Utter v. Franklin

• Decision Date: 22 March 1901
• Docket Number: Civil 546
• Parties: JAMES L. UTTER et al., Plaintiffs, v. BENJAMIN J. FRANKLIN et al., Loan Commissioners of the Territory of Arizona, Defendants
• Court: Arizona Supreme Court

64 P. 427

7 Ariz. 300

JAMES L. UTTER et al., Plaintiffs, v. BENJAMIN J. FRANKLIN et al., Loan Commissioners of the Territory of Arizona, Defendants

Civil No. 546

Supreme Court of Arizona

March 22, 1901

ORIGINAL APPLICATION for Writ of Mandamus.

Barnes & Martin, for Plaintiffs.

Congress has complete control over the territories. Const., art. IV sec. III, subd. 2.

The organic act under which a territory is organized takes as to the territory the place taken by a constitution, and an act of the territorial legislative assembly derives its legal force and validity from such organic act. 25 Am. & Eng. Ency of Law, 956.

On the ground that the legislature had legislated beyond the limitations placed upon the legislative power by Congress the above act was held to be void. For want of legislative power delegated by Congress, the act was held to be ultra vires. To cure this defect Congress passed the act of June 6, 1896. This law is retrospective, and intended so to be. It declares that all bonds, warrants, and other evidences of indebtedness heretofore funded are hereby declared to be valid and legal and all bonds and other evidences of indebtedness heretofore issued under the authority of the legislature of said territory are hereby confirmed, approved, and validated.

If Congress had power to enact such a law, then the act validates said bonds.

As said above, Congress has full power to legislate for the territories. It may do so directly, or may create a legislative assembly with power to legislate. Having done the latter, its supreme power is not lost.

As was said by the supreme court of the United States, in First National Bank v. Yankton, 101 U.S. 129, "There was no express reservation of power in Congress to amend the acts of the territorial legislature, but none was necessary. Such a power is an incident of sovereignty, and continues until granted away. Congress may not only abrogate laws of the territorial legislatures, but may itself legislate directly for the local government. It may make a void act of the territorial legislature valid, and a valid act void. In other words, it has full and complete legislative authority over the people of the territories and all departments of the territorial government."

In the case of Insurance Co. v. Bales of Cotton, 1 Pet 543, Justice Marshall, in 1828, speaking for the court, decided that the power of Congress to legislate for the territories "is unquestioned," and the case of Dred Scott v. Sanford, 19 How. 633, sustains this doctrine. Doucheneau v. House, 10 P. 839.

New Orleans v. Clark, 95 U.S. 644. Bonds issued were invalid because the city had exceeded the power by law to issue them. The question presented was, "Whether it was competent for the legislature of Louisiana to legalize the issue of the bonds, if for any cause they were originally invalid." The court answers in the affirmative, saying: "The books are full of cases where claims, just in themselves, but which from some irregularity or omission in the proceeding by which they were created could not be enforced in the courts of law, have been thus recognized and their payment secured."

The legislature may direct a municipal corporation to apply funds arising from taxation in payment of a claim that could not be enforced at law.

"The legislative authority is only limited by constitutional provisions." Mount v. State, 90 Ind. 29, 46 Am. Rep. 192.

The constitution has made no such limitation upon the power of Congress to legislate for the territories.

In Rogers v. Keokuk, 154 U.S. 546, 14 S.Ct. 1162, the court treats the question in a very summary manner. The opinion is short, cites no authority, and treats the matter as a settled question, and says in a few words that the legislature having power to authorize a municipal corporation to subscribe for stock in a railway company, that the act in question gave validity to the bonds issued, notwithstanding any informality or illegality in their issuing. Other cases are Randall v. Krieger, 23 Wall. 137; St. Joseph v. Rogers, 16 Wall. 666; Thomson v. Lee County, 3 Wall. 327; Beloit v. Morgan, 7 Wall. 619; City v. Lamson, 9 Wall. 485; Campbell v. Kenosha, 5 Wall. 195; Marsh v. Fulton County, 10 Wall. 676; Otoe County v. Baldwin, 111 U.S. 1, 4 S.Ct. 265; Thompson v. Perrine, 103 U.S. 806; Dows v. Elmwood, 34 F. 114; Grenada v. Brogden, 112 U.S. 261, 5 S.Ct. 125; Jasper County v. Ballou, 102 U.S. 745; McMillen v. Dubuque, 1 Wall. 220; State v. Hoffman, 35 Ohio St. 437; Dentzel v. Waldie, 30 Cal. 145; People v. Supervisors, 20 Mich. 104; May v. Holbridge, 23 Wis. 97; Brewster v. Syracuse, 19 N.Y. 116; Kunkel v. Franklin, 13 Minn. 127, 97 Am. Dec. 226; Stuart v. Warren, 37 Conn. 225; McMillan v. Boyce, 6 Iowa, 330; Board v. Bright, 18 Ind. 83; Gibbon v. Railroad Co., 46 Ala. 410; Thomas v. Leland, 24 Wend. 65; Weister v. Hade, 52 Pa. St. 474; Johnson v. Campbell, 49 Ill. 316.

