Gee v. Mathis

• Decision Date: 01 December 1866
• Citation: 71 U.S. 143,4 Wall. 143,18 L.Ed. 314
• Parties: McGEE v. MATHIS
• Court: U.S. Supreme Court

71 U.S. 143

18 L.Ed. 314

4 Wall. 143

McGEE v. MATHIS.

December Term, 1866

ERROR to the Supreme Court of Arkansas, the case, as stated by the Chief Justice in delivering the opinion of the court, being thus:

In 1850, the United States granted, by act of Congress, to the State of Arkansas, all the swamp and overflowed government lands within its limits, on condition that the proceeds of the lands, or the lands themselves, should be applied, as far as necessary, in reclaiming them for cultivation by means of levees and drains.

The State accepted the grant, and, by an act of the legislature, in 1851, provided for the sale of the lands; for the issue of transferable scrip receivable for any lands, not already taken up, at the time of selection by the holder; for contracts for the making of levees and drains, and for the payment of contractors in scrip or otherwise.

In the fourteenth section of this act it was provided that 'to encourage, by all just means, the progress and the completing of the reclaiming such lands, by offering inducements to purchasers and contractors to take up said lands, all said swamp and overflowed lands shall be exempt from taxation for the term of ten years, or until they shall be reclaimed.'

In 1855 this section was repealed, and provision was made by law for the taxation of swamp and overflowed lands, sold or to be sold, precisely as other lands.

The plaintiff in error, before this repeal, had become the owner, by transfer from contractors, of a large amount of the scriptissued under the act of 1851, and with this scrip after the repeal, took up and paid for many sections and parts of sections of the granted lands lying in Chicot County.

In 1857 another act of the legislature, local in its nature, provided for the making of levees and drains in Chicot County, and authorized a special tax to meet the cost. This special tax was assessed upon the unreclaimed swamp lands of the plaintiff in error, as well as upon other lands, and the defendant in error, under authority of the act, proceeded to take the necessary measures for the collection of the tax.

The Constitution of the United States ordains that 'no State shall pass any law impairing the obligation of contracts.'

The plaintiff in error filed his bill in the proper State court, alleging that the acts of 1855 and 1857 impaired the obligation of the contract of the State with the United States, expressed in the grant by Congress in 1850 and its acceptance by the State; and also the contract between the State and the levee contractors, and other lawful holders of swamp land scrip, issued under the act of 1851, that such scrip should be receivable for unlocated swamp lands, and that such lands should not be subject to taxation for ten years from the time when taken up, or until reclaimed; and prayed an injunction to restrain the defendant in error from the collection of the taxes authorized by those acts.

In his answer to the bill, the defendant stated that the state and county taxes imposed on the lands of the complainant had been stricken out of the assessment by order of the County Court, and justified his proceeding as sheriff to collect the special levee tax under the act of 1857.

The cause was brought to hearing in the Supreme Court of Arkansas, by whose decree the bill of the complainant was dismissed, and it now came before this tribunal upon writ of error directed to that court.

Mr. Reverdy Johnson, with a brief of Mr. Garland, for the plaintiff in error:

We here controvert the validity of a statute passed through all branches of the law-making power, and afterwards, on argument, declared valid by the highest court of a State. Coming to such an office, we may be excused for some fulness of argument.

The plaintiff in error asserts that the act of 1857, familiarly known as the Levee Act, and under which his lands were taxed, is unconstitutional. And to show this, he maintains:

1st. The fourteenth section of the act of 1851, which exempted swamp lands from taxation for ten years, or until reclaimed, was a contract, it being a part of the law which accepted the grant from Congress.

2d. This levee act misuses and diverts from its proper channel the grant of Congress, inasmuch as the act of Congress of 1850 provides that, as far as necessary to the purpose of reclaiming swamp lands by means of levees and drains, the proceeds of the lands, whether from sale or by direct appropriation in kind, shall be applied in that way.

