Simon Sterne, for plaintiff in error.
J. E. Shepherd and C. M. Busbee, for defendant in error. [161 U.S. 240, 241]
Mr. Justice WHITE delivered the opinion of the court.
By an ordinance of the constitutional convention of the state of North Carolina, held in 1868, certain bonds were authorized to be issued in aid of the Chatham Railroad. While there was some question raised on the subject in the discussion at bar, it may be, for the purposes of this case, conceded that, at the time the ordinance authorizing the bonds was passed, section 11 art. 4, of the constitution of North Carolina, adopted in 1868, was in existence, and was as follows:
In 1879 an amendment to the constitution of North Carolina was submitted by the legislature of that state to the people thereof, and this amendment was ratified by a popular vote in 1880. It is as follows:
After the incorporation of this amendment in the constitution of the state, the plaintiff in error commenced in the supreme court of North Carolina an action against that state for the recovery of the amount of interest due on coupons forming part of certain bonds which had been issued under the ordinance of the constitutional convention of 1868, [161 U.S. 240, 242] above referred to. The attorney general of the state, reserving all its rights to plead to the jurisdiction, answered, denying both the existence and validity of the bonds and coupons declared on, and pleading the statute of limitations of three and ten years. Thereupon a motion was made by the attorney general on behalf of the state to dismiss the action for want of jurisdiction. This motion prevailed, the court referring, as its grounds for dismissing the suit, to the reasons assigned by it in the previous cases of Horne v. State, 84 N. C. 462, and Baltzer v. State, 104 N. C. 265, 10 S. E. 153. The cases thus referred to held that the power of the court to recommend claims to the favorable consideration of the legislature had (quoad claims identical in legal nature with the coupons sued on) been repealed by the constitutional amendment to which we have referred, and that the court was without jurisdiction to render judgment of recommendation on a claim against the state when its validity was denied by the state constitution. To the judgment thus rendered, this writ of error is prosecuted.
In Railroad Co. v. Tennessee, 101 U.S. 337 , this court was called upon to determine whether the repeal, by a state, of a statutory provision authorizing itself to be sued in its own courts, but which gave no power to the courts to enforce their judgments, and which enacted that, when such judgments were rendered, the money could only be obtained through an appropriation by the legislature, was an impairment of the obligation of a contract entered into by the state while the authority conferred by the statute was unrepealed. In speaking on this subject, this court, by Mr. Chief Justice Waite, said:
Subsequently, in the case of Railroad Co. v. Alabama, 101 U.S. 832 , the same question was presented on a state of facts somewhat stronger in favor of the contention that there was a contract right than that which had been considered in the foregoing case. There the facts were that the statute of the state, existing at the time the contract was made, not only authorized a judgment to be rendered against the state, but provided (we quote from the opinion) 'that, if a judgment should be rendered against the state, it was the duty of the comptroller, on the certificate of the clerk of the court, together with that of the judge who tried the cause, that the recovery was just, to issue his warrant for the amount, but no certificate could issue until six months after the recovery of the judgment. Code 1867, 2536. It was also the duty of the treasurer to pay all warrants drawn on him by the comptroller under the authority of law. Code, 442. But the constitution in force then and now provides in express terms that no money should be drawn from the treasury but in consequence of appropriations made by law. Const. 1834 and 1870, art. 2, 24.' Upon these facts, speaking through Mr. Chief Justice Waite, this court again said:
The statute of North Carolina which we now consider, and which gave the courts of that state power to examine and recommend claims against it to the legislature, is much more restrictive than were the statutes of Tennessee and Alabama passed on in the cases just cited. Applying to this case the reasoning of this court in those cases expressed, it becomes clear that the authority given by the state of North Carolina to its court not being a part of the contract on which the plaintiff in error had a right to rely, its repeal did not impair the obligations of his contract in the sense conveyed by those words when used in the constitution of the United States. This proposition so necessarily results from the authorities, and is so self-evident in reason, that it was not denied in the discussion at bar. Indeed, it was frankly conceded that the exercise by a state of the power to repeal a grant of authority to its courts to audit claims against itself would not in any manner violate the obligations of contracts which had been entered into by the state at a time when the power existed. Yet, whilst this concession was made, it was asserted that the impairment of the obligation of the contract here claimed to have been accomplished, arises from the fact that the state court erroneously held that the amendment to the state constitution repealed the court's authority to examine and recommend the claim presented to it, when in fact such repeal had not taken place. In other words, it was argued that, although the right to have the claim examined and recommended was existing and unrepealed, the state court had impaired the obligations of the contract by holding that such right was nonexisting, because repealed by a subsequent provision of the state constitution. But this is mere reasoning in a vicious circle, for the concession that the right could be taken away without violating the contract clause of the constitution necessarily implied that the decision of the state court as to repeal vel non in no way involved rights protected from impairment [161 U.S. 240, 246] under the constitution of the United States. It is apparent that no rights under the constitution of the United States arose in favor of the claimant from the provision conferring on the courts of the state the authority to examine and recommend, since all the benefits resulting therefrom could admittedly be withdrawn without violating the contract. To give effect to the contention of the plaintiff in error, we should be obliged to announce the contradictory proposition that, where there were no rights under the constitution of the United States to be impaired, yet a decision of the state court had impaired such rights. We should also be obliged to hold that, although the state could at its will take away the right without impairing the contract, yet a decision by the court of last resort of the state, that the right had been taken away, was an impairment of the contract. The fallacy contained in the argument results from overlooking the fact that, the moment it is admitted that the repeal of the right to have the claim examined and recommended is no impairment of the obligation of the contract secured under the constitution of the United States, the question whether or not such right has been repealed becomes purely a question of state law, to be determined by the state courts.