S. Elec. Co. v. Stoddard, 269 U.S. 186 (1925)
Case details
Bluebook Citation
S. Elec. Co. v. Stoddard, 269 U.S. 186 (1925)
Full caption
SOUTHERN ELECTRIC COMPANY v. STODDARD, SUPERINTENDENT.
Country
United States
Jurisdiction
Federal
Court
Supreme Court of the United States
Decided
Nov. 23, 1925
SOUTHERN ELECTRIC COMPANY v. STODDARD, SUPERINTENDENT.1
ERROR TO THE SUPREME COURT OF THE STATE OF NEW YORK.
No. 42. Submitted October 14, 1925.—Decided November 23, 1925. In proceedings brought by the New York Superintendent of Insurance to liquidate the business of a New York insurance company, the claim of a creditor who had recovered judgment against the company in a federal court in another State, to payment out of existing assets, was disallowed by the Supreme Court of New York, Special Term, upon the ground that, under the New York insurance law, the claim, having arisen after the date when the property was taken over for liquidation, must be postponed to claims previously arisen. The order of disallowance was affirmed by the Appellate Division. The creditor throughout the proceedings invoked the full faith and credit clause, the contract clause, and the Fourtenth Amendment of the Federal Constitution. Held, in view of an interpretation by the New York Court of Appeals—1. That the order of the Appellate Division was an order entered upon a decision which finally determined an action or special proceeding within § 588, paragraph 1, of the New York Civil Practice Act, and, under that paragraph, because of the constitutional questions involved, was appealable as of right to the Court of Appeals. P. 188.
2. Therefore, under § 237, Judicial Code, as amended September 6, 1916, the claimant not having applied to the Court of Appeals, a writ of error from this Court to the Appellate Division would not lie. Id.
Writ of Error to 207 App. Div. (N. Y.) 842, 893, dismissed.
Error to a judgment of the Supreme Court of New York, Appellate Division, which affirmed an order of the Special Term disallowing a judgment creditor’s claim against an insurance company, in liquidation proceedings.
Messrs. Arthur F. Gotthold, Thomas M. Fields, Frank J. Hogan and Walter W. Gross were on the brief, for plaintiff in error.
1
James A. Beha, Superintendent of Insurance, was substituted as defendant in error in this Court.
Messrs. Clarence C. Fowler, James A. Beha and Alfred C. Bennett were on the brief, for defendant in error.
Mr . Chief Justi ce Taft delivered the opinion of the Court.
Unkefer & Co., a Delaware corporation, on October 1, 1915, entered into a contract with the United States to erect a post office and court house building in Charlotte, North Carolina, and furnished a bond in accordance with the Act of February 24, 1905, c. 778, 33 St. 811. There were two sureties upon the bond, the Casualty Company of America, of New York, and the Southwestern Insurance Company, of Oklahoma, the former being liable under the terms of the bond for $50,000, and the latter for $46,000. Unkefer & Co. made various contracts for supplies and materials, including a contract with the Southern Electric Company for $201.23. The supplies were used in the post office building and were delivered before the middle of June, 1917. Unkefer & Co. became insolvent at that time and ceased work. Under the provisions of the bond, the Casualty Company became liable for 52 per cent, of the claim. Suit was brought by the Southern Electric Company against the Casualty Company in the United States District Court for the Western District of North Carolina, and a judgment in the sum of $105.50 was recovered August 4, 1921.
Meantime by order of the Supreme Court of the State of New York, dated May 4, 1917, the Superintendent of Insurance of that State took possession of the property of the Casualty Company of America and proceeded to liquidate its business in accordance with the statutes under which it was organized, and as liquidator made a report of the claims against the company to the Supreme Court of New York. A duly authenticated record of the judgment in favor of the Southern Electric Co. in the United States court for the Western District of North Carolina was. filed as a claim with the liquidator against p. 188the Casualty Company. He reported that it could not be allowed because it did not arise until after the date when the property of the Casualty Company had been taken over for liquidation and must therefore be classed under the New York statute as a contingent claim not to be paid out of the existing assets—until after the claims which had arisen before liquidation had been paid. An order of reference to consider the objections to the report of the liquidator was made in the Supreme Court, and they were sent to a referee to be heard. He sustained the report of the liquidator. The disallowance was approved by the Supreme Court and on appeal was taken to the Appellate Division, which affirmed the order of the special term. The claimant then moved for leave to appeal to the Court of Appeals, and that motion was denied by the Appellate Division. It is from the order of the Appellate Division affirming the report of the Superintendent of Insurance disallowing the claim that this writ of error is taken.
