Principality of Monaco v. State of Mississippi

• Citation: 292 U.S. 313,78 L.Ed. 1282,54 S.Ct. 745
• Parties: PRINCIPALITY OF MONACO v. STATE OF MISSISSIPPI. No. ____, Original
• Decision Date: 21 May 1934
• Court: United States Supreme Court

292 U.S. 313

54 S.Ct. 745

78 L.Ed. 1282

PRINCIPALITY OF MONACO

v STATE OF MISSISSIPPI.

No. ____, Original.

Argued on Return to Rule March 5, 1934.

Decided May 21, 1934.

Messrs. Frederic R. Coudert and Dean Emery, both of New York, for plaintiff.

[Argument of Counsel from pages 314-315 intentionally omitted] Messrs. J. A. Lauderdale and Greek L. Rice, both of Jackson, Miss., for the State of Mississippi.

[Argument of Counsel from Pages 316-317 intentionally omitted] Mr. Chief Justice HUGHES delivered the opinion of the Court.

The Principality of Monaco asks leave to bring suit in this Court against the State of Mississippi upon bonds issued by the State and alleged to be the absolute property of the Principality.

The proposed declaration sets forth four causes of action. Two counts are upon bonds known as Mississippi Planters' Bank Bonds, dated March 1, 1833, the first count being upon eight bonds of $1,000 each, due March 1, 1861, and the second count upon two bonds of $1,000 each, due March 1, 1866, all with interest at 6 per cent. per annum. The remaining two counts are upon bonds known as Mississippi Union Bank Bonds, the third count being on twenty bonds of $2,000 each, dated June 7, 1838, due February 5, 1850, and the fourth count upon twenty-five bonds of $2,000 each, dated June 6, 1838, due February 5, 1858, all with interest at 5 per cent. per annum. In each count it was alleged that the bonds were transferred and delivered to the Principality at its legation in Paris, France, on or about September 27, 1933, as an absolute gift. Accompanying the declaration and made a part of it is a letter of the donors, dated September 26, 1933, stating that the bonds had 'been handed down from their respective families who purchased them at the time of their issue by the State of Mississippi'; that the State had 'long since defaulted on the principal and interest of these bonds, the holders of which have waited for some 90 years in the hope that the State would meet its obligations and make payment'; that the donors had been advised that there was no basis upon which they could maintain a suit against Mississippi on the bonds, but that 'such a suit could only be maintained by a foreign government or one of the United States'; and that in these circumstances the donors were making an unconditional gift of the bonds to the Principality to be applied 'to the causes of any of its charities, to the furtherance of its internal development or to the benefit of its citizens in such manner as it may select.'

The State of Mississippi, in its return to the rule to show cause why leave should not be granted, raises the following objections: (1) That the Principality of Monaco is not a 'foreign State' within the meaning of section 2, article 3, of the Constitution of the United States, and is therefore not authorized to bring a suit against a State; (2) that the State of Mississippi has not consented and does not consent that she be sued by the Principality of Monaco and that without such consent the State cannot be sued; (3) that the Constitution by section 10, cl. 3, art. 1, 'forbids the State of Mississippi without the consent of Congress to enter into any compact or agreement with the Principality of Monaco, and no compact, agreement or contract has been entered into by the State with the Principality'; (4) that the proposed litigation is an attempt by the Principality 'to evade the prohibitions of the Eleventh Amendment of the Constitution of the United States'; (5) that the proposed declaration does not state a controversy which is 'justiciable under the Constitution of the United States and cognizable under the jurisdiction of this Court'; (6) that the alleged right of action 'has long since been defeated and extinguished' by reason of the completion of the period of limitation of action prescribed by the statutes of Mississippi; that the plaintiff and its predecessors in title have been guilty of laches, and that the right of action, if any, is now and for a long time has been stale.

