652 



OBLIGATION OF CONTRACTS. 



coupons of such bonds, can not use them in payment 

 of taxes without expending more money to enforce 

 compliance with their contract than the coupons are 

 worth. 



I can not agree that the courts of the Union are 

 powerless against State legislation, which is so mani- 

 festly designed to destroy contract rights protected by 

 the Constitution of the United States. 



Without stopping to speculate upon the disastrous 

 consequences which would result both to the business 

 interests and to the honor of the country if all the 

 States should enact statutes similar to those passed by 

 Virginia, I suin up what has been so imperfectly said 

 by me : If, as is conceded, Antoni is entitled by the 

 contract to have his coupon received in payment of 

 taxes, when offered for that purpose,, and if, as is also 

 conceded in the opinion of the majority, he was en- 

 titled, by the laws in force when the contract was 

 made, to the remedy of mandamus to compel the tax- 

 collector to receive his coupons and discharge pro 

 tanto his taxes, it is clear that the subsequent statute 

 does impair the obligation of the contract, by impos- 

 ing new and burdensome conditions, which not only 

 prohibit the collector from receiving coupons in pay- 

 ment of taxes when offered, but require the tax-payer 

 to pay his taxes in money, not to be returned to him 

 unless, upon the occasion of each tender of coupons, 

 he submits (without the possibility of recovering his 

 costs of suit) to a jury trial, and proves to the satis- 

 faction of twelve jurymen that the coupons tendered 

 are genuine, and legally receivable for taxes. 



A separate opinion was also written by Jus- 

 tice Matthews, who concurred in the judgment 

 of the Court, but not in the grounds on which 

 the Court rested its decision. He agreed that 

 the State of Virginia, by the act of 1871, en- 

 tered into a valid contract with the holders of 

 its bonds to receive their coupons in payment 

 of taxes ; and that any subsequent statute which 

 denies this right is a breach of its contract and 

 a violation of the Constitution of the United 

 States. But for a breach of its contract by a 

 State, no remedy is provided by the Consti- 

 tution of the United States against the State 

 itself; and a suit to compel the officers of a 

 State to do the acts which constitute a perform- 

 ance of its contract by the State, is a suit against 

 the State itself. If the State furnishes a reme- 

 dy by process against itself or its officers, that 

 process may be pursued because it has con- 

 sented to submit itself to that extent to the 

 jurisdiction of the courts ; but if it chooses to 

 withdraw its consent by a repeal of all reme- 

 dies, it is restored to the immunity from suit, 

 which belongs to it as a political community, 

 responsible in that particular to no superior. 



Justices Bradley and Gray concurred in the 

 judgment on both grounds : that stated in the 

 opinion of the court delivered by the Chief- 

 Justice, and that presented by Justice Mat- 

 thews. 



THE LOUISIANA CASE. In 1874 the Legisla- 

 ture of Louisiana passed an act providing for 

 an issue of bonds for the purpose of consoli- 

 dating and reducing the floating and bonded 

 debts of the State. The bonds were payable 

 to bearer forty years from January 1, 1874, 

 and bore interest at the rate of seven per cent 

 per annum, payable semi-annually. The Gov- 

 ernor, Lieutenant-Governor, Auditor, Treas- 

 urer, Secretary of State, Speaker of the House 



of Representatives, and a person to be elected 

 by these officers as a fiscal agent of the State, 

 were created a Board of Liquidation, with 

 power to issue the bonds and exchange them 

 for all valid outstanding bonds and certain war- 

 rants on the Treasury, at the rate of sixty cents 

 in the new bonds for one dollar of old bonds 

 and warrants. The act then provided for an 

 annual tax levy of five and one half mills for the 

 purpose of paying the principal and interest on 

 the bonds, and declared that " the revenue de- 

 rived therefrom is hereby set apart and appro- 

 priated for that purpose and no other." It was 

 made a felony, punishable by imprisonment for 

 not more than ten nor less than two years, 

 for the fiscal agent, or any officer of the State, 

 or Board of Liquidation, to divert the fund 

 from its legitimate channel. The act further 

 declared that " the interest tax aforesaid shall 

 be a continuing annual tax until the said con- 

 solidated bonds shall be paid or redeemed, prin- 

 cipal and interest ; and the said appropriation 

 shall be a continuing annual appropriation 

 during the same period, and this levy and ap- 

 propriation shall authorize and make it the 

 duty of the Auditor and Treasurer, and the 

 said board, respectively, to collect said tax 

 annually, and pay said interest, and redeem 

 said bonds, until the same shall be fully dis- 

 charged." By other sections it was provided 

 that any judge, tax-collector, or any other 

 officer of the State, obstructing tKe execution 

 of the act, or failing to perform his official 

 duty, should be guilty of a misdemeanor ; that 

 each provision of the act should be a contract 

 between the State and every holder of the con- 

 solidated bonds ; that the tax-collectors should 

 not pay over any moneys collected by them to 

 any other person than the State Treasurer ; and 

 that no court or any judge should have power 

 to enjoin the payment of principal or interest of 

 nny of the bonds, or the collection of the special 

 tax therefor. Immediately after the passage of 

 the act the following amendment to the Con- 

 stitution was adopted : 



The issue of consolidated bonds authorized by the 

 General Assembly of the State, at its regular session 

 in the year 1874, is hereby declared to create a valid 

 contract between the State and each and every holder 

 of said bonds, which the State shall by no means and 

 in no wise impair. The said bonds shall be a valid 

 obligation of the State in favor of any holder thereof, 

 and "no court shall enjoin the payment of the principal 

 or interest thereof, or the levy and collection of the tax 

 therefor ; to secure such levy, collection, and payment, 

 the judicial power shall be exercised when necessary. 

 The tax required for the payment of the principal and 

 interest of said bonds shall be assessed and collected 

 each and every year until the bonds shall be paid, 

 principal and interest, and the proceeds shall be paid 

 by the Treasurer of State to the holders of said bonds, 

 as the principal and interest of the same shall fall due, 

 and no further legislation or appropriation shall be 

 requisite for the said assessment and collection and 

 for such payment from the Treasury. 



Under this authority consolidated bonds to 

 the amount of about twelve million dollars 

 were issued. 



In 1879 a new Constitution was adopted. 