Both before the referee in the Supreme Court and the Appellate Division the claimant maintained that the refusal to allow the claim based on the judgment of the Western District of North Carolina was a denial of full faith and credit, in violation of Article IV, § 1 of the Federal Constitution; that § 63 of the insurance law of the State of New York, by which all the assets of the Insurance Company were appropriated to pay claims earlier than the North Carolina judgment here sought to be enforced, was in violation of the Fourteenth Amendment in requiring a classification so unreasonable as to take claimant’s property without due process of law, and that the New York statute impaired the obligation of a contract, in violation of Article I, § 10, clause 1, of the Constitution.
A motion is made to dismiss this writ of error on the ground that it has not issued to the court of last resort p. 189186 ^Opinion of the Court.
of the State of New York as required by § 237 of the Judicial Code, as amended by Act of September 6, 1916, 39 St. 726, c. 448. By the first paragraph of § 588 of the Civil Practice Act of New York, an appeal to the Court of Appeals may be taken as of right from a judgment or order entered upon the decision of the Appellate Division which finally determines an action or special proceeding where is directly involved the construction of the Constitution of the State or of the United States. In this case there is directly involved the construction of the Constitution of the United States, and therefore it would seem that an appeal could have been taken from the Appellate Division as of right to the Court of Appeals, but this was not done. Instead, application was made to the Appellate Division to certify that a question of law was involved in the case which ought to be reviewed by the Court of Appeals, and that certificate the Appellate Division declined. Thereafter no application was made to the Court of Appeals to allow an appeal. Paragraph 4 of § 588 provides that an appeal may be taken to the Court of Appeals from a judgment or order entered upon the decision of the Appellate Division which finally determines an action or special proceeding, but which is not appealable as of right under sub-division 1 of the section, where the Appellate Division shall certify that in its opinion a question of law is involved which ought to be reviewed by the Court of Appeals, or where in case of the refusal so to certify an appeal is allowed by the Court of Appeals.
It is said that this order of disallowance could not have been appealed to the Court of Appeals, either under the first or fourth paragraph of § 588, because it is not an order entered upon the decision of the Appellate Division which finally determines an action or special proceeding, and that this was so held in the case of The People v. American Trust Company, 150 N. Y. 117. We find, however,
Syllabus. , 269 U.S.
that on December 12, 1922, in the matter of a claim of one Badgley, in this same proceeding for the liquidation of the Casualty Company of America, the Court of Appeals (234 N. Y. 503) entertained an appeal from the Appellate Division of the first judicial department, which had reversed an order of the special term allowing the claim of the appellant therein and dismissed the claim. This was not by permission of the Appellate Division and must therefore have been found by the Court of Appeals to be within the 4th paragraph of § 588, an order upon a decision of the Appellate Division “ finally determining an action or special proceeding.” This clearly shows that in the view of the Court of Appeals of New York if the order of disallowance in this case involved a federal constitutional question as it did on this record, it was directly appealable to that court from the Appellate Division under the first paragraph of § 588. The claimant has failed to make proper application to the state court of final resort and for that reason the writ must be dismissed.
Motion granted.
CENTRAL UNION TELEPHONE CO. v. CITY OF EDWARDSVILLE.
ERROR TO THE SUPREME COURT OF THE STATE OF ILLINOIS. No. 37. Argued October 13, 1925.—Decided November 23, 1925.
1
A system of state appellate practice (as in Illinois) which allows review of constitutional questions, with any others involved in the case, by direct appeal to the Supreme Court of the State, but provides that if the appeal be taken to an intermediate court, empowered to review non-constitutional questions, the constitutional questions shall be waived, is reasonable and valid as applied to a suitor -who lost his opportunity to have his claim under the Federal Constitution reviewed, in the state court or here, by appealing to the intermediate court. P. 194.
2
An Illinois statute providing that " cases ... in which the validity of a statute or construction of the Constitution is in80048°—26----- 13
volved” shall be taken directly to the Supreme Court of the State, was construed by that court as including cases involving the federal as well as those involving the state constitution, with the result that a party asserting a federal right was adjudged by that court to have waived it by appealing in the first instance to the intermediate appellate court. Held that a writ of error from this court to the state Supreme Court must be dismissed, since the construction, even though not anticipated by any earlier decision, was not an unfair or unreasonable one amounting in its application to an obstruction of the federal right, and therefore this court was bound by it. P. 195. . Writ of error to review 309 Ill. 482, dismissed.
Error to review a judgment of the Supreme Court of Illinois, affirming a judgment of the Illinois Appellate Court, which sustained a recovery by the City in an action against the Telephone Company to collect taxes levied on its poles in the city streets. See also 302 Ill. 362; 227 Ill. App. 424.
