CLAYBROOK v. CITY OF OWENSBORO.
297
swer is to be found in the words of the statute: "upon such terms liS may by them be mutually agreed upon, in accordance with the laws of the adjoining state or territory with whose road or roads connections are thus formed." The conaolidation here was by a sale of the Nebraska road, with all its property and franchises, to the minois corporation, and, if there is to be but one consolidated company, the intention must have been to make the Illinois company that one. unless it violated some law either Was this unlawful? Clearly of Nebraska, Iowa, or Illinois. The statute of Iowa expressly authorizes consolidation by sale. I assume, as nothing appears to the contrary, that no provision of any law of Illinois has been violated. There is nothing in the above-quoted statute of Nebraska to prevent aeonsolidation by the sale of a domestic road to a foreign tion which has built a line of railroad teo the' state bonnditlj". On the contrary, the parties are expressly empowered to fix their own terms of consolidation, subject only to the condition that' they shall not violate any law of the other state or states interested. The true · rule upon this subject is that where the state does not assume,'by its legislation, to create a corporation, or to require a foreign corporation to become domestic, but recognizes the existence of such foreign corporation, and its right to come into the state and transact business therein, such foreign corporation remains a corporation of the state under whose laws it was created, and, for purposes of the jurisdiction of the federal courts, a citizen of that state. M., K. x T: Ry. Co. v. T. et St. L. Ry. Co. 10 FED. REP. 497. . Within this rule r hold that the defendant is an TIlinois corporation. The plea to the jurisdiction is accordingly overruled.
CLAYBROOK and others
11.
CITY
OF
OWENSBORO and others. 1883.)
(Di8t1"i6t Court, D. Kentucky.
An act of a state legislature authorizing a municipal corporation to levy a tax for the benefit of public schools within its limits, but directing that the tax collected of the white people should be used to sustain public schools for white children only, and the tax collected of the colored people should be ueed to sustain schools for colored children, the effect of such discrimination being to give the whites excellent school facilities and a school session annually of nine
298
FEDERAL REPORTER.
mont.hs, and the colored, inferior school facilities and a session of three months, is contrary to the fourteenth amendment of the United States constitlition, and void. The colored race is entitled to have a fair share of the fund raised by snch tax,ation applied to the maintenance of the colored SCllOOJS,
2.
INJUNCTION FROM UNITED l:!TATES COURTS AGAINST UNOONSTITUTIONAL SrATE
LAW.
The federal courts have jurisdiction to enjoin state officers from obeying state laws declared unconstitutional.
Motion for Injunction.
E. W. Bagby and G. S. Mat'shall, for complainants. Owen <t ,and W. N. Sweeney, for defendants. BARR, J. The complainants allege that they are citizens, of the United States and of the state of Kentucky, of African descent, and are residents of the city of Owensboro, and are being deprived by de-" fendants of the equal protection of the law, in that theya,re discriminated agains,t in the distriqution of taxes levied by the city of Owensboro for the public schools of said city, a,nd they ask an injunction against "the' board of trustees of the, Owensboro public schools" and its treasurer, restaining them, from this alleged discrimination in the distribution of these The general assembly of Kentucky has, by separate enactments, one in 1871 and the other in 1880, authorized the mayor and common council of the city of Owensbor,a to assess and levy an ad valorem tax, not exceeding thirty (30) cents on each one hundred (100) dollars' worth of property, in said city, and a }?oll tax not exceeding two doll,ara on each resident of said city over 21 years of age. Tbi;stax, when collected, was, to be applied to sustaining ,thepublicachools of aaid city. The taxeal)ollected of the and white people and on their property are to be useel in sustaining public schools for white children only, and 'the taxes collected of colored people and on their property to be used in sustaining public schools for colored children. The city of Owensboro has, as required by these laws, assessed and levied these taxes-an ad v'llol'em'tax of 30 Mnts on ellah $100 warth of property and two dollars poll tax-separately. and they are being separately applied to the white and colored schools, as required by the state statutes. The state also authorized the city of Owensboro to issue $30,000 of its bonds, and apply the proceeds 'of the sale' thereof to the build,ingbf school">public school-houses iti said city, to be \lsedexclusively by white children. This law provides that only white peoplea,nd property should be taxed to pay these bonds and the acaruing illt0reBt thereon. The city 6f Owensboro has, under authority of this
CLAYllROOK V. CITY OF OWENSBORO.
