactment here in question be valid, then Mr. Wiltsie does represent the state; not the state as a proprietor, however, but the state as a government agency. If the enactment be invalid, then he does not represent anything. On the latter hypothesis, he, or any successor to him in office, in attempting to enforce the penalties in the enactment of 1897, would be merely a wrongdoer. The theory of the bill is that that statute is unconstitutional and void. If complainant be mistaken on this one proposition, then the bill cannot be sustained as to any defendant. I get the impression from the argument and citations made that a 'suit in law or equity' against a state, within the sense of the eleventh amendment to the constitution of the United States, is a suit affecting in some manner a property right of the state, as a municipal corporation. But the discussion on this point seems to me aside from the case at bar. If, as said, the enactment of 1897 be invalid, then Mr. Wiltsie does not here represent the state; if it be valid, he does. But, on the latter hypothesis, the entire suit must be disposed of before any question special to Mr. Wiltsie can arise. The validity of the amendment, I take it, this court must pass upon. What the rule of decision shall be,-- whether the opinion of the state court shall be deemed final, or whether this court is charged with the responsibility of investigating the question independently,-- on any view of that matter the validity of the amendment, so far as concerns this litigation, and apart from any subsequent review by the federal court of appeals or federal supreme court, depends upon the pronouncement of this court. For these reasons, I doubt if the discussion concerning the force of the eleventh amendment be pertinent.

In Reagan v. Trust Co.,, 154 U.S. 362, 14 S.Ct. 1047, the legislature of Texas had, on April 3, 1891, passed an act establishing a board of three commissioners, with authority to fix rates on railroads in that state. Section 6 of the act provided that, if any railroad company 'or other party at interest' be dissatisfied with a rate as fixed by the board, such 'dissatisfied company or party' could commence a proceeding in a court of competent jurisdiction in Travis county, Tex., against the board, and thus determine the question of reasonableness in such rate; and, from the decision there made, either party could 'appeal to the appellate court having jurisdiction of said cause. ' By section 5 of the same law it was provided, in substance, that the railroad company must carry for the rate fixed by the board, and that such rate by 'conclusive and deemed * * * reasonable * * * until finally found otherwise, in' the direct action provided for in section 6. By section 14 of the same act, if any railroad company, its agent or officer, charged more than the rate fixed by the board, said 'company and its said agent and officer' should 'forfeit and pay to the state of Texas a sum not less that $100, nor more than $5,000." Section 15 defined 'unjust discrimination,' and fixed a penalty of not less than $500, nor more than $5,000, upon any railroad company violating any provision of that section. Other penalties were provided recoverable by 'the person injured.' By section 19 it was made the duty of the attorney general of the state to prosecute suits in the name of the state for all penalties except those recoverable by individuals. It will now be noticed that, by force of section 5 and 14, a railroad company, unless it chose to accept the rates fixed by the board,-- rates which had not yet been found reasonable by any judicial authority, and which might be in fact unreasonable,-- would be subject to prosecutions at the suit of the state, instituted by the attorney general. On April 30, 1892, the Farmers' Loan & Trust Company, a New York corporation, being mortgagee of the railroad property of the International & Great Northwestern Railroad Company, a company organized under the law of Texas, and having and operating its road entirely within the limits of that state, exhibited its bill in the circuit court of the United States for the Western district of Texas, making said railroad company, the three members of the board, and the attorney general parties defendant. Upon the showing of this bill that the rates fixed by the board were in fact unreasonable, the court issued its writ, enjoining the company from adopting such rate, the attorney general from instituting or prosecuting any suit to collect any penalty by reason of the failure of the company to adopt such rate, and the members of the board from any such action by them as would have been appropriate in aid of prosecutions by the attorney general had section 5 and 14 been valid. This injunction was sustained by the supreme court of the United States. One contention before that court was that, by force of the eleventh amendment, the suit could not go against the attorney general, since in the enjoined prosecutions the state would be plaintiff, and the attorney general was the state officer and representative in that behalf. Mr. Justice Brewer, who delivered the opinion of the supreme court of the United States, reviewed the arguments and citations, and held that the suit was not against the state, within the meaning of the eleventh amendment. If section 5 had been valid for any purpose, or if section 14 had been valid according to its terms,-- that is, as applied to any refusal of the company where the rate had not previously been judicially found reasonable as provided in section 6, and was in fact unreasonable,-- then the attorney general, in the inhibited prosecutions, would certainly have represented the state. As the case stood, and assuming the invalidity of said sections, he represented nothing. His prosecutions would simply have been gross wrongs, under color of void legislative enactments. The opinion last cited was delivered in May, 1894. The position of Mr. Wiltsie here is the same as that of the attorney general in the Reagan Case. If the attorney general had not been specifically named as the officer to carry on the prosecutions under the Texas statute, that duty would have devolved upon some prosecuting attorney in Texas, and such officer, in place of the attorney general, would have been the defendant. I cannot hold that this suit, as against Mr. Wiltsie, is inhibited by the eleventh amendment, without disregarding the law as laid down by the supreme court of the United States. If, in the Reagan Case, section 5 and 14 had been deemed valid, the injunction could not have issued or been sustained. Here the injunction is the purpose of the bill. If, as said, the enactment of 1897 be valid, the case fails, and the bill must be dismissed as to all defendants. If that enactment be invalid, Mr. Wiltsie, so far as the threatened prosecutions are concerned, does not represent the state in any capacity whatever. So much as preliminary to the matters which arise more particularly on this hearing.

When a federal question is involved, the decision of the highest court of the state is not final, but is reviewable by the supreme court of the United States. To this extent, at least the judicial power of a state is subordinate to that of the United States. But there is no relation to subordination on the part of any federal court to any state court. In certain cases the federal courts, of their own motion, follow the decision of the state court, as determinative of the rights of a litigant. In Forsyth v. City of Hammond, decided April 19, 1897, by the supreme court of the United States (17 S.Ct. 665), it was ruled that a late decision of the supreme court of Indiana on the validity of proceedings under Indiana statutes enlarging the boundaries of the city of Hammond was law for the parties, especially in view of the circumstance that Mrs. Forsyth herself had taken the appeal which resulted in that decision, and in view of the further circumstance that the state decision was upon essentially the specific controversy afterwards, in another form, made the subject of litigation in the cause before the supreme court of the United States. But...