Mr. William Dean Bangs, with whom Mr. James Dwight Dickerson was on the brief, for plaintiff in error.
This Court is not bound by the determination of a state court that a federal constitutional question has been waived. Davis v. Wechsler, 263 U. S. 22; American Ry. Express v. Levee, 263 U. S. 19; Prudential Ins. Co. v. Cheek, 259 U. S. 530; Union Pacific Ry. v. Public Service Commission, 248 U. S. 67; Truax v. Corrigan, 257 U. S. 312, 324; Davis n . O’Hara, 266 U. S. 314; Aetna Life Insurance Co. v. Dunken, 266 U. S. 389.
Where there is a plain assertion of a federal constitutional right in a lower court, local rules as to how far it will be reviewed on appeal do not prevail. Love v. Griffith, 266 U. S. 32; Davis v. Wechsler, supra; Ward v. Love County, 253 U. S. 17, 22. The jurisdiction of this Court is determined by § 237 Judicial Code as amended. Harrison n . St. L. & S. F. R. R., 232 U. S. 318, 328. The federal constitutional right was “ drawn in ques-
Opinion of the Court. 269U.S.
tion ” within the meaning of this section. Spies v. Illinois, 123 U. S. 131; Leigh v. Green, 193 U. S. 79; Grannis v. Ordean, 234 U. S. 385. An ordinance is a “statute” within the meaning of this section.
Waiver implies intentional relinquishment of a right. Perrin v. Parker, 126 Ill. 201; Star Brewery Co. n . Primos, 163 Ill. 652. The constant assertion of the federal right can not have the effect of a waiver. Atlantic Coast Line v. Burnette, 239 U. S. 199; Davis n . Wechsler, supra.
Messrs. Mark Lester Geers, George Allen Lytle and John Frederick Eeck were on the brief, for defendant in error.
Mr . Chief Just ice Taft delivered the opinion of the Court.
The City of Edwardsville, in July 1882, by ordinance granted to the Central Union Telephone Company a right in its streets to erect and maintain the necessary poles and wires for the operation of a telephone system. The Central Telephone Company transferred its rights to the Central Union Telephone Company. Later the city council adopted a resolution requesting the Central Union Telephone Company to furnish to the city, free of charge, one telephone and such additional telephones as the city council might call for at a reduction of 25 per cent, from the regular rates, and the right to attach, without charge, fire and police alarm wires to the top cross-arm of each pole. The company filed its acceptance of this resolution as provided in the resolution. It maintains 1000 poles in the City of Edwardsville. The city in 1914 passed an ordinance which in effect imposes a tax of 50 cents a pole upon every person, firm or corporation owning, controlling or occupying any such poles in the streets of Edwardsville. , The city brought p. 193suit for the amount due under the tax law at 50 cents a pole. A jury was waived, and after a hearing the court entered judgment for $3,000 against the company. The Circuit Court held that neither the ordinance by which the Central Telephone Company was permitted to occupy the streets, nor the subsequent resolution ac• cepted by the Central Union Telephone Company, constituted a contract, and that the tax law was not therefore a violation of the Constitution of the United States in impairing a contract, or in depriving the company of property without due process of law. Upon this record an appeal was taken to the Appellate Court of the State for the Fourth Circuit. That court transferred the case to the Supreme Court of Illinois, on the ground that the’ Appellate Court had no jurisdiction of it. City of Edwardsville v. Central Union Telephone Co., 302 Ill. 362. The Supreme Court held that as the appeal had been taken to the Appellate Court and errors assigned which that court had jurisdiction to hear, the case was improperly transferred to the Supreme Court, and remanded it to the Appellate Court, which gave judgment affirming the Circuit Court. The plaintiff then obtained a certiorari from the Supreme Court to review the decision of the Appellate Court, and in that hearing the Supreme Court declined to hear the constitutional questions on the ground that they had been waived by the failure to carry the case from the Circuit Court directly to the Supreme Court to review those questions.
Paragraph 89, § 88, 3d Starr & Curtiss, Annotated Illinois Statutes, p. 3114, reads as follows:
“ Par. 89. Appeal from trial court to appellate court—From trial court to supreme court. § 88. Appeals from and writs of error to circuit courts, the superior court, of Cook county, the criminal court of Cook county, county courts and city courts in all criminal cases, below the grade of felony, shall be taken directly to the appellate p. 194court, and in all criminal cases above the grade of misdemeanors, and cases in which a franchise or freehold or the validity of a statute or construction of the Constitution is involved ; and in all cases relating to revenue, or in which the State is interested as a party or otherwise, shall be taken directly to the supreme court.”
