U.S. Supreme Court Armstrong v. Treasurer of Athens County, , 41 U.S. 281 (1842)
Armstrong v. Treasurer of Athens County
41 U.S. (16 Pet.) 281
ERROR TO THE SUPREME COURT
OF THE STATE OF OHIO
An act was passed by the legislature in 1840 by which certain lands held under conveyances from the President and Trustees of the Ohio University at Athens were directed to be assessed and taxed for county and state purposes. A bill was filed by the purchasers of the land against the tax collector praying that he should be perpetually enjoined from enforcing the payment of the taxes because the lands had been exempted by a statute of Ohio of 1804, which the bill alleged entered into the conditions of sale under which the complainants held the land. It was insisted that the act of 1840 violates the contract with the purchasers and is void, being contrary to the clause of the Constitution of the United States which prohibits the states from passing any law violating the obligation of contracts. The Supreme Court of Ohio dismissed the bill of the complainants. The ordinance of 1787, by which a large section of country in Ohio was sold to a company, gave two complete townships of land for the purposes of a university. In 1804, an act of the Legislature of Ohio established the university on the foundation of the fund granted by Congress, and vested the land in the corporation of the university. The act directed the manner in which the land was to be leased, reserving rent to the corporation, and the seventeenth section directed that the land appropriated and vested by the act, should be exempted from all state taxes. In 1826, the legislature authorized all the university land not encumbered with leases, or which had not been reentered by the trustees of the university, or to which they had regained their title, to be sold in fee simple for the benefit of the university. The complainants purchased the land held by them under this statute, and took deeds in fee, no exemption from taxes being contained in the statute or in their deeds. Held that, the lands having been purchased under the act of 1826 and not being held under the act of 1804, were subject to taxation. All the purchasers held under the act of 1826 and cannot go behind it, and their lands are subject, like other persons', to be taxed by the state.
The case of State of New Jersey v. Wilson, 7 Cranch 164, cited and affirmed. In that case, the land had for a sufficient consideration been given by the state to a certain Indian tribe, and was declared to be forever exempt from taxes. The Indians, with the consent of the state, sold the land, and the purchaser of the Indian title obtained the land with the exemption from taxes granted by the state.
In order to give this Court jurisdiction under the twenty-fifth section of the Judiciary Act of 1784, which authorizes the removal of a case by writ of error or appeal from the highest court of a state to the Supreme Court of the United States in certain cases, it must appear on the record itself to be one of cases enumerated in that section, and nothing out of the record certified to this Court can be taken into consideration. This must be shown
First, either by express averment or by necessary intendment in the pleadings in the case or
Secondly, by the directions given by the court, and stated in the exceptions or
Thirdly, when the proceedings are according to the law of Louisiana, by the statement of facts and of the decision as is usually made in such cases by the court, or
Fourthly, it must be entered on the record of the proceedings of the appellate court, in cases where the record shows that such a point may have arisen and been decided, that it was in fact raised and decided, and this entry must appear to have been made by order of the court or by the presiding judge by order of the court and certified by the clerk as part of the record in the state court, or
Fifthly, in proceedings in equity, it may be stated in the body of the final decree of the state court from which the appeal is taken to this Court, or
Sixthly, it must appear from the record that the question was necessarily involved in the decision and that the state court could not have given the judgment or decree which they passed without deciding it.
A bill was filed in the Court of Common Pleas of the County of Athens, in the State of Ohio, by Thomas Armstrong and others stating that they were seized in fee of certain lands purchased by them from the president and trustees of the Ohio University in pursuance of the provisions of an Act of the Assembly of the State of Ohio entitled "an act authorizing the trustees of the Ohio University to dispose of certain lands," passed February 4, 1826. The lands were situated within the two townships granted by Congress, within the bounds of the Ohio Company's purchase, for the endowment of a university. By the 17th section of the Act of the Assembly of Ohio passed February, 1804, entitled, "an act establishing a University in the town of Athens," it is declared "that the lands in the two townships aforesaid, with the buildings which are or may be erected thereon, shall be forever exempt from all state taxes." The bill asserted that the lands were purchased from the president and trustees of the University in the full faith and confidence that the same would remain forever and exempt from all taxes for state purposes.