This proceeding was begun against the board of loan commissioners of the territory of Arizona. The fact that some of the persons who were loan commissioners at the time the suit was begun have ceased to be such does not affect the proceeding.

Speaking with reference to the writ of mandamus the supreme court of the United States (103 U.S. 480) says (p. 483): "The proceedings may be commenced with one set of officers and terminated by another, the latter being bound by the judgment." See, also, Dillon on Municipal Corporations, 4th Ed., sec. 861b; Leavenworth County Commrs. v. Sellew, 99 U.S. 624; People v. Collins, 19 Wend. 56; Warner Valley Stock Co. v. Smith, 165 U.S. 28, 17 S.Ct. 225.

C. W. Wright, and Rochester Ford, for Appellee.

OPINION

SLOAN, J.

The plaintiffs, December 31, 1896, filed their petition in this court, which prayed for a writ of mandate to compel the defendants, who were then, respectively, governor, auditor and secretary of the territory, and who, by virtue of holding said offices at the date of the filing of said petition, were the loan commissioners of the territory, to fund the bonds, and the interest due thereon, issued by Pima County in aid of the Arizona Narrow-Gauge Railroad Company under the provisions of a territorial act of February 21, 1883. The defendants demurred to the petition, and, by way of answer, set up that the bonds sought to be funded, in the suit of Lewis against Pima County, by the district court of said Pima County, were declared to be void and of no binding obligation upon the said county; that the judgment of the district court was, upon appeal, affirmed by the supreme court of the territory, and on appeal from the judgment of this court the latter was affirmed by the supreme court of the United States; that the judgment so rendered and affirmed in the Lewis case was res adjudicata and binding upon the plaintiffs in this suit. The records of this court in the present case show that the demurrer to the petition was sustained, and the petition dismissed, whereupon an appeal was taken to the supreme court of the United States. The latter court reversed the judgment of this court, and remanded the cause "for further proceedings not inconsistent with the opinion." Utter v. Franklin, 172 U.S. 424, 19 S.Ct. 183, 43 L.Ed. 498. In the opinion the supreme court held that the judgment in the case of Lewis, holding that the bonds were invalid because the territorial legislature had no authority to authorize their issuance under the organic law, "was res adjudicata only of the issues then presented, of the facts as they then appeared, and under the legislation then existing"; that the act of Congress of June 6, 1896, cured this defect, and validated the territorial act of February 21, 1883, and made it the duty of the loan commissioners to fund the bonds in question. Upon the filing of the mandate of the supreme court in this court, the defendants asked leave to file an amended return raising new issues of fact, and setting up that the bonds in question were "not sold or exchanged in good faith and in compliance with the act of the legislature by which they were authorized," and so were not of the class of bonds validated by the act of June 6, 1896, and required to be funded thereby. Leave to file this amended return was granted for the reason that the record in this court, where the cause originated, discloses that the judgment of this court from which the appeal was taken to the supreme court of the United States was rendered upon the issue of law raised by the demurrer, and not upon any issue of fact raised by the original return. We took the view that in the state of the record the mandate of the supreme court reversing the cause, and remanding it to this court "for proceedings not inconsistent with the opinion," made it our duty to consider and decide any issue of fact, properly pleaded, which amounts to a defense, and which is not in fact decided by the supreme court in passing upon the issue of law presented by the demurrer; that, under the law and practice regulating appeals of this character, such a mandate, being general in its terms, is to be construed as justifying this court in considering and deciding any question left open by the mandate and opinion of the appellate court. Ex parte Union Steamboat Co., 178 U.S. 318, 20 S.Ct. 904, 44 L.Ed. 1084. The issue of fact raised by the amended return, and which, in our view, was left open by the opinion and mandate of the supreme court, involves the question as to whether the bonds were exchanged by the county of Pima for the bonds of the Arizona Narrow-Gauge Railroad Company in good faith, and in compliance with the act of the territorial legislature of February 21, 1883. Upon the order permitting the defendants to file their amended return being made, a commissioner was appointed to take and...