The construction of this statute has been uniformly • held to be, that where a question involves the Constitution, it must be taken on error or appeal to the Supreme Court, and that if it be taken to the Appellate Court on other grounds, the party taking the appeal or suing out the writ of error shall be held to have waived the constitutional questions. Indiana Millers Ins. Co. v. People, T70 Ill. 474; Robson v. Doyle, 191 Ill. 566; Case v. Sullivan, 222 Ill. 56; Poe v. Ulrey, 233 Ill. 56; Haas Co. v. Amusement Co., 236 Ill. 452; Scott v. Artman, 237 Ill. 394; Comm’rs v. Shockey, 238 Ill. 237. The city, therefore, moves to dismiss the writ of error.
It is objected on behalf of the plaintiff in error that the words “ validity of a statute or construction of the Constitution ” refer to the constitution of Illinois and not to the Federal Constitution. The Supreme Court of Illinois has held otherwise in this case. 309 Ill. 482, 483, 484.
But counsel for plaintiff in error insist that it is for this Court to determine finally whether a litigant in a state court has waived his federal right, citing Davis v. O’Hara, 266 U. S. 314; Davis v. Wechsler, 263 U. S. 22; American Railway Co. v. Levee, 263 U. S. 19; Truax v. Comgan, 257 U. S. 312‘ 324; Union Pacific Railway Company v. Public Service Commission, 248 U. S. 67. But there is nothing in these cases which justifies this Court in ignoring or setting aside a required form of practice under the appellate statutes of the State by which federal constitutional rights, as well as state constitutional rights, may be asserted in the Supreme Court of the State or be held to be waived, if the practice gives to the litigant a p. 195reasonable opportunity to have the issue as to the claimed right heard and determined by that court. We said in John v. Paullin, 231 U. S. 583, 585: “Without any doubt it rests with each State to prescribe the jurisdiction of its appellate courts, the mode and time of invoking that jurisdiction, and the rules of practice to be applied in its exercise; and the state law and practice in this regard are no less applicable when Federal rights are in controversy than when the case turns entirely upon questions of local or general law,”—and many cases are there cited.
It seems to us that the practice under the statute of Illinois above quoted is entirely fair. If the litigant has a constitutional question, federal or state, he may take the case directly to the Supreme Court and have that question decided, together with all the other questions in the case, and then, if the federal constitutional question is decided against him, he may bring it here by writ of error or application for certiorari. If he elects to take his case to the Appellate Court, he may have the non-constitutional questions considered and decided, but he gives up the right to raise constitutional objections in any court. There is some complaint that counsel could not infer that the constitutional questions referred to in the statute were federal questions, because the Supreme Court of Illinois had not so decided before this case. We have not been able to determine from the Illinois decisions cited above whether any of the constitutional questions held to be waived therein were federal until the present case. It is not, however, a forced or strained interpretation to hold that “cases ... in which the validity of a statute or construction of the Constitution is involved ” include validity under, or construction of, both constitutions. When so declared by the state court it should bind us unless so unfair or unreasonable in its application to those asserting a federal right as to obstruct it. This is no such case.
The case of Prudential Insurance Co. n . Cheek, 259 U. S. 530, is relied upon to sustain the writ in this case. In that case there was a trial by jury, resulting in a verdict in favor of the plaintiff. The defendant reserved its constitutional points and appealed from the resulting judgment to the state Supreme Court, which refused to take jurisdiction, on the ground that all constitutional questions had been decided by it on a former appeal, and because the verdict, being only for $1,500, was less than the jurisdictional amount required by the statute, transferred the cause to the St. Louis Court of Appeals for final disposition. The St. Louis Court of Appeals, in conformity to the former opinion of the Supreme Court on the constitutional questions, affirmed the judgment, and refused the application for certification of the case to the Supreme Court. A writ of error from this Court to the St. Louis Court of Appeals followed, and a motion to dismiss the writ was made on the ground that the judgment of the Court of Appeals was not that of the highest court of the State in which a decision in the suit could be had. The motion was denied and the case considered on its merits. There is nothing in that case which conflicts with granting the motion to dismiss in this. The plaintiff in error had exhausted every means to test the question in the Supreme Court of Missouri, and had lost; and on the second hearing a writ of error properly lay to the highest court to which the case could be taken, which was the intermediate court. Here, the law of the State under the statute, as many times construed, required the appeal on constitutional grounds to be taken directly from the Circuit Court to the Supreme Court of Illinois. It elected, instead, to go to the Appellate Court, with the consequences well understood, and thereby it waived the question which it now wishes to present here.
The motion to dismiss the writ of error is granted.