MR. JUSTICE JACKSON delivered the opinion of the court.
This was an action by the defendants in error, citizens of the State of New York, against Chicot County, Arkansas, upon 17 bonds and 80 interest warrants or coupons thereto attached, forming a portion of an issue of bonds made and executed by that county, in 1872, for the amount of a stock subscription made by it to the Mississippi, Ouachita and Red
"UNITED STATES OF AMERICA, State of Arkansas.
"It is hereby certified that the county of Chicot is indebted unto and will pay the Mississippi, Ouachita and Red River Railroad Company or bearer, on the first day of January, 1887, five hundred dollars, lawful money of the United States of America, with interest at the rate of six per centum per annum, payable semi-annually, on the first days of January and July of each year, at the Union Trust Company, in the city of New York, on the presentation and surrender of the proper coupon hereto annexed. This bond is one of a series of two hundred, numbered from one to two hundred, inclusively, of like date, tenor and amount, issued under an act of the general assembly of the State of Arkansas, entitled `An act to authorize counties to subscribe stock in railroads,' approved July 23, 1868, and in obedience to the vote of the people of said county, at an election held in accordance with the provisions of said act, authorizing the subscription of one thousand dollars to the capital stock of said railroad company.
"In witness whereof, the said county has caused to be affixed hereto its seal, and has caused the same to be attested by the signature of its county and probate judge, countersigned by the signature of its county clerk, who also signs the coupons hereto annexed, at their office, in said county, this
"STATE OF ARKANSAS:
"The treasurer of the county of Chicot will pay fifteen dollars to bearer at the office of the Union Trust Company, in the city of New York, on the first day of January, 1887, being amount — interest on bond No. 3.
After being summoned in the usual manner the defendant moved to dismiss the suit on the grounds that, since the passage of an act of the legislature of Arkansas, on February 27, 1879, Gannt's Dig. (1884), 350, repealing all laws authorizing counties in the State to sue and be sued, the county could not be sued or proceeded against in any court, state or federal, by complaint and summons, or otherwise than in the manner provided by said act; that the county had not been brought into the Circuit Court in any manner authorized by law, so as to acquire jurisdiction over the same; that the plaintiffs had not presented their demand to the county court of Chicot County, duly verified according to the requirements of the statute, for allowance or rejection, and that without such verification and demand no case against, or controversy with, the county could arise of which any state or federal court could take cognizance or jurisdiction. The second section of the act of February 27, 1879, on which this motion was based, provided "that hereafter all persons having demands against any county shall present the same, duly verified according to law, to the county court of such county for allowance or rejection. From the order of the county court therein, appeals may be prosecuted as now provided by law. If in any appeal the judgment of the county court is reversed the judgment of reversal shall be certified by the court rendering the same to the county court, and the county court shall thereupon enter the judgment of the superior court as its own."
The Circuit Court overruled this motion to dismiss the suit, and this action of the court constitutes the first error relied on for reversal of its judgment. It is claimed for plaintiff in error that, inasmuch as the courts of general jurisdiction in Arkansas
If, under this construction of the act, the allowance or rejection by the county court of any demand against the county, duly verified according to law, has the force and effect of a judgment for or against the county, from which an appeal will lie, it would seem that the making or presenting a demand against the county to the county court is, to all intents and purposes, such a legal proceeding as would permit the application of the rule which plaintiff in error invokes to defeat the jurisdiction of the federal court; for in the case of Gaines v. Fuentes, (92 U.S. 10, 20,) cited and relied on to support its position, it is said, "if by the law obtaining in the State, customary or statutory, they [suits] can be maintained in a state court, whatever designation that court may bear, we think they may be maintained by original process in a federal court where the parties are, on one side, citizens of Louisiana and, on the other, citizens of other States."
If, however, the presentation of a demand against the county, duly verified, according to law, to the county court thereof, "for allowance or rejection" is not the beginning of a suit or does not involve a trial inter partes, it is then only a preliminary proceeding to a suit or controversy which, by the appeal of either side, is or may be carried to an appellate court, before which there is an actual trial between the parties interested.
If, therefore, the presentation of a demand to the county court under the Arkansas statute is not the commencement of a suit against the county, then, under the rule stated in Delaware County v. Diebold Safe Co., just quoted, the court to which such demand may be carried after allowance or rejection receives and determines it as an original cause. In either case the suit is so maintainable in the state courts as to be cognizable by original process in a federal court, where the parties have the proper citizenship to confer jurisdiction. Any other
In the case under consideration the state statute relied on to defeat the jurisdiction of the United States Circuit Court was passed after the bonds sued on were issued and put in circulation, and if its requirement of presenting the bonds to the county court of Chicot County "for allowance or rejection" was binding upon citizens of other States holding such bonds, it would present a very grave question whether it was not such a substantial and material change in the remedy in force when the contract was made, as to impair its obligations. But it is not necessary to consider and determine that question, as the objection to the jurisdiction of the Circuit Court, for the reasons already stated, is not well taken.
The second assignment of error is to the action of the Circuit Court in sustaining the demurrer to the answer of the county. The answer, after setting out the constitutional and statutory provisions of the State, under which the county was authorized
It is further averred in the answer that the county court was not the proper tribunal to determine whether an election had been held in pursuance of the statute regulating the matter;
To this answer there was interposed a demurrer, which was sustained, and the county electing to stand on its answer, and say nothing further in bar of the plaintiffs' right to recover, judgment was thereupon rendered in favor of the plaintiffs, for the amount of the bonds and coupons sued on, with interest and costs of suit.
It is urged by the plaintiff in error that this action of the lower court was erroneous, for the reason that the answer set forth sufficient facts to invalidate the bonds within the rule laid down in Dixon County v. Field, 111 U.S. 83, 92, 93. We do not take this view of the answer. It abounds in recitals, in statements of what papers made exhibits thereto purport to show, and in conclusions of law, which are not admitted by the demurrer, the rule being well settled that only matters of fact well pleaded are admitted by a demurrer, while conclusions of law are not. United States v. Ames, 99 U.S. 35, 45; Interstate Land Co. v. Maxwell Land Grant Co., 139 U.S. 569, 578.
The answer was of such a character as to present no issuable questions of fact going to the merits of the suit, and was properly demurred to, and there was no error in sustaining the demurrer.
Our conclusion is, that the judgment should be