3d. That having received this scrip representing swamp land, which was issued to him on contracts made prior to the repeal of the fourteenth section of the act of January, 1851, although his lands were entered with this scrip after its repeal, they are as much exempt as if entered before the exempting clause was repealed.

In The State v. County Court of Crittenden, before the Supreme Court of Arkansas,¹ it was held that the fourteenth section named above was a valid contract under the Constitution. As a contract, from the day of the passage of the act, it held out an encouragement to persons to take up these lands. It does not say from the day of entry, but it is general and operates necessarily from the day of its passage. When the legislature passed this law, exemption from taxation became at once one of the conditions of the acceptance of the grant. Until the legislature, by an act for that purpose, accepted the grant from Congress, it was of no avail, and could not be used for the benefit of any one. But when the legislature did accept it, the bounty was in a shape to be used; and whatever the legislature did in that behalf related back to the grant, and the act granting, as well as the one accepting, formed in themselves, together, one act—an entirety. Both stood then as material parts of the whole.

If, as we have contended, the two acts together made the grant complete, and they alone did this, the grant then became a contract, and any future changes of it were nullities.²

If the law repealing the exempting clause stands, it is apparent that the whole grant falls to the ground. If an essential part of the grant be destroyed, it is a contradiction to say the grant still exists. The grant having been completed, the law would always dictate that it should be upheld and carried out. One rule of law is, that the contract should be supported, rather than defeated. And another, that, as in ordinary contracts, modifications or changes must be made by both parties, or with their knowledge and consent. So it is as to grants; the grantor must dispense with a condition before it is waived.

It is evident from the Levee Act, that its object was the attainment of the same end, and by the same means—that is, by leveeing—as contemplated by the act of Congress granting these lands to the State of Arkansas. For this object, Congress had put in the hands of the State a fund, by which she was to build these necessary levees, and the State was bound so to apply the fund. Her obligation to do this formed a part of the contract between her and the United States, and the owners of property have the right to have this contract performed by her. The granting act points out the purpose for which the grant was made. No other can be substituted. By the enactment of this levee law, the State declared, that the laying out and building of these levees in Chicot County was necessary. If so, there is a way already provided; that is, under the terms of the grant, the State must apply the lands granted to her. By this act, the State has attempted to discharge her contract in a different manner from that agreed upon. It amounts to this: she withholds the funds given her for a specific purpose, and to that extent she abrogates McGee's right, as well as the right of all property-holders there, under the act of Congress, to have those funds, or lands, applied to the building of levees; and besides this, imposes upon them additional burdens to complete the end which Congress had in view in making the grant. This is in the face of the grant. Every right the citizen or property-holder had under this grant is destroyed; and the grant thus misused and diverted is no bounty, but an oppression.

Under the law, a levee contractor might take his pay in lands, drained and leveed, or in scrip worth so much, each piece of scrip representing so many acres of land, and this scrip was made assignable, and could be located on any of the unlocated swamp lands. The law authorizing it stamped it with certain characters and properties; made it assignable, and made it the representative of so much land. No one can contend that any contractor took the scrip for itself, or for any inherent value in it, as so many dollars to him. With its value on its face, its negotiability, &c., it was at last but land. While the law made it the representative of land, it pointed out its ultimate destination, or purposes; that is, location upon swamp land. It gave the holder a right to so much land, and until it was located it had no value of itself. Independent of the idea of locating it, it was worthless. It might go from A. to B., and so on through numberless hands, but the last holder of it never received his rights under it till it was converted. Until then, its offices were incomplete.

We have seen that the law of this grant was a contract. This contract said, if A. will drain and levee 1000 acres of land, so as to reclaim the same, he will be paid therefor, if he desires, in swamp land scrip, with which he may enter lands, and such lands shall not be taxed for a period of ten years, or until reclaimed. A. does the work under this law, or this contract; how can his rights, or those of his assignee in the scrip, if there be one, be modified, restricted, or changed in the least? The original holder has the right, then, and the instrument assigned, or scrip transferred, carries its original legal liabilities into as many hands as it may chance to fall. Such is...