80 Md. 510 | Md. | 1895
delivered the opinion of the Court.
This is an appeal from an order of the Circuit Court for Talbot County, directing a writ of injunction to be issued restraining the County Commissioners of that county from issuing the bonds mentioned in chapter 295 of the Acts of
Such of the facts appearing by the record, as are requisite to be stated for the purposes of this opinion, may be thus briefly set forth. The Baltimore and Eastern Shore Railroad Co. was incorporated by the General Assembly in the year 1886, for the purpose of constructing and operating a railroad through Talbot and other counties of the State of Maryland. At the same session, by chapter 509, the Com-' missioners of Talbot County were authorized to endorse the bonds of the Railroad Company to an amount not exceeding $50,000, after it had been sanctioned by the voters of Talbot County; such bonds were to be secured by a mortgage which should be second to a mortgage to the city of Baltimore. This Act, which authorized only an endorsement of bonds, and not a subscription to the stock of the railroad, though voted upon favorably by the voters of Talbot County at the general election of 1887, it is conceded became inoperative for the purpose of authorizing the proposed endorsement, for reasons not necessary to be now stated. By the Act of 1890, ch. 150, the County Commissioners of Talbot County were authorized to subscribe to the capital stock of the company to the amount of $25,000. This Act, however, was not'published as required b.y Article 3, sec. 54 of the Constitution, and for that reason became invalid. Soon after its incorporation in 1886, the railroad company proceeded to construct its road, and having fully completed it, operated it until the 21st of April, 1891, when, having become totally insolvent, its property rights and franchises passed into the hands of a receiver, appointed by the Circuit Court óf the United States for the District of Maryland; and since that date, under the decree of that Court, all of its property and franchises have been sold to other parties. So
From this recital it is clear that, prior to 1892, there had never been any valid power conferred upon the County Commissioners either to endorse the bonds of the company or subscribe to its stock; nor is it pretended that they ever undertook to exercise such power. In the agreement of parties, found in the record, it is stated that the Commissioners “ never passed any resolution to endorse the bonds * * or to subscribe to the stock.” The statement, therefore, contained in the preamble of the Act of 1892, ch. 295, also in the body of the Act (and also in the Act of 1894, ch. 152), to the effect that the authority to issue bonds was conferred for the purpose of raising money to “pay the county’s subscription” to th^ capital stock of. the railroad company, was wholly unfounded in fact. The County Commissioners never did (and never had the power to) make such subscription. There is no question in this case, therefore, of good faith on the part of the county, no contractual element to embarrass the Court in determining the strictly legal effect of the Act of 1892, ch. 295, and the confirmatory Act of 1894, ch. 152.
What, then, are the provisions of these Acts ? By the first section of the Act of 1892, the Commissioners are authorized to issue the bonds of the county to the amount of $2¡,000; by the second, it is provided that they “shall sell said bonds,” and with the proceeds thereof pay said subscription of said county to said railroad company; provided, however, that before any bonds shall be issued under this Act, the said railroad company “ shall file, in the office of the County Commissioners of Talbot County, an agreement, in writing, authorizing the said County Commissioners of Talbot County to first pay and satisfy all proper and legal
To comprehend these provisions thoroughly, it must be borne in mind that the railroad company, at the date of the passage of the Act, had fully constructed its road. It had also become insolvent, and on the day after the date mentioned in the Act, that is, on the 21st of April, 1894, it had passed into the hands of a receiver. No doubt it had many creditors. In Talbot County there were claims exceeding in the aggregate the entire amount of the proposed subscription, and the record shows there was a bonded debt of $ 1,600,000, secured by a mortgage upon all the property of the company. Subsequent events have shown that its insolvency was hopeless ; such as could only terminate as it did — in a sale for the benefit of its mortgage creditors. Under these circumstances it was plain there was little probability that these creditors in Talbot County, unsecured as they were, could ever hope to have their claims paid in the ordinary way. Now, as was said by this Court in M. & C. C. of Balto. v. Gill, 31 Md. 387, “ we must not forget that we are dealing with the substance, not with form. It is the thing done or sought to be accomplished which must determine the question of the power.” The purpose of this
Nor can this Act be supported under the 54th sec. of Article 3. The object of this section was not to extend the power of taxation. It is, in fact, “a limitation of power, not only of the local authority, but of legislative power itself.” Pumphrey's case, 74 Md, 111. Counties have “no inherent power of taxation.” What power of taxation they exercise must be delegated to them by the Legislature. The Legislature, however, cannot delegate a power prohib
Being of the opinion that the object and effect of this Act is not to subserve a public purpose, but to pay certain individuals by taxing the property of the people of Talbot County for their benefit, we must pronounce the.Act itself unconstitutional and void.
Inasmuch as what we have said disposes of the case, we deem it unnecessary to consider the other questions raised at the argument.
Order affirmed.