Murray v. Wilson Distilling Co.

164 F. 1, 92 C.C.A. 1, 1908 U.S. App. LEXIS 4608
CourtCourt of Appeals for the Fourth Circuit
DecidedSeptember 15, 1908
DocketNo. 821
StatusPublished
Cited by18 cases

This text of 164 F. 1 (Murray v. Wilson Distilling Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Murray v. Wilson Distilling Co., 164 F. 1, 92 C.C.A. 1, 1908 U.S. App. LEXIS 4608 (4th Cir. 1908).

Opinion

BOYD, District Judge

(after stating the facts as above). When we have cleared away the immaterial matter and have divested this controversy of all save that which relates to the substance of it, there remains to be considered two main propositions. The first is jurisdictional, and presents the question whether this action is against the state of South Carolina, and, therefore, forbidden by the eleventh amendment to the Constitution of the Linked States; the second, whether the Dispensary Commission, against the several members of which this suit is brought, is a court of the state of South Carolina and, therefore, incapable of having its proceedings stayed by writ of injunction granted by a court of the United States. Section 720, Rev. St. (U. S. Comp. St. 1901, p. 581). To these two may be added another, which relates particularly to the bill and the testimony offered by the complainant in support; the appellants having set up, as a part of their answer, that the bill and the testimony are insufficient to authorize an injunction and the appointment of receivers pendente lite. The principles involved in the first proposition, however, are paramount; and following closely, as affecting the right of the complainant to maintain this action and the jurisdiction of the court to entertain it, is the second proposition.

Is this a suit against the state of South Carolina, or is the purpose •of the action and the disposition sought to be made of the subject-matter of such nature as to render the state an indispensable party? In other words, does the state hold the money which the complainant [16]*16undertakes to subject to the payment of his debt in its sovereign ca~ pacity, as a part of its public fund for its use in supporting and carrying on the state government ? Undoubtedly the eleventh amendment was intended to prevent a federal court, in suits prosecuted by citizens of another state or citizens or subjects of a foreign state, from interfering with a state in the preservation of its autonomy, in maintaining its own system of self-government, so long as such system is in harmony with the Constitution of the United States. To this end, therefore, the funds of the state, in its treasury, or held by its officers or agents, for use in the administration of the governmental affairs of the state, are not to be affected by the process of a federal court; nor can such court entertain jurisdiction of an action which has for its purpose the invasion of the right of the state to manage and control its internal affairs, or of an action which will obstruct the state authority or impair the state instrumentalities in the discharge of legitimate functions in the maintenance of the state’s integrity. To be more concise, the constitutional inhibition is to the effect that the courts of the United States cannot entertain jurisdiction in an action at the instance of a citizen, which seeks to recover as against the state the property belonging to the state, or the purpose of which is, and the result of which would be, to disturb the legal and orderly administration of the state’s internal governmental affairs by its duly appointed officers and agents.

Does this case come within the limits prescribed ? In this connection it becomes necessary to inquire if the state has any present interest in the fund in controversy, which can be divested by a judicial determination of the true amount, if any, justly due the complainant. Or has the state by an act of the Legislature relinquished all right, if any existed, to enough of the fund to pay all the just debts contracted by the dispensary authorities? If so, can the ascertainment of the true amount of these debts and the application of the funds in the hands of the commissioners in payment affect the right of the state, or in any way interfere with the authority of the state, to manage and control its internal government within the bounds of its legitimate autonomy ?

The first proposition presented to us rests largely upon the conl-struction to be given to the act of the South Carolina Legislature, approved February 16, 1907. Sess. Laws 1907, p. 835. This act provides that:

“The Governor shall appoint a commission of well-known business men of five members, * * * to be known as the State Dispensary Commission.”
“Said commission shall immediately organize by the election of a chairman and a secretary from their number.”
“It shall be the duty of said commission to close out the entire business and property of the State Dispensary, except real estate, including stock in the several county dispensaries, by disposing of all goods and property connected therewith, by collecting all debts due and by paying from the proceeds thereof all just liabilities at the earliest date practicable.”

By section 47 of another act passed by the South Carolina Legislature on the 16th of February, 1907 (Sess. Laws 1907> p. 480), the [17]*17dispensary as a state institution was abolished; the enactment to that end being as follows:

“The State Dispensary is hereby abolished and all acts or parts of acts inconsistent with this act are hereby repealed.”

Then came the other act of February 16, 1907, creating the commission and from which we have quoted above. This act bears the title:

“An act to provide for the disposition of all property connected with the State Dispensary and to wind up its affairs.”

Thus we see that the state determined to go out of the business of dealing in liquors, and through its Legislature repealed the law under which it had operated, and by another act assigned all of the property, estate, and effects belonging to or connected with the dispensary to the Dispensary Commission, to be reduced to cash and from the proceeds first to pay all just liabilities. From this source the fund now in the hands of the commission arose. The state, through its Legislature, has passed both the title and possession of the fund involved to the commission for the purposes designated in the act, the first of which is to pay all outstanding just liabilities which had been incurred by the State Dispensary in the course of its operations. The fund being in the hands of the commission charged with this duty, the state has no interest in so much thereof gs is necessary to pay the just debts. Then how can it infringe any right of the state to have the true amount of the debts due by the defunct dispensary judicially ascertained ?

In Bank of United States v. Planters’ Bank of Georgia, 9 Wheat. 904, 6 L. Ed. 244, which was a suit brought in the Circuit Court of the United States, the question of jurisdiction, in view of the eleventh amendment to the Constitution, is discussed. The action was founded on promissory notes payable to a person named therein, and were duly transferred, assigned, and delivered to the plaintiff. A plea was entered by the defendant to the jurisdiction of the court on the ground that it was a corporation in which the state of Georgia, and certain individuals, who were citizens of the same state, were stockholders, and the point made by the defendant was that, the state of Georgia being a stockholder, the action was forbidden by the eleventh amendment. In delivering the opinion Chief Justice Marshall uses this language:

“This suit is not to be sustained because the Planters’ Bank is suable in the federal courts, but because the plaintiff has a right to sue any defendant in that court who is not withdrawn from its jurisdiction by the Constitution or by law.

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Bluebook (online)
164 F. 1, 92 C.C.A. 1, 1908 U.S. App. LEXIS 4608, Counsel Stack Legal Research, https://law.counselstack.com/opinion/murray-v-wilson-distilling-co-ca4-1908.