WORLD'S COLUMBIAN EXPOSITION et al. v. UNITED STATES, 56 F. 654

FULLER, Circuit Justice, (after stating the facts.) Appellees have submitted a motion to dismiss the appeal upon the ground that the jurisdiction of the circuit court was in issue; that the case involved the construction or application of the constitution.-of the-United States, and that the constitutionality of laws of the United' States was drawn in question therein; that, therefore, the appeal from a final decree would lie to the supreme court of the United States, and not to this court; and hence that this appeal, which is from an interlocutory order, cannot be maintained under the seventh

section of the judiciary act of March 8,1891. We do not understand that the power of the circuit court to hear and. determine the cause was denied, but that appellants contended that the United States had not, by their bill, made a case properly cognizable in a court of equity. The objection was the want of equity, and not the want of power. The jurisdiction of the circuit court was therefore not in issue within the intent and meaning of the act.

So far as.the construction or application.of the constitution of the United Stales and ihe constitutionality of the laws of the United States are concerned, we are of opinion that the case involved, or there was drawn in question, neither ihe one nor the other in the sense that the action of the circuit court was invoked (o dispose of, or proceeded upon the disposition of, a contention raised as to either.

The ground of Hie decision had no reference to the eon-, struction or application of the 'constitution, or the validity of the acts of congress in respect of that instrument, and the conclusions upon which the order was entered were unaffected by considerations of that character.

Gases in which Ihe construction or application of the constitution is involved, or the constitutionality of any law of the United Btaies is drawn in question, are cases which present an issue upon such construction or application or constitutionality, the decision of which is controlling; otherwise every case arising under the laws of ihe United States might he said to involve the construction or application of the constitution, or the validity of such laws.

The jurisdiction of this court to review' the order cannot he defeated at the instance of appellees because the constitutionality of the acts upon which they rely might have been challenged bv their adversaries. Railroad Co. v. Amato, 144 U. S. 465, 472, 12 Sup. Ct. Rep. 740; Snow v. U. S., 118 U. S. 346, 352, 6 Sup. Ct. Rep. 1059. The motion to dismiss is overruled. The question io be determined is whether, upon this record, a preliminary injunction should have been granted.

The bill avers that the defendants are usurping an unlawful authority oven the exposition and grounds, and in virtue ihereof are assuming to open the gates on Sunday in contravention of the acts of congress, and notwithstanding such opening would be "of great injury and a grievous prejudice to the common public good and to the welfare of the people of the United Hi ates.” It is not charged that any property interests of the complainants will be affected by the threatened action, nor is (here any allega!,ion of irreparable injury or probable loss by reason thereof.

The office and jurisdiction of a court of equity, unless enlarged by express statute, are limited to the protection of rights of prox>erty. The court is conversant only with questions of property and (he maintenance of: civil rights, and exercises no jurisdiction in matters merely political, illegal, criminal, or immoral, In re Sawyer, 124 U. S. 200, 8 Sup. Ct. Rep. 482; Cope v. Association, 99 Ill. 489; Sparhawk v. Railway Co., 54 Pa. St. 401; High, Inj. § 20.

But it is said that the interposition of the court may be rested upon the protection of the United States in their possession, use, and regulation of Ihe grounds for the purposes of the exposition, upon Ihe doctrine of chan table trusts, and upon the principles applicable to the restraint of negative covenants. 1. It is true that undertakings upon sufficient consideration not to do a given thing nmy, on occasion, he enforced by restraint of their violation; and where the covenant is express the element of ascertainable pecuniary' damage or injury to the covenantee is not regarded as of essential importance.

Coal Co. v. Schmisseur, 135 Ill. 371, 25 N. E. Rep. 795; Kirkpatrick v. Peshine, 24 N. J. Eq. 206; People v. Diodrich, 141 Ill. 665, 30 N. E. Rep. 1038; Leech v. Schweder, 9 Ch. App. 465. But the application of this principle would require us to treat the transaction in respect of the appropriation of 1892 as purely matter of contract and of express covenant, and, moreover, in spite of its personal character, to hold that equity would specifically enforce, although compensation at law might furnish a full and satisfactory remedy. We cannot concur in this view.