'299
law, issued $30,000 of its bonds, and applied the to the building of two common school-h,auses, and now uses these sehoulhouses for white children exclusively. In obedience to the provisions of the state statutes, there are two school systems in said city. The public schools for white children are managed by a board of white trustees, elected by the white voters in said city. The public schools for colored children, which are entirely separate, are managed by colored men selected by the common council of the city. It appears from the affidavits that there are about 500 colored children within the school age and about 800 white children within that age in the city. The taxes assessed for last year upon the white people and their property aqlounted to about $9,400, and those assessed upon the colore'd people and their property amounted to about $77(l. The practical result of this discrimination against the colored children in the distribution of the school fund raised by taxation has been to give the white children two excellent school-houses, excellent school faciliti.es, 18 teachers, and a school session of 9 or 10 months in each year. On the othor hand, the colored children have only one inferior school-house, three teachers, school facilities of every kind very inferior to those of the whHe .children, and a school session of about three mOnths in each year. The learned counsel for defendants admits that these laws, and the action of the authorities under them, have and will continue to produce inequality in edncational advantages between the white and the colored children in Owensboro, but insists (1) that this is a lawful inequality; (2) if it is not a lawful one" this court has no' jurisdiction. They insist the taxes assessed and levied under these laws are: not for the purpose of susta.iningcommon schools, but these acts make the white residents and the colored residents of Owensboro two separate corporations, with power and authority to establish public schools for the children of each race,and that the right to tax is merely a mode of assessing the members of the respective corporations as stockholders. This is not a correct eonstruetion of these laws. The first section of the act approved IS71 declares the city of Owensboro shall be a school-district, and the fourteenth section provides that ..all white children over six years of age within each ward shall have equal right of admission to the school8 of such ward, anlt no fees or charges for their -tuition sllall ever he charged in any of the And it is expressly provided that onliwhite children be admitted to said schools."
300
The twenty-first section requires that "the commissioner or com· missioners for common schools shall annually make one estimate of the shares or proportions of the state common-school fund, which would be coming 01' due to the school-districts of Owensboro if the boundaries of the city were taken as the boundary of such districts, and shall annually pay over to the treasurer of the board of trustees herem created the full amount of such proportion or share, which shall be held and used by them as other funds herein provided for." It is quite clear that the act of 1871 and the amendments were intended to and do provide for local aid to the common schools in Owensboro, and with this local aid was given local control, and that it is really a part of the common-school of the state, and, as such, getting its part of the common-school fund of the state. It is equally inaccurate to assert that the white residents of Owensboro are made in any sense stockholders in the corporation established by the act of 1871. All white residents of Owensboro, after this act became a law, were subject to the assessment of taxes by the common council of the city; and this was without regard to their willingness or unwillingness to be taxed. This power of taxation did not rest upon the will of the tax-payer, but continued at the will of the state of Kentucky. The state can tax for the purpose of estab· lishing and sustaining common schools, because that is recognized as a governmental purpose and within the legitimate power of the state. This power was delegated to the city of Owensboro as a municipal cOl'poration,and for convenience a subcorporation. called the "Board of .Trustees of the Owensboro Public Schools" was created, but neither the residents nor the tax-payers in said city are ,in any legal sense stockholders in this co.x:poratiQn., If, theref<,)re, the. power of the state to prescribe the color or race· of the stockholders in a private corporation. which it creates be conceded, the existence of such a power would have no application .tothe case under consideration. The thirt,eentqamendment to the feder.al constitution prohibited shtYery and inVOluntary servitude, except for crjme, and the fifteepth a.mendment prohipits the United States or any state fromdiscrimi· nating citizens as to the ;right to vote on account of race, color, or, . condition of servitude. It.is whether .either pf these amendments havasuy direct bearing .upon the questionunder cOI;lsidera.tion. since the discrimination which is prohibited ,by{ne is only ss to the right to a.nd eduto the enjoyment of free· cational adva.ntages are not
CLAYBROOK V. CITY OF OWENSBORO.