The bill further represented that notwithstanding the declaration contained in the Act of February 18, 1804, in pursuance of the provisions of an Act of the Assembly of Ohio passed on 21 March, 1840, entitled "an Act to amend an act authorizing the trustees of the Ohio University to dispose of certain lands, passed February 4, 1826," the several tracts of land belonging to the complainants had been appraised by the Assessor of Athens County and placed on the duplicate for taxation by the auditor of the county, and taxes for state and county purposes had been assessed on the said lands. The tax duplicates had been placed
in the hands of a collector, and they had been called upon to pay the same. The bill prayed for an answer and for a perpetual injunction from further proceedings to collect the said taxes, and for further and other relief.
By the Ordinance of Congress of 1787, under which a large body of land was sold to a company, two townships of land were reserved for the purposes of a university, and in 1804, the Legislature of Ohio established a university at Athens, appropriating to it these two townships of land. By this act, the land was to be leased out for ninety-nine years, the rents to be paid to the University, and the land was declared to be exempted from all state taxes. In 1826, the Legislature of Ohio authorized all the land belonging to the University to be sold in fee simple, and nothing was stated in this act exempting the land to be sold from taxes. The appellants purchased the land from the University sold under the authority of this law.
The Treasurer of Athens County appeared and answered the bill, and admitted all the facts stated in it, and also that he intended to collect the taxes assessed on the land, asserting that he had a right to do so by virtue of an Act of the General Assembly of Ohio passed 21 March, 1840, in connection with other general laws of Ohio defining the duties of treasurer, which said act and other further acts he set up as a defense to the complainant's bill.
At the October term of the court of common pleas, the injunction which had been granted on the filing of this bill was made perpetual. The defendant appealed to the supreme court, and the decree of the court of common pleas was, at the December term 1840, reversed, and the complainants were adjudged to pay costs.
In the record of the proceedings of the Supreme Court of Ohio was the following certificate:
"I do hereby certify that in the above-named case there was drawn in question the validity of the statute of the State of Ohio, passed on 21 March 1840, entitled 'An act to amend the act authorizing the trustees of the Ohio University to dispose of certain lands,' passed July 4, 1826, on the ground that it was repugnant to the Constitution of the United States, and
that the decision of the court was in favor of the validity of said statute."
"Chief Judge of the Supreme Court of Ohio"
From the decree of the supreme court of Ohio, the complainants appealed to the Supreme Court of the United States.
CATRON, JUSTICE, delivered the opinion of the Court.
This is a writ of error from a state court, and it has become the duty of this Court, before proceeding to examine the merits of the controversy, to determine whether jurisdiction over it is conferred by the 25th section of the Judiciary Act of 1789. It is true, no question upon that subject was raised in the argument presented for the appellant (the respondent having no counsel), but it has been the uniform practice of this Court in every case of this description to ascertain in the first instance
whether the record presented a case in which we were authorized by law to revise the judgment or decree of a state court. And this question has so often arisen, and parties have been so frequently subjected to unnecessary expense in bringing causes here in which a writ of error or appeal to this Court would not lie, that we have thought this a fit occasion to state the principles upon which the court have constantly acted, and which may now be regarded as the law of the court.
In order to give this Court jurisdiction, under the 25th section of the act of 1789, it must appear on the record itself to be one of the cases enumerated in that section, and nothing out of the record certified to this Court can be taken into consideration.
This must be shown first, either by express averment or by necessary intendment in the pleadings in the case.
Or secondly, by the direction given by the court and stated in the exception.
Or thirdly, when the proceeding is according to the law of Louisiana, by the statement of facts, and of the decision, as usually made in such cases by the court.
Or fourthly, it must be entered on the record of the proceedings in the appellate court, in cases where the record shows that such a point may have arisen and been decided, that it was in fact raised and decided, and this entry must appear to have been made by the order of the court or by the presiding judge, by order of the court, and certified by the clerk as a part of the record in the state court.
Or fifthly, in proceedings in equity, it may be stated in the body of the final decree of the state court from which the appeal is taken to this Court.