The furnishing of the five million souvenir coins was conditioned upon the defendant corporation providing and expending, in addition to the ten millions it had already contributed, the further sum of two and a half million dollars, and giving to the government a satisfactory guaranty that it would provide all additional sums necessary for completing the entire construction work prior to May 1, 1893, and was subject to .two conditions subsequent, namely, the payment by the corporation of all the expenses, costs, and charges of the great departments of the exposition, and the closing of the exposition on Sunday.

The corporation fulfilled the conditions precedent, provided and expended six million dollars, making sixteen millions, (not including the appropriation,) and completed the work. It is not argued that the opening of the exposition on Sunday would in itself inflict any pecuniary injury whatever, but, assuming such a breach of condition as entitled complainants to reclaim the money, the inadequacy of the remedy at law is nowhere made to appear.

If the whole number of coins had been delivered prior to March 3, 1893, and the corporation had then opened the gates, but had tendered and brought them, or the proper amount, into court, a decree directing the gates to be closed on Sunday by way of specific performance could not be sustained; and, álthough such tender were not made, yet, if recovery could be had at law, and the judgment collected, that remedy would be adequate. Inability so to recover and collect is not asserted, nor any impediment surmountable only in equity suggested.

The bill is not framed in the alternative, nor does it charge, nor is there anything in the evidence to indicate, that the corporation is insolvent. Whatever view may be taken of the provision that, if the appropriation be accepted on the condition, the commission shall make rules or modify the corporation’s rules so as to require the closing of the exposition on Sunday, and of what was done and undone, or attempted to be undone, thereunder, the result is the same, and redress must be sought in the appropriate forum. .

On this branch of the case it may be remarked that appellants insist that the government has wrongfully withheld one million, one hundred and forty-one thousand, seven hundred and sixty of the souvenir coins, and therefore does not come with clean hands, is itself in default, and has no standing in a court of equity to compel specific performance. Upon accepting the act of August 5, 1892, the corporation raised five million dollars on the pledge of its net gate receipts and the agreement that it would create no debt or obligation in excess of that sum.

By the act of March 3, 1893, five hundred and seventy thousand, eight hundred and eighty dollars were appropriated to pay the costs and expenses of the jury of awards, and it was provided that this sum should be charged against the corporation, and should be n\allied out of tlie souvenir coins, until the corporation furnished security for the repayment of the amount to the United States. Differing views are expressed as to the proper construction of this act, but the security required has not been given, and souvenir coins to the number named have been and are withheld.

The corporation contends that it was not and is not liable to pay the expenses of the ;jury of awards, and that the withholding of the coins is unjustifiable; that, moreover, the new' obliga tions it incurred on the strength of the delivery of the souvenir coins, and the vast additional expenditure to winch it was put, render the position of the government wholly inequitable; that it should not have been required to give the security, and cannot give it, because of the terms of the five million loan; that it was discharged, under the circumstances, from compliance with the condition in question; and that, at all events, the government can only demand the return of so much of the appropriation as the corporation has received in preference to the original ten million, but in subordination to the rights of (die bondholders; and this it claims it has offered to do, not by way of tender, but of doing equity.

On the other hand, it is argued that the act of March, 3, 1893, was not a breach of contract on tire part of the United Btates; that the corporation was liable for the expenses of the awards and flie withholding of the coins until security was given was justifiable; that, if the proper construction of the act. is that upon refusal to give the security the coins were released, mandamus would lie to compel their delivery; that, if the corporation became subjected to additional burdens under the act of August, 5,1892, so that the act of March 3, 1893, operated to impair the obligation of the contract created by the former act, it would be invalid and the United States could not be held as in default by reason of an unlawful refusal by their officers to deliver the coins.

And it is insisted that the acceptance of souvenir coins after the act of March 3, 1893, was passed estopped the corporation from questioning its validity and the continued existence and binding obligation of the contract.

But the corporation replies that, treated as a contract, no equitable estoppel could arise upon the ambiguous language in which the act was couched until it was finally informed of the official construction and (he conclusion thereupon to withhold the coins if the corporation refused to give the security; and that, in any view, the complainants, having-brought about the embarrassments under which the corporation labored, were in no position to set up the alleged estoppel.

We advert to these circumstances as illustrative of the difficulties attendant upon an attempt to rest flie case on the rule often applied to negative covenants, hut we do not deem it necessary to express any opinion in disposal of the questions thus raised, as the settled criterion for interference by injunction to prevent the violation of contracts is the inadequacy of the legal remedy, and, tested by thac criterion, we regard the rule invoked as inapplicable. 2.

