Western Union Telegraph Co. v. Henderson

• Decision Date: 13 June 1895
• Docket Number: 9,126.
• Citation: 68 F. 588
• Parties: WESTERN UNION TEL. CO. v. HENDERSON, Auditor.
• Court: United States Circuit Court, District of Indiana

68 F. 588

WESTERN UNION TEL. CO. v. HENDERSON, Auditor.

No. 9,126.

United States Circuit Court, D. Indiana.

June 13, 1895

Butler Snow & Butler, for complainant.

W. A Ketcham, Ind. Atty. Gen., Alonzo G. Smith, Merrill Moores and Kern & Bailey, for defendant.

BAKER District Judge.

This is a suit in equity by the Western Union Telegraph Company, a corporation created and organized under the laws of the state of New York, and a citizen thereof, against John O Henderson, auditor of state of the state of Indiana, and a citizen thereof, to restrain the defendant from certifying and transmitting to the several county auditors of the state the valuations of the property of the complainant in said counties for the purposes of taxation as fixed by the state board of tax commissioners under the provisions of an act of the general assembly of the state of Indiana approved March 6, 1893 (Acts 1893, p. 374; 3 Burns' Rev.St.Ind. § 8473 et seq.). The bill alleges that the defendant is threatening and about to certify and transmit said valuations for entry upon the tax duplicates of the several counties of the state, by means whereof an apparent charge against and cloud upon the title of the complainant's property would be wrongfully created, and that by this means great and irreparable damage and injury would be sustained by the complainant. It is alleged that the act of March 6, 1893, was not enacted in accordance with the provisions of the constitution of the state of Indiana; and, if it was so enacted, that it is invalid because in violation of various provisions of the constitution of the state of Indiana and of the constitution of the United States, which provisions are set forth with great particularity in the bill of complaint. It is further insisted that, if the above-mentioned act is not invalid for any of the foregoing reasons, the court ought to grant the injunctive relief prayed for because the state board of tax commissioners had adopted a rule of valuation the necessary result of which is to fix valuations on complainant's property higher than those fixed upon other property in the state. The court granted a temporary restraining order, and now the attorney general of the state moves the court to dissolve the same and to dismiss the bill for want of equity. The sufficiency of the bill is also presented by a demurrer which asserts that the court is without jurisdiction to entertain the suit, because it is practically a suit against the state, and also on the ground that the bill does not state facts sufficient to constitute a cause of action entitling the complainant to any equitable relief.

The claim that the court is without jurisdiction has been earnestly and elaborately argued by the attorney general of the state both orally and upon a printed brief; and, while the court has at no time felt any serious doubt of its jurisdiction, it has felt constrained to yield to the request of the attorney general, and examine the cases decided by the supreme court touching the jurisdiction of the circuit courts of the United States where suits are brought against officers of the state to restrain them from doing an alleged tortious or unlawful act under the pretended authority of an unconstitutional statute, or a statute which is claimed to be unconstitutional. The question lying at the threshold of every case in the courts of the United states is whether, on the fact of the bill, assuming its allegations to be true, the court has jurisdiction. The cases decided by the supreme court are too numerous to justify a review of all of them, and I shall content myself with an examination of those in which the question of jurisdiction has been most directly and exhaustively considered.

Under the constitution, as it was originally adopted, it was held that a citizen of one state might sue any state other than that of his residence in the courts of the United States. Chisholm v. Georgia, 2 Dall. 419. The result of this decision led to a speedy adoption of the eleventh amendment to the constitution of the United States, which declares that 'the judicial power of the United States shall not be construed to extend to any suit in law or equity commenced or prosecuted against one of the United States by citizens of another state, or by citizens or subjects of any foreign state. ' The meaning of this amendment was first drawn in question in the case of Osborn v. Bank, 9 Wheat. 738,846, which was a suit in equity brought in a court of the United States by the bank against the auditor and treasurer of the state of Ohio to restrain them from seizing the money of the bank and applying the same to the payment of taxes and penalties claimed to be due to the state. The state also asserted title to the money so taken by the defendants as its officers and agents. The question of jurisdiction was argued with conspicuous zeal and ability, and was decided on great deliberation, the court affirming the jurisdiction of the courts of the United States in one of the most masterly opinions ever delivered by that great expounder of the constitution, Chief Justice Marshall. He declared that:

'It may, we think, be laid down as a rule, which admits of no exception, that, in all cases where the jurisdiction depends on the party, it is the party named on the record.'