301
dom or citizenship, however necessary they may be to perpetuity of free institutions. These amendments, however, indicate the intention of this nation in regard to those who had been slaves and were of the African race, and, 'when taken with the history of their adoption, aid in arriving at a correct construction of the first section of the fourteenth amendment, which declares: ".All persons born or naturalized in the United States and subject to the jurisdiction thereof are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States, nor shall any state depri ve any person of life, liberty, or property without due of law; nor deny to any person within its jurisdiction the equal prptection of the laws."
This section gives a citizen of the United States or of a state, and even persons who are not citIzens, an additional guaranty of the enjoyment of their fundamental rights. This guaranty is not against individual action or encroachment, but against the state, and its laws and its officers. These rights of the citizen are still to be protected and enforced, as between man and man, by and through state laws and agencies, and not by the United States and its laws. Virginia v. Rives, 100 U. S. 313; U. 8. v.Harris,' 106 U. S. 629'; [S. C. 1 Sup. Ct. Rep. 601;] Le Grandv. U. 8. 12 FED. REP. 577. Heretofore the citizen looked alone to the constitution of his state for R. guarantyof these fundamental rights. That guaranty was then liable to be modified, or, indeed, destroyed by the will of an all-powerful state majority; but now the citizen has the nation's guaranty of these rights, which are fundamental, and "belong Of right to 'citithe aetion of the largest zens of all, free governments,'" even majority in a state. This guaranty has rounded out and perfected our government, and will be a priceless heritage to posterity long after the race in whose behalf it was adopted has ceased to need its ,especial proteetion. Waiving 8111' consideratioh of the question as to the rights of 'complainants as citizens of the United States; we proceed toinqui1'6 whether the act of 1871 and its amendments deny Complainants "the equal protection of the laws" within the meaning of, this section. It may bG argued that the equal protection of the laws does not mean ,the equal benefit of the laws; that proteetion in 'this section does not mea,n benefit; and that the inequality here is oniy iIi' the arising from' the laws. Perhaps the of this distinction, as applied to the laws oJa state, would be."ro iw.-
302
agine the distinction a good one see where it would lead. Thus, if protection only means equal taxation, and not the equal benefita of the taxes when levied and collected for governmental purposes, the state may apply such taxes not only according to color, but also according to the nativity of the citizen. Thus taxes levied and col· lected for police pnrposes, for the administration of justice, for the enforcement of criminal laws,. and, indeed, for any other govern· mental purpose, may be distributed by the color line, or, as between white people, according to their places of birth, in proportion as taxes may be paid by each class. If taxes can be distributed according to color or race classification, no good reason is perceived why a divis. ion might not be made according to the amount paid by each tax· payer, and thus limit the benefits and distribute the protection of the laws by a classification based upon the wealth of the tax-payers. Such distribution of taxes would entil'ely ignore the spirit of our reo publican institutions, and would not be the equal protection of the laws as understood by the people of any of the states of this Union at the time of the adoption .of this amendment. The equal protection of the laws is not possible if the taxes levied and collected for Hovernmental purposes are divided upon any such basis. . The equal protection of the lawiS guarantied by this amendment must and.call only mean that the laws of the states must be equal in their benefit as well as equal in their burdens, and that less would not be "the equal protection of the laws." This does not mean absolute equality ill distributing the benefits of taxa,tion. This is imprac. ticable; but it does mean the distribution of the benefits upon some fair and equal classification or basiB. See Virginia v. Rives, 100 U. S. 313; Ex parte Virginia, Id. ;339; 8trauder v. Wcst Virginia, Id. 303; Neal v. Delaware, 103 U. S. 370; Bertonneau v. Directors, etc., 3 Wood, 177; U. 8. v.Buntin, 10 FED. REP. 730; Cooley, Torts, 289; Ward v. Flood, 48 Cal. 36; Smith v. Directors Ind. School-dist., etc., 40 Iowa, 518; Roberts v. Boston, 5 Cush. 198; State v. McCann, 21 Ohio St. 198; Cory v. Carter, 48 Ind. 362; AhKow v.Nun.an, 5 Sawy. 555; Parrott's Chinese Case, 6 Sawy. 376. The supreme court, in Strattder v. West Virginia, supra. in considering this amendment, uses this language:· "It ord,ains no state shall deprive any parson of life, liberty, orproperty without due process of law, or deny to any person within its' jurisdiction protection of the law. What is this but declaring that' the law in the states shall be tbesame for the black as for the white; that all persons· . whet-her colored or white, shall stand equal before the laws of the states; and
CLAYBROOX V. CI'fY OF ,OWENSBORO.