Xor can we concur in the proposition that the appropriation of the 82,500,000 amounted to a charitable trust upon certain conditions, disregard of which, would constitute a diversion warranting the intervention. of a court of equity. The appropriation was made in terms for the purpose of aiding in defraying the cost of the completion of the work, and to be paid over on vouchers for labor done, material furnished, and-services performed in the prosecution of that work.

It was an appropriation for the benefit of the local corporation, to help it out of financial difficulty, and to enable it to complete its undertaking, and, as such, does not fall within the accepted

definitions of charitable gifts for the benefit of an indefinite class of persons, and considered as public, and not private, benefactions. Indeed, the purpose for which the appropriation was specifically made had to be accomplished before the money could be paid over. Payments were to be made on estimates and vouchers properly certified, satisfactory evidence of the expenditure of ten million dollars, and a guaranty that all additional sums necessary to complete the work would be furnished.

The government thus required absolute assurance not only that its money should go into the construction, but should not be wasted by failure to complete. Undoubtedly in aiding the corporation, a great public enterprise was aided; but that result was reached through the corporation for whose relief the money was exclusively bestowed, and into whose assets it passed for the ultimate benefit of its stockholders or creditors, as the case might be.

The corporation, notwithstanding the lofty historical, educational, and instructive ends designed by its promoters to be subserved through its agency, was organized for- pecuniary gain, and has invested sixteen millions of its own money in carrying out its object; and the mere fact that the United States were donors of these coins, and the money was the money of the public, cannot, under the terms of the act, impress the entire undertaking with the character of a charitable trust, to be administered and regulated by a court of equity. 3.

This brings us to consider the position that the court might intervene, as prayed, to protect the United States in their possession, use, and regulation of the gi’ounds for the purposes of the exposition.

The argument is that the exposition is a national undertaking, and, as such, an enterprise of the United States; that the tender of the grounds and buildings and their acceptance amounted to a grant of them for a limited time for the purposes named; and that they are therefore in the exclusive possession and control of the United States in every respect. ' If the United States have the paramount authority and dominion involved in this proposition, it is not made clear why resort to a court of equity in aid of the exercise of such authority should be necessary; but, apart from that, we are unable, on the record before us, to concede the exclusive possession and dominion thus asserted, or that congress has proceeded upon any such assumption.

Under the seventeenth clause of the eighth

section of the first

article of the constitution, the congress has power to exercise exclusive legislation “over all places purchased by the consent of the legislature of the state in which the same shall be, for the erection of forts, magazines, arsenals, dock yards, and other needful buildings.” The government becomes the owner for the purposes indicated, and all state authority and jurisdiction over places so acquired may he extinguished; and, indeed, jurisdiction may he transferred where the property is not acquired in accordance with that clause. Benson v. U. S., 146 U. S. 325, 13 Sup. Ct. Rep. 60.

But no such state of case exists here. The United states have not acquired these grounds, and there has Been no cession of jurisdiction. Offenses in that; locality are punishable under state authority, and the police power of the state is in no respect curtailed. It is admit,ted that tin; physical possession is in the local corporation, while it is insisted that it is held for the United Htates; that congress has the right to direct the gates to be closed on any day of the week, and has giVen such direction in the appropriation acts of 1892.

But in that legislation congress did not affect to be acting in the exercise of the police; power, or as a matter of administrative detail, upon the theory of that absolute control which it has over the seat of government and other places within its exclusive jurisdiction. It sought to attain the fulfillment of its wishes in this particular through the condition attached to (he appropriations, and the direction to the commission in respect of the rules.

The provision of the sundry civil act in that regard related to appropriations for the government exhibit and commission, and, as respects the local corporation, added nothing lo the force of the souvenir coin act, unless we arc to hold that the government exhibit and boards occupy such a relation to the corporation that appropriations to them are appropriations to it. Confessedly, unless the alleged exclusive possession and dominion existed in law from the first, the contention fails. The

preamble of the act of April 25, 1890, recited that the contemplated exposition should be of a national and international character, and should therefore have the sanction of Hie congress of the United 'States. This sanction the act gave, but it was carefully framed to protect the government against any and all liability for the cost of construction, control, and administration of the exposition.