The court added:

'The state not being a party on the record, and the court having jurisdiction over those who are parties on the record, the true question is not one of jurisdiction, but whether, in the exercise of its jurisdiction, the court ought to make a decree against the defendants; whether they are to be considered as having a real interest or as being only nominal parties.'

Governor of Georgia v. Madrazo, 1 Pet. 110, was a suit to recover a sum of money, arising from the sale of certain slaves, which had been covered into the treasury of the state, and also to recover the possession of certain other slaves who had been illegally imported into the state, and who were in possession of the governor, pursuant to an act of congress, and also pursuant to an act of the general assembly of the state. It was held that the claim was, in effect, one against the state, and, therefore, that the circuit court of the United States was without jurisdiction. The governor appeared in the case, and filed a claim on behalf of the state to the slaves remaining unsold and to the proceeds of those who were sold. The court, by Mr. Chief Justice Marshall, say:

'The information of the governor of Georgia professes to be filed on behalf of the state, and is in the language of the bill filed by the governor of Georgia in behalf of the State against Brailsford, 2 Dall. 402. If, therefore, the state was properly considered as a party in that case, it may be considered as a party in this.'

The chief justice further said:

'In U.S. v. Peters, 3 Dall. 121, the court laid down the principle that, although the claims of the state may be ultimately affected by the decision of a cause, yet if the state be not necessarily a defendant, the courts of the United States are bound to exercise jurisdiction. In the case of Osborn v. Bank of U.S., 9 Wheat. 738, this question was brought more directly before the court. It was argued with equal zeal and talent, and was decided on great deliberation. In that case the auditor and treasurer of the state defendants, and the title of the state itself to the subject in contest was asserted. In that case the court said: 'It may, we think, be laid down as a rule, which admits of no exception that, in all cases where the jurisdiction depends on the party, it is the party named on the record.' The court added: 'The state not being a party on the record, and the court having jurisdiction over those who are parties on the record, the true question is not one of jurisdiction, but whether, in the exercise of its jurisdiction, the court ought to make a decree against the defendants; whether they are to be considered as having a real interest or as being only nominal parties.''

In the case of Bank v. Wister, 2 Pet. 319, the jurisdiction of the court was questioned on the ground that the state of Kentucky was the sole proprietor of the stock of the bank, for which reason it was insisted that the suit was virtually against the state. This contention was denied, the court saying that the question was no longer an open one; that the case of U.S. Bank v. Planter's Bank of Georgia, 9 Wheat. 904, was a much stronger one for the defendant than the present case, for there the state of Georgia was not only a proprietor, but a corporator.

In the case of Charles River Bridge v. Warren Bridge, 11 Pet. 419, 571, 585, which was a suit by the former to enjoin the latter from erecting a bridge across Charles river, the jurisdiction of the court was challenged on the ground that the suit was brought to invalidate a charter granted by the state of Massachusetts, and it was insisted that the state was the substantial party, though not named on the record and that the defendants who were named on the record were the agents of the state, and acting under its authority. It was urged that, if jurisdiction was asserted by the court, they would do indirectly what the constitution prohibited them from doing directly. The court (Mr. Justice McLean delivering the opinion) overruled this claim, and asserted the jurisdiction of the court. Mr. Justice Story, with whom M. Justice Thompson concurred, while dissenting upon other questions, agreed with the court in asserting its jurisdiction. He declared that 'it is no objection to the jurisdiction of the circuit courts of the United States that the defendant is a servant or agent of the state, and the act complained of done under its authority, if it be tortious and...