in regard to the colored race, for whose' protection the amendments were plimarily designed, that no discrimination shall, 1;>e made against them by law because of their c(}lor? The words of the amendment, it is true. are prohibitory, but they contain a necessary implication of a positive immunity or right most valuable to the colored race-the tight to exemption from unfriendly legislation against them distinctively as colored, exemption from legal discriminations, implying inferiority in civilsocietYi lessening the security of their enjoyment of the rights which others enjoy, and discriminations which steps towards reducing them to the condition of a subject race."
In Ward v. Flood, 48 Cal. 51, the suprem.e court of that state, in discussing this school question, says: "The clause of the fourteenth amendment referred to did not create anv new or subfltantive legal right, or add to or enlarge the general of the rights of persons or things 'existing in many stateS under the laws thereof. It,' howevel', operated npon them a,q it found them already established, and it declared in as they were in such state,they should be held and enjoyed alike by all persons within its jurisdictiop..'rhe protection of law is, indeed. inseparable from the assumed existence of a recognized legal right. through the. vindicatiqn of which the prote,ctioids to operate. To dedare, then, that each person within the jUrisdictionol the state shall enjoy the equal protection of its laws"is necessarily to declare that the measure of legal rights within the state shallM equal and uniform; and the same for all persons found therein, ·accordlng to the respective conditions of ea.ch-each child as to all other children, each adult persoIl as to .all,other adult persons." . , ,
The act of 1871 and amendments, in so fat as they oohferthe: benefit of the taxes raised thereunder exclusively upon white children, is within the inhibition of -the first sectioIiof the .fourteenth ,amenament to the constitution 6f the United States,and therefore void. In arriving at this conclusion I have assumed that Kentucky,in stablishing and maintaining a. edmmon.school system, is exercising a governmental function, and that this school system is not a public charity which can be given to: some ll.nd withheld froin' others, but that the state of Kentucky, havitiga right to tax for this purpose because, and only b60ause, it is for a governmental purpose, must give to all of its people the equal benefit and protection oftheaelaws, as well as others. '£he judiciary act of ,March, 1875, gives 'the United States courts jurisdiction concurrently with the state courts of all suits of a civil nature, at common law or equity, when the'matter in dispute exceeds $500, and arises under the constitution or.law8of the United States. See, also, seotion 629,subs. 16, Rev. B t l , r As this case involves a ,controversy, exceeding $500 in va;llie, and arises under ,the constitution of; the United States, thisCQUrt ,haa
304:
jurisdiction, if the suit has been properly brought in equity. The complainants complain of an illegal discrimination against them and others of their race, in virtue and under the authority of an unconstitutional act of the general assembly of Kentucky., They do not seek admission for themselves and others of their race into the schools established for white children exclusively. The trustees of the schools provided for colorAd children residing in Owensboro cannot sue for the share of the colored children in this fund, because the state of Kentucky has given them no such authority. It may be said that each colored child of a school age in the city of Owensboro may sue at law for his or her share of this fund, but this is not true, as they have no undivided share. If I am correct in my conclusion, all that colored children in Owensboro are entitled to is the equal protection of the laws, in that a fair share of this fund be applied toward the maintenance of the common schools especially provided for colored children. In this view the only remedy is in equity. The