The national commission for which it provided was empowered to accept the site and plans and specifications for buildings to be erected at the expense of the local corporation, and tendered by it;, if deemed adequate, and if the commission were also satisfied that the corporation would provide ten million dollars in ample time for use in construction and preparation as the work progressed. In these particulars the commission was to see to it that the exposition did not fall below what it should be in view of its comprehensive character and the countenance extended to it by congress.

Similarly the commission was to determine the plan and scope of the exposition, allot space for and classify the exhibits, appoint judges and award premiums, and have charge'of all intercourse with (lie exhibitors and the representatives of foreign nations. But ike corporation, which was to provide the grounds and buildings, and upon which the burden of the general expense was to fall, was to take charge of the grounds and buildings so provided, and regulate tin; rights of the public therein and to admission thereto, and through such control to obtain the return of its enormous ad-vanees.

It possessed all the powers of like corporations under the laws of Illinois necessary to effectuate the purpose for which it was organized, the holding of an international exposition or world’s fair; that is to say, it derived from the state express power to provide, conduct, and manage the exposition, and all the powers incidental thereto. These powers necessarily included the power to make rules and regulations, and this was recognized by

section 7 of the act of April 26, 1890, with, however, the reservation of the right to modify. The power to make carried the power to amend; and, indeed, the rules as adopted specifically so provided. It is claimed that changed circumstances justified a change of regulation as to closing, and that the new rule has not been modified; but, after all, unless the government possessed the exclusive power to control, regulate, and manage the grounds and buildings, the case would still stand upon the alleged violation of a condition, and the consequences flowing therefrom.

If the status quo were restored, or capable of restoration, through remedy at law, the bill cannot be sustained, neither the commission nor the corporation could impose liability upon the United States. The fifteenth

section provided “that the United States shall not in any manner, nor under any circumstances, be liable for any of the acts, doings, proceedings, or representations of said corporation organized under the laws of the state of Illinois,” or for any of its debts, liabilities, or expenses of any kind; and

section 20, “that nothing in this act shall be so construed as to create any liability of the United States, direct or indirect, for any debt or obligation incurred or created by said commission in excess of appropriations made by congress therefor.” Suitable buildings for governmental exhibits were provided and appropriated for, and a board created to prepare and take charge of such exhibits, and provision was made for the expenses of that board and of the commissioners, but no control was asserted over the construction, preparation, and administration of the exposition, and no appropriation made in aid thereof.

And while the appropriation of August 5, 1892, was made to assist in defraying the cost of completing the work of preparation, the act in terms reaffirmed the provisions of

section 15. In short, the government did not intend to permit any inference of liability beyond what was specifically expressed; nor, by asserting absolute control over the enterprise, to put itself in an attitude which might justify such an implication. The congressional legislation recognized the exercise by the corporation of its appropriate powers, and left to it the matters of construction and of administration to the extent referred to.

The exposition was to be managed, the expenses borne, and the income received, by the corporation, and accordingly it has directed and controlled all the physical -agencies employed in the work of preparation and administration. The corporation selected, with the concurrence of the national commission, Jackson Park as a proper site for the location of the necessary buildings for the exposition.

The South Park Commissioners are a corporation created upon a vote of the legal voters of the South Park district to hold, manage, and control certain lands, of which Jackson Park and the Midway Plaisance constitute a part, “as a public park, for the recrea tion, health, and benefit of the public, and free to all persons forever.” By act of the general assembly approved August 5, 1890, the South Park corporation was empowered to allow the use of the park, or any part thereof, for the purposes of the exposition, on such terms and conditions as might be agreed upon, and thereupon the South Park Commissioners passed the ordinance giving permission and authority to the Illinois corporation to use Jackson Park and the Midway Plaisance for those purposes.

No question is raised as to the competency of the general assembly to allow this to be done, and it is admitted that by a majority vote of the legal voters of the park district bonds were authorized to be issued by the park commissioners as provided for by the act. The ordinance fixed the terms and conditions of occupancy, and was accepted and bond given by the corporation as required.

The contract thus made was with the local corporation, and in virtue thereof the corporation entered into possession, which possession it still retains; and it has never assigned or transferred, or attempted to assign or transfer, to the United States or any other party. Title and physical possession were thus both in the corporation for the purposes of the exposition, and to be held in due accordance with the provisions of the original act of congress in that behalf.

