City of Dawson v. Columbia Ave. Saving-Fund, Safe-Deposit, Title & Trust Co.

MAXEY, District Judge, after stating the case, delivered the following opinion: If the case is properly here on appeal, the merits of the controversy should be considered and determined. If, however, it is not properly in this court, the appeal should be dismissed. The appellate jurisdiction of this court in reference to interlocutory orders made by the circuit courts, refusing or granting injunctions, is limited by the amendatory act of February 18, 1895, to those cases “in which an appeal from a final decree may be taken under the provisions of this act to the circuit court of appeals.” Under the fifth section of the act of March 3, 1891, by virtue of which the circuit courts of appeals were established, and their jurisdiction, defined (26 Stat. 826), appeals may be taken from the circuit courts directly to the supreme court in the following cases: “In any case in which the jurisdiction of the court is in issue; in such cases-the question of jurisdiction alone shall he certified to the supreme court from the court helow for decision. * ⅜ * In any case that involves the construction or application of the constitution of the United States. * * * In any case in which the constitution or law of a state is claimed to he in contravention of the constitution of the United States.” - By the sixth section- of the act the appellate jurisdiction of the circuit courts of appeals is confined to cases other than those provided for in the fifth, section. If, then, cases which involve the construction or application of the constitution of the United States, and cases in which the constitution or law of a state is claimed to be in contravention of the national constitution, go by appeal or writ of error directly to the supreme court, it would seem to- follow as a logical sequence that they cannot come to this court from final judgments or decrees rendered by the circuit courts. And such appears to he the construction placed upon the act by the supreme court and the circuit courts of appeals in the following cases: Penn Mut. Life Ins. Co. v. City of Austin, 168 U. S. 685, 18 Sup. Ct. 223, 42 L. Ed. 626; City of Walla Walla v. Walla Walla Water Co., 172 U. S. 1, 19 Sup. Ct. 77, 43 L. Ed. 341; Scott v. Donald, 165 U. S. 58, 17 Sup. Ct. 265, 41 L. Ed. 632; Holder v. Aultman, 169 U. S. 88, 18 Sup. Ct. 269, 42 L. Ed. 669; Horner v. U. S., 143 U. S. 570, 12 Sup. Ct. 522, 36 L. Ed. 266; Hastings v. Ames, 32 U. S. App. 485, 15 C. C. A. 628, 68 Fed. 726; Wrightman v. Boone Co., 31 C. C. A. 570, 88 Fed. 435; City of Indianapolis v. Central Trust Co., 27 C. C. A. 580, 83 Fed. 529. It was said by Mr. Justice White, as the organ of the court, in the case first cited (168 U. S., at page 694, 18 Sup. Ct., at page 226, and 42 L. Ed., at page 630): “By the fifth section of the act of March 3, 1891, c. 517 (26 Stat. 826), creating the circuit courts of appeals, jurisdiction is conferred on this court to review by direct appeal any final judgment rendered by the circuit court ‘in any case in which the constitution or law of a state is claimed to be in contravention of the constitution of the United States.’ There can be no doubt that the case at bar comes within this provision. The complainants [207] in tlu'ii* I>m in express terms predicated tlieir right to the relief sought upon llu> averment that certain ordinances adopted by the municipal authorities of the city of Austin, and an act of the legislature of the state of Texas referred to in the bill, impaired the obligations of the contract which the bill alleged had been entered into with the complainants by the city of Austin, and that both the law of the state of Texas and the city ordinances were in contravention of the constitution of the United States. No language could more plainly bring a case within the letter of a statute than do these allegations of the bill bring this case within the law of 1891.” And at page 695, 168 U. S., at page 227, 18 Sup. Ct., and at page 630, 42 L. Ed., the court further said: “Cut the words of the statute which empower this court to review directly the action of the circuit court are that such power shall exist wherever it is claimed on the record that the law of a state is in contravention of the federal constitution. Of course, the claim must be real, * s * not fictitious and fraudulent.” In Hie present case, jurisdiction of the circuit court is claimed by the appellee on the ground that the suit is one arising under the constitution and the laws of the United States. “Your orator shows,” employing the language of the amended bill, “that the present suit aiises under the constitution and laws of the United States; and your orator invokes the jurisdiction of the circuit court of the United States in order to set up and enforce the protection guarantied by the constitution of the United States to contract rights, and to defeat and prevent the effort of the city to impair the obligation of the aforesaid contract.” While it is true that jurisdiction is also claimed on the ground of diversity, of citizenship, yet, if the parties be arranged according to their respective interests in the subject-matter of the suit, which may always be done in determining jurisdictional questions, it is extremely questionable^ whether the circuit court was invested with jurisdiction, except upon the ground that the suit was one arising under the constitution of the United States. It also clearly appears that the appellee relies upon the constitution as a protection- and shield of defense against the alleged arbitrary, unauthorized, and hostile acts of the city of Dawson. It is strenuously insisted by the appellee that the ordinance of February 21, 185)0, constitutes a valid and binding contract between the city of Dawson and the Dawson Waterworks Company, and that the constitution forbids its obligation to be impaired as the city attempted to impair it, by the passage of the repudiating ordinance of dune, 185)1, and other ordinances subsequently enacted. “These ordinances,” said the supreme court in the case, to which reference has already been made, “were but the exercise by the city of a legislative power which it assumed had been delegated to it by the state, and were therefore, in legal intendment, the equivalent of laws enacted by the state itself” Penn Mut. Life Ins. Co. v. City of Austin, supra; City of Walla Walla v. Walla Walla Water Co., supra; City Ry. Co. v. Citizens’ St. R. Co., 166 U. S. 557, 17 Sup. Ct. 653, 