The State contends that the holders of her bonds had a statutory right to sue the State by Virtue of the Act of February 15, 1833 (Hutchinson's Code, 1798-1848, chap. 54, art. 11, § 1; State v. Johnson, 25 Miss. 625); that by the operation of a constitutional amendment in 1856 abolishing the Superior Court of Chancery, and until the adoption of the Revised Code of 1871, the State had no statutory provision authorizing suits against her (Whitney v. State, 52 Miss. 732); that the Revised Code of 1871 (section 1573) provided that the State might be sued and that Code had no statute of limitations in respect to bonds or contracts under seal; that a limitation of seven years as to actions upon such obligations was imposed by the Act of April 19, 1873 (Laws Miss. 1873, c. 26) and that the statute of limitations against the bonds in question began to run on that date; that the right to sue the State conferred by the Revised Code of 1871 was taken away by the Code of 1880 which became effective on November 1st of that year (Gulf Export Co. v. State, 112 Miss. 452, 73 So. 281); that meanwhile, in 1876, the Constitution of the State (art. 12, § 5) was amended so as to provide that the State should not 'assume, redeem, secure, or pay any indebtedness or pretended indebtedness alleged to be due by the state of Mississippi to any person, association, or corporation whatsoever, claiming the same as owners, holders, or assignees of any bond or bonds, now generally known as 'Union Bank' bonds and 'Planters Bank' bonds,' that this provision was incorporated in the Constitution of 1890 (section 258), and that since its adoption no foreign State could accept the bonds in question as a charitable donation in good faith.

In reply to these objections, the Principality asserts that she is a foreign State recognized as such by the Government of the United States; that the consent of the State of Mississippi is not necessary to give the Court jurisdiction; that the obligation of the State of Mississippi to pay her bonds is not an agreement or a compact with a foreign power within section 10, cl. 3, article 1, of the Constitution; that the action is not a subterfuge to evade the Eleventh Amendment; that the cause of action is justiciable; that no statute of limitations has run against the plaintiff or its predecessors and that neither has been guilty of laches. Upon the last-mentioned points the Principality urges that under the provisions of the statutes of Mississippi, holders of her bonds never had an enforceable remedy which could be said to be barred by the running of any state statute of limitations, and that the Principality will be prepared in the course of the suit to meet the defense of laches by showing the history of the efforts of the holders of the bonds to procure payment.

These contentions have been presented in oral argument as well as upon briefs. We find it necessary to deal with but one, that is, the question whether this Court has jurisdiction to entertain a suit brought by a foreign State against a State without her consent. That question, not hitherto determined, is now definitely presented.

The Principality relies upon the provisions of section 2 of article 3 of the Constitution of the United States that the judicial power shall extend to controversies 'between a State, or the Citizens thereof, and foreign States, Citizens or Subjects' (clause 1), and that in cases 'in which a State shall be Party' this Court shall have original jurisdiction (clause 2). The absence of qualification requiring the consent of the State in the case of a suit by a foreign State is asserted to be controlling. And the point is stressed that the Eleventh Amendment of the Constitution, providing that the judicial power shall not be construed to extend to any suit against one of the United States 'by Citizens of another State, or by Citizens or subjects of any Foreign State,' contains no reference to a suit brought by a foreign State.

The argument drawn from the lack of an express requirement of consent to be sued is inconclusive. Thus there is no express provision that the United States may not be sued in the absence of consent. Clause 1 of section 2 of article 3 extends the judicial power 'to Controversies to which the United States shall be a Party.' Literally, this includes such controversies, whether the United States be party plaintiff or defendant. Williams v. United States, 289 U.S. 553, 573, 53 S.Ct. 751, 77 L.Ed. 1372. But by reason of the established doctrine of the immunity of the sovereign from suit except upon consent, the provision of clause 1 of section 2 of article 3 does not authorize the maintenance of suits against the United States. Williams v. United States, supra. Compare Cohens v. Virginia, 6 Wheat. 264, 411, 412, 5 L.Ed. 257; Minnesota v. Hitchcock, 185 U.S. 373, 384, 386, 22 S.Ct. 650, 46 L.Ed. 954; Kansas v. United States, 204 U.S. 331, 341, 342, 27 S.Ct. 388, 51 L.Ed. 510. And while clause 2 of section 2 of article 3 gives this Court original jurisdiction in those cases in which 'a State shall be Party,' this Court has no jurisdiction of a suit by a State against the United States in the absence of consent. Kansas v. United States, supra. Clause 2 merely distributes the jurisdiction conferred by clause 1, and deals with cases in which resort may be had to the original jurisdiction of this Court in the exercise of the judicial power as previously given. Duhne v. New Jersey, 251 U.S. 311, 314, 40 S.Ct. 154, 64 L.Ed. 280.

Similarly, neither the literal sweep of the words of clause 1 of section 2 of article 3, nor the absence of restriction in the letter of the Eleventh Amendment, permits the conclusion that in all controversies of the sort described in clause 1, and omitted from the words of the Eleventh Amendment, a State may be sued without her consent. Thus clause 1 specifically provides that the judicial power shall...