Or sixthly, it must appear from the record that the question was necessarily involved in the decision and that the state court could not have given the judgment or decree which they passed without deciding it.
We are not aware of any other mode in which the judgment or decree of a state court can lawfully be brought before us, and we have stated them particularly in order to prevent, in future, the difficulties and discrepancies which have so often arisen on this subject.
In the case now before us, the presiding judge of the Supreme Court of Ohio has certified on the record that the validity of a statute of the state was drawn in question on the ground that it was repugnant to the Constitution of the United States, and that the decision was in favor of the validity of said statute, and this certificate of the judge is certified by the clerk as a part of the record. We presume that the certificate of the presiding judge was made by the authority of the court, and as this bill and answer show that such a point might have arisen, and this certificate on the record states that it did arise and was decided; the case comes within the fourth clause above mentioned, and this Court must take jurisdiction and examine whether the point so certified was rightfully decided.
An act of the Legislature of Ohio, passed in 1840, ordered certain lands held by the complainants to be assessed and taxed. The defendant was the tax collector. The bill prays he be perpetually enjoined from enforcing the payment of the tax because the lands had been exempted by a statute of Ohio of 1804, which entered into the conditions of sale under which the complainants held. Therefore, it is insisted, the act of 1840 violates the contract of purchase, and is void, being contrary to that clause of the Constitution of the United States which prohibits the states from passing any law violating the obligation of contracts. This is the only question presented by the record that we can examine, as the 25th section carefully restricts this Court to specified cases of jurisdiction, beyond which we have no power to go into the cause.
There are six complainants, each setting up a distinct title; they sue jointly, and for the six only, and not for themselves and others equally assessed, as in Attorney General v. Helin, 2 Sim. & Stu. 67, and similar cases, referred to in Story's Equity Plead. § 114, 123. The Supreme Court of Ohio having entertained jurisdiction; this Court must do so likewise. The question of misjoinder is not open to us for revision.
The immediate deeds in fee, from the trustees of the Ohio University to complainants, are not set forth in the pleadings. We take it, however, that they contain no condition exempting the lands from taxation, as the bill is founded on the assumption that the 17th section of the act of 1804 entered into the
contract and imposed the exemption on the state. Whether such an inference arises in favor of the complainants depends on the construction of an ordinance of Congress and the several acts of the Legislature of Ohio, passed in regard to these university lands.
By the ordinance of 1787, 1 Laws U.S. 573, a sale of a large section of country was authorized to be made to a company of individuals, from which is reserved:
"Not more than two complete townships to be given perpetually, for the purposes of a university, to be laid off by the purchasers, as near the center as may be, so that the same shall be of good land, to be applied to the intended object by the Legislature of the state."
Ohio came into the Union as a state in 1802. In 1804 (Ohio Land Laws 226), an act was passed, establishing a university on the foundation of the fund secured by Congress, to be situated on the reserved lands, being townships eight and nine. The lands were vested in the corporation, consisting of the president and trustees, "for the sole use, benefit and support of the university forever."
They were authorized to rent out the lands in separate tracts of not less than eighty acres or more than two hundred and forty acres on a valuation of commissioners, at a yearly rent of six percentum per annum on the estimated value, for ninety years, renewable forever, and from time to time a re-valuation was to take place, to which the subsequent rents were to correspond; with this addition, sec. 12,
"That the said corporation shall have power to demand a further yearly rent on said lands and tenements not exceeding the amount of tax imposed on property of like description by the state, which rents shall be paid at such time and place, to such person, and collected in such manner, as the corporation shall direct."
The 17th section declares
"That the lands in the two townships, appropriated and vested as aforesaid, with the buildings which are or may be erected thereon, shall forever be exempted from all state taxes."
Thus the matter stood until 1826, when the legislature authorized the board of trustees of the university to sell and convey in fee -- simple (1) all the lands situate in the college townships, which were not encumbered with outstanding leases; (2) such of said lands as had been reentered by the board, for a breach
of the conditions of the leases or where this encumbrance had been or might be otherwise removed; (3) to convey in fee to the lessees, respectively, on the payment of such sum of money as would yield at an interest of six percentum per annum on the sum which was yearly reserved in the lease.