federal courts are prohibited from enjoining any proceeding in a state court, (section 720, Rev. St.,) but there is no other legislative prohibition against the issuing of the writ of injunction. Circuit and district courts of the United States are expressly given power to issue all writs which may be necessary for the exercise of their jurisdiction, and agreeable to usages and principles of law. Section 716, Rev. St. This court should always be most careful in exercising its jurisdiction, if thereby it interfere's with the action of those claiming to act under the authority of a state law. But if the jurisdicti?n be undoubted, and justice and the rights of parties demand such an exercise, it must be done in obedience to the supreme law. United States courts have heretofore enjoined state officers from obeying state laws which were declared to be unconstitutional. Thus, in Osborn v. Bank of U. S. 9 Wheat. 738, the supreme court approved of an order of injunction against state officers acting under a state statute which was declared to be unconstitutional. In Davis v. Grall, 16 Wall. 205, the same court sustained an injunction suit against the governor and land commissioner of Texas. In Board of Liquidation v. McComb, 92 U. S. 532, the board of liquidation was enjoined from funding certain bonds into the kind held by complainants, because it was injurious to his interest and in violation of a contract which the state of Louisiana had made with certain of her bondholders. See, also, U. S. v. Lee, 106 U. S. 196; [So C. 1 Sup. Ct. Rep. 240;J
BEACH
V. MOSGROVE.
805
FTmcork v. Walsh, 3 Wood, 851; Bertonneau v. Board of Directors City Schools, Id.177; Evansville Nat. Bank v. Britton, 8 FED. REP.
867. The complainant court.
have an injunction until further order of the
BEAOH and otllers v.
MOSGROVE
and others.
(Circuit Oourt, D. Nebraska. 1.
May, 1883.)
SUIT TO t)ANCEL MORTGAGE-HOLDERS OF' NOTES NECESSARY PARTIES.
Where a suit is brought to cancel a mortgage on the grounq. that the mortgage has been paid, and such debt is represented bynegotfable notes made payable jointly to certain parties, all the holders of such notes, whether named in the granting clause of the mortgage or not, are necessary parties to the suit, and a decree is void for want of jurisdiction as to a payee of such notes who is not m.ade a party to the bill. 2. SAME-SERVICg BY PUBLICATION-DECREE.
In such an action, where service is made by publication as provided by the act of March 3, 1875, § 8, and there is no appearance op the par.t of the defendants, and the notes are not within the district, a decree canceling t·he mortgage is void as to the notes for want of jurisdiction, and as to the mortgage ill erroneous, because rendered without proof; as, in cases where the service is by publication only, a failure to deny the allegations of the bill is not a admission of those allegations to authorize a decree in accoldance therewith. 3 SAME-BILL OF' REVIEw-TIME AI,LOWED FOIl FILING.
Where a decree has been entered against absent defendants on service by publication, such decree is not final until the expiration of one year, anrl the time within which a bill of review for errors apparent on the face of the record may be filed by such defendants should be computed from the time when the decree becomes final.
On Demurrer to Bill of Review. This is a bill filed to review and modify the decree rendered by this court in the case of Cornelia, O. Harrington v. John B. Finley et al. The original bill was brought for the double purpose of removing from the title to certain lands a cloud thereon caused by certain tax deeds, and of canceling a certain mortgage thereon alleged to have been paid in full. The present complainants were interested in the mortgage. Their true are William M. Beach, John N. Beach, and James T. Black. Among the defendants in the original suit"are found the names of James T. Black, W. M. Black, and John T. Beach, but not that of W. M. Beach or John N. Beach. The mortgage appears to have been executed to James T. Black, but to secure v.16,no.3-20