41 L. Ed. 1114. Here, then, is a real substantial claim (not fictitious or fraudulent) that the city of Dawson is endeavoring to set aside and repudiate its solemn contract as evidenced by the ordinance of February 21, 185)0; and the contract clause of the constitution is invoked by the [208] appellee to avert the threatened danger. It is also contended by the appellee that the refusal of the city to pay for water according to the requirements of the contract, or to levy taxes, or to be further bound by its contract, and the wrongful conduct of the city in threatening to proceed to erect and operate a rival system of waterworks for Are protection and for supplying the inhabitants of the city with water, would have the effect^ unless restrained and prevented, of depriving the waterworks company and the holders of its bonds of their property without due process of law, in contravention of the constitution of the United States. Thus, we have before us a case involving the construction and application of the constitution of the United States, and one in which the ordinances of the municipality of Dawson are claimed tó be in contravention of the constitution. That the appeal in such a case should go directly to the supreme court from a Anal decree of the circuit court, we think has been plainly shown; and that an appeal from an interlocutory order of the circuit court granting an injunction in a like case does not lie to this court will be made manifest by consulting the following additional authorities: Railroad Co. v. Adams, 35 C. C. A. 635, 93 Fed. 852; City of Macon v. Georgia Packing Co., 9 C. C. A. 262, 60 Fed. 781; Holt v. Manufacturing Co., 25 C. C. A. 301, 80 Fed. 1; City of Indianapolis v. Central Trust Co., 27 C. C. A. 580, 83 Fed. 529; Town of Westerly v. Westerly Waterworks Co., 22 C. C. A. 278, 76 Fed. 467. In the case last cited it is said by the court: “At the argument it was urged that the decision of these cases on final hearing may he based on questions entirely apart from the constitutional questions involved. The argument i's plausible, but delusive. If the decision were so resting on other than constitutional grounds, still, on any appeal from it, the constitutional questions would remain in the case, and might require determination by the appellate court, — a determination which a circuit court of appeals has no authority to pronounce. When constitutional questions are present, the whole case must go to the supreme court.” In the case of Wrightman v. Boone Co., 31 C. C. A. 570, 88 Fed. 435, Judge Sanborn, speaking for the court, at pages 572, 573, 31 C. C. A., and page 437, 88 Fed., used the following language: “A careful examination of these sections of the act of congress in Hastings v. Ames, 32 U. S. App. 485, 15 C. C. A. 628, 68 Fed. 726, and in Pauley Jail Bldg. & Mfg. Co. v. Crawford Co., 28 C. C. A. 579, 84 Fed. 942, led us to the conclusion that, if it is claimed that a law of a state is void because it contravenes the constitution of the United States, a circuit court of appeals has no jurisdiction of the ease, although it may involve the consideration of many other questions.” We are of the opinion that the appeal in this case should be dismissed, and it is so ordered. McCORMICK, Circuit Judge. I am unable to concur in the judgment of the court in this case. The complainant invoked the jurisdiction of the circuit court on the ground of diverse citizenship, and on the further ground that its case presented a federal question. The appellants, who were respondents in the circuit court, contended that neither of these grounds existed in fact, and contended further that the case did not show matter within the equity jurisdiction of the circuit [209] court. The circuit court retained jurisdiction, and passed the decree set out in the opinion of the majority. That decree, being interlocutory, will no I support an appeal to the supreme court, and cannot be reviewed at all, in advance of final hearing and decree, unless it can be reviewed by this court. The appellants, not waiving, but insisting on, their objections to the jurisdiction of the circuit court, do not question the jurisdiction of this court to review the interlocutory decree, and the appellee has not questioned the jurisdiction of this court to entertain this appeal. It is by no means clear to me that if no injunction had been granted, and the case had proceeded to final hearing and decree, appeal would lie only to the supreme court. U. S. v. Jahn, 155 U. S. 109, 15 Sup. Ct. 39, 39 L. Ed. 87; Horner v. U. S., 143 U. S. 570, 12 Sup. Ct. 522, 36 L. Ed. 266; City of New Orleans v. Benjamin, 153 U. S. 411, 14 Sup. Ct. 905, 38 L. Ed. 764; Green v. Mills, 16 C. C. A. 516, 69 Fed. 852, 30 L. R. A. 90. It seems to me that the better construction of the statutes and of the adjudged cases of controlling authority requires that we should treat the provisions of section 7 of the act creating the circuit courts of appeals as highly remedial, and intended to afford a speedy review by an appellate tribunal of all interlocutory orders or decrees granting or continuing an injunction. On such an appeal we do not necessarily pass on the merits of the case as presented in the circuit court. 2sor are we even required, on such an appeal as this, to pass conclusively on the question of the jurisdiction of the circuit court, where, as in this case, that question is strenuously put in issue. There may be, and there have been, proper cases in which this court, on an appeal like this, would be justified, and perhaps required, to consider and determine the merits of the whole case, but that should not usually be done. It is much safer to wait until the suit has advanced to a final hearing and decree. The practical effect of dismissing this appeal is to affirm the action of the circuit court in passing the interlocutory decree. It may well be that, if we entertained jurisdiction on this appeal, wo would find nothing in the record to justify us in reversing that decree; but, whether we reversed it or affirmed it. the suit would proceed under the chancery rules much the same in either case, except that in case of reversal the appellants might, if they were so advised, and subject to their liability to answer in damages, proceed with the work which the injunction has arrested. Ho question having been made by either of the parties to this appeal as to the jurisdiction of this court in this case, it seems to me that it is not a case in which this court should itself raise that question.