Pursuant to this statute, the complainants purchased and took deeds in fee, no exemption from state taxation being contained in the statute under which they took title or in their deeds.
The object of the incorporating act of 1804 was to regulate a public fund, entrusted to the management of the state sovereignty, so as best to accomplish the intention of the donor, the United States. It was a matter of course, in the then state of the college fund, to exempt it from taxes, in the hands of the trustees. The lands brought no income, and could bear no tax, in their uncultivated condition, until they passed into the hands of private individuals. The tenants of the University for twenty years made their own contracts, and were bound to pay the ordinary taxes levied on the inhabitants of Ohio not into the state treasury, but into that of the University. Every change in the general laws in regard to the revenue bound them; as the value of real estate increased, and taxes were imposed in addition to previous burdens, to such an extent, the corporation of the University added to the rent of its tenants. The lands not leased continued exempt from taxation on the fair supposition that they brought no income, and could bear no burdens.
The policy of the act of 1804 is too plain to admit of comment, and its wisdom so manifest as to meet with instant sanction.
But what was the policy of the act of 1826? An entire change of the fund from real estate to a capital in money, vested by loan in the state treasury, was determined on by the corporation. Leave was asked and granted by the legislature to sell the lands and convey them in fee simple to purchasers, giving the tenants a preference in cases where there were existing leases. As regarded the management and nature of the fund to sustain the University, the act of 1804 was to a great extent repealed; by that act the lessees of the corporation were governed; their contracts were founded on it; but with it the purchasers in fee had no concern, their contracts originated in a different policy,
and are sanctioned by a different statute; the complainants actually claim, and could only claim, by force of the act of 1826. This act secured the payments of no taxes to the University as the substitute of the state. It simply authorized the corporation to sell, as an individual might sell, and the respective purchasers took title as from an individual; they were strangers to the act of 1804, with the exception of those provided for by the third section of the act 1826, the value of whose lands was to be governed by the assessment of their rents under the former act, and who were entitled to have deeds in fee on the payment of $100 for every six dollars of annual rent assessed upon them, disregarding the taxes they were bound by the act of 1804 to pay to the corporation. The mode of ascertaining the value makes no difference; all the purchasers hold under the act of 1826, and cannot go behind it, and are subject, like other persons holding lands in fee, to be taxed by the state.
The case relied on by the complainants as ruling this is that of State of New Jersey v. Wilson, 7 Cranch 164. In 1758, the Delaware tribe of Indians agreed with the colonial government of New Jersey to release to the latter all their lands in that colony south of the River Raritan; the government purchased a tract of land on which the Indians might reside, and stipulated, by a legislative act, that this tract should not thereafter be subject to any tax. The Delawares wished to emigrate and join the Stockbridge tribe in New York. In 1801, the State of New Jersey, by a statute, authorized them to sell their lands. This act of assembly contained no exemption from the payment of taxes after the sale. In 1803, the Indian tribe sold to Wilson and others, and the commissioners appointed by order of the legislature conveyed, for and on behalf of the Indians, to the purchasers. On the foregoing state of facts, it was held by this Court that the purchasers, being in under the first grant of 1758 to the Indian tribe, were equally entitled to its benefits, and that no taxes could be levied on the land.
The soundness of the decision we think undoubted. The compact with the Delaware tribe was for a cession to the government of a large body of land; the consideration for the cession was a smaller tract vested, in trust for them, in fee, and a further and very material consideration was that the latter tract should never
be taxed by the government. The parties were competent thus to contract, as no restriction was imposed on the colonial government, and the consideration was ample for the exemption.
The condition attached to the land; so this Court held:
"The act authorizing the Indians to sell was a mere enabling statute; the purchasers took from and under the Indian tribe, held by virtue of the grant to them, and were, of course, entitled to all the benefits of the contract. New Jersey had, therefore, no more power to repeal that part of the grant which exempted the lands from taxation than she had to repeal the entire contract, and therefore her act of 1804, repealing the clause of exemption, was void."
We think the case in Cranch compared with the one presented by the record, is too dissimilar to require a particular comparison, or further comment.
We concur with the Supreme Court of Ohio that the bill must be dismissed, and so order.