Wilentz v. Sovereign Camp, Woodmen of the World, 306 U.S. 573 (1939)
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Wilentz v. Sovereign Camp, Woodmen of the World
No. 448
Argued March 2, 1939
Decided April 17, 1939
306 U.S. 573
APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES
FOR THE DISTRICT OF NEW JERSEY
Syllabus
1. The requirement of Judicial Code, § 266 that the three-judge court procedure there prescribed, with direct appeal to the Supreme Court, may be invoked only when the suit is one to restrain the action of state officers in the enforcement or execution of a state statute or in the enforcement or execution of an order made by an administrative board or commission, is a requirement of substance, not of form, and it is not satisfied by joining, as nominal parties defendant, state officers whose action is not the effective means of the enforcement or execution of the challenged statute or order. P. 579.
2. The extraordinary procedure before a court of three judges, designed for a specific class of cases sharply defined by the statute, cannot properly be extended to cases in which there is no substantial basis for relief by injunction restraining the action of state officers in enforcing or carrying into effect a challenged state statute of general application. P. 582.
3. The New Jersey Municipal Finance Commission Act, as amended, provides a scheme for the management of the affairs of any municipality found by the state supreme court to be unable to meet its obligations when due by a commission composed of state officers acting in conjunction with the municipal authorities. The Act provides that, where the Commission shall function in any municipality or coterminous school district, all suits to recover upon school bonds, and execution on judgments in such suits, shall be stayed, except when such proceedings may be authorized by the state supreme court under conditions calculated to secure equality to all creditors. Also, the governing body of a district in which the Commission is functioning is authorized to compromise delinquent taxes, except claims in excess of $500, which may not be compromised without the written assent of the Commission. Assailing the stay and compromise provision of the Act as violative of the contract clause of the Federal Constitution, a creditor who had recovered a judgment on previously acquired school bonds brought suit to restrain the Commission from functioning in the municipality and from assenting to the compromise of delinquent taxes due the municipality and to restrain the local tax collector from carrying into effect any such compromise.
Held:
(1) The suit was not maintainable under Judicial Code § 266, and this Court was without jurisdiction of a direct appeal thereunder. P. 582.
(2) As the prescribed stay becomes effective by virtue of the statute whenever the state supreme court finds that the municipality is unable to meet is obligations, the Commission is without power to grant or withhold a stay, there is no occasion to enjoin action of the Commission as the means of preventing operation of the stay provision, and the suit, so far as it seeks to set them aside, is not required by § 266 to be tried by a court of three judges. P. 580.
(3) The Commission is similarly without authority to enforce provisions of the statute authorizing municipal authorities to compromise delinquent taxes, and to consent to a compromise which it cannot command is not an "order" within the meaning of § 266. P. 580.
(4) The injunction sought to restrain the Commission from assenting to compromises of delinquent taxes arranged and to be carried into effect by local officers is but incidental to the purpose of the suit to prevent the performance by local officers of a local function, and such a suit is not to be brought within the purview of § 266 by the expedient of adding as nominal parties the members of the Commission who are state officers but whose presence is not necessary to prevent operation of the challenged statute, and whose only action is the approval of that of local officers to be taken under the statute. P. 581.
4. Although without jurisdiction to hear the merits of the appeal under § 266, this Court, in the exercise of its appellate jurisdiction, may give directions appropriate to enforce the limitations of that section, and, where the appellants have already taken an appeal from the decree below to the Circuit Court of Appeals, their remedy will be preserved by simply dismissing the appeal taken to this Court. P. 582.
23 F.Supp. 23, appeal dismissed.
Appeal from a decree of the district court of three judges holding a state statute unconstitutional and granting relief by injunction against certain public officers acting pursuant to it.