The act did not require the closing of the gates on any particular day, and no interference by the corporation with (he control of the United States over their own buildings and exhibits, the action of the commission and the boards of lady managers and of management and control of the government exhibits, or of the officers of the revenue, is complained of. The situation demanded the harmonious co-opera! ion of the United States, through their agencies, and the corporation, but did not involve the absolute dominion of the one over the other as claimed.

We think, furthermore, the position that the exposition was exclusively an undertaking of the United States, and the corporation a mere agent., is shown to be untenable by the consequence contended to be deductible therefrom that therefore the corporation, while responsible to the state of Illinois for the proper exercise of its franchises, and to its creditors and stockholders for the proper administration of its affairs and property, might be subjected to obligations which it never* incurred, and to indebtedness which it never created, and its ability to discharge its legitimate functions and respond for its legitimate liabilities might be at any moment utterly destroyed.

We find no warrant in the documents before us for holding that the corporation occupied any relation involving such results. The original amount of expenditure was defined, and the assumption to pay and the payment of the further amounts rendered necessary by the expansion of the scope of the affair constituted, under the circumstances, no recognition of the right to impose obligation compulsorily and without consent.

We perceive no reason for attributing to congress, while disclaiming any responsibility whatever for the acts and doings of the corporation, or liability for its obligations of any kind, or any liability for its own designated agents beyond specified. amounts, tlie intention that those agents, or either of them, might contract indebtedness independently of the corporation, which the latter would be compelled to pay.

In the Philadelphia case the exposition was managed by two bodies organized by authority of congress, yet their rights and property were not regarded as in any legal sense the rights and property of the United States. The supreme court held them to be merely organizations through which the people might carry out an enterprise of their own, which was national, in that it had the sanction of the government, but was not therefore a governmental enterprise. Eyster v. Board, 94 U. S. 500. The supreme court said, speaking through Mr.

Chief Justice Waite, that it was very apparent that the object of congress in all its legislation with reference to the Centennial Exhibition was to enable the people of the United States to commemorate “the completion of the first century of their national existence” by an exhibition “in which the people of the whole country should participate,” and which should have the sanction of the government, and that in that sense the object was’ national; but that, it was equally clear that until the act of 1876 it was expected that the entire expense would be borne by the people without assistance from congress.

And as to the appropriation of 1876 it was held, under the terms of the act, that after payment of debts the amount had to be returned before any distribution to stockholders,- — a result reached by construing the word “profits,” as used, to be equivalent to “net receipts.” In that case, as in this, congress, out of abundant caution, lest the enterprise might be regarded as governmental, and, if so, some question might be raised as to the operation of state laws, provided that nothing in the act of congress should be construed so as to override or interfere with such laws or contracts made thereunder; but this was as a measure of precaution, and not by way of a necessary reservation of state jurisdiction, which had not been ceded, and could not be held as surrendered by implication.

Something might well enough be added as to the bearing in a court of equity of this late assertion of absolute dominion after the corporation had so long managed and controlled the exposition and expended sixteen' millions of dollars in the effort to complete the work in a manner commensurate with the magnitude of its design and the honor of the nation, the state, and the municipality, whose interests as well as the interests of all peoples were to be subserved by its success; but we forbear further observations upon this topic.

We are of opinion that the disposition of the case, whether tested by the bill, or, irrespective of any technical adherence to its aver-ments, by the facts shown, must turn upon the legislation of 1892, our views in regard to which have already been sufficiently indicated.

We have given to this record patient investigation, and to the able arguments of counsel the attention which their merits deserved and the character of the controversy demanded, and we can-discover no tenable ground excepting the case from the ordinary rubí which requires, in order to the exercise oí jurisdiction in chancery, some injury to property, whether actual or prospective; some invasion of property or civil rights; some injury, irreparable in its nature, and which cannot be redressed at law.

The ai>plication of that rule is fatal to the maintenance of the order under review; and whatever temptation to leave the beaten path the record of a particular cause may he supposed to afford, it is not for courts of justice, in the exercise of an unregulated discretion, to remove the settled landmarks of the law. The order is reversed, and the cause remanded for further proceedings not inconsistent with this opinion.