10 Wis. 195 | Wis. | 1860
By the Court,
This action was brought to recover interest on coupons attached to town bonds issued by the appellant in 1853, for the purpose of aiding the construction of the Racine and Mississippi railroad. The bonds were issued under an act of the legislature, authorizing the board of supervisors of the town, to subscribe one hundred thousand dollars to the capital stock of a railroad company, authorized to construct a railroad from the city of Racine to the village of Beloit, and to pay for such subscription in the bonds of the town, payable in twenty years, with inter
But the fundamental question raised and discussed in the case, is in regard to the power of the town to subscribe for stock in, and to loan their credit to railroad companies, even when authorized by an act of the legislature so to do. Unless expressly authorized by the legislature to make the subscription, it is not contended that any could have been made in behalf of the town. But having been authorized by an act of the legislature, it must be admitted, that upon the authorities, the subscription made in conformity to the provisions of the act is valid, unless the law is unconstitutional. It is true, some objections were taken to this legislation, based upon general principles of law and sound policy, aside from the prohibitions of our constitution. It is said to be entirely foreign to the object and purpose of a town or municipal corporation to subscribe stock to aid in constructing railroads, or to carry on works of internal improvement of this
The precedents for this kind of legislation are so numerous; the sanction which it has received from the executive, legislative, and judicial departments of the government, in other states, is so uniform; the rights and interests vested on the faith of it, are so important, when considered'in connection with the fact that the laws were to have no effect, unless with the assent of the people directly affected by them; and after the subject was fully discussed by the press, and in public meetings, the people directly interested, voted in favor of these subscriptions, thereby authorizing their corporate authorities to make them; and also when it is borne in mind, that great amounts of capital have been invested in the bonds of towns, counties, and cities, thus issued, by innocent bona fide holders; when all these considerations are regarded, it seems rather late to raise the objection that this policy has been all wrong from the beginning; that the legislation, by which the present condition of things has been brought about, is not wise and wholesome, but evil and pernicious, and must now be repudiated' altogether.
But, unless the constitution does restrain the legislature from conferring upon towns, counties and cities the authority to make subscriptions to the capital stock of companies incorporated to construct rail roads, in which- they áre interested, it is the plain manifest duty of the courts to sanction this kind of legislation. Considerations in respect to its wisdom and sound policy must be addressed to another forum. These general observations were deemed not inappropriate as an answer to some remarks made by counsel in the argument of the present case, and that of Clark et al. vs. The City of Janesville, which involves substantially the same questions under the constitution.
I will now proceed to notice the various provisions of the constitution which are relied upon to show that all acts of the legislature authorizing towns, counties and cities to subscribe to the capital stock of railroad companies, and issue bonds for such subscriptions, are unconstitutional and void. The two following provisions may he conveniently considered together.
Section 3 of Art. VIII. reads as follows: “ The credit of the state shall never be given or loaned in aid of any individual, association, or corporation.” And, section 10 of the same article : “ The state shall never contract any debt for works of internal improvement, or be a party in carrying on such works.” It is difficult to perceive how these provisions can fairly be said to apply to anything but the state in its political capacity as such. The whole article appears to he
The town of Beloit, or the city of Janesville, might give or loan its credit in aid of a corporation, without the credit of the state becoming pledged in any way thereby. Such indebtedness would be the indebtedness of the town or the city, not the indebtedness of the state. It might with the
But it was further contended, in behalf of the town, that if the state itself was prohibited from loaning its credit in aid of a corporation, or from building railroads, or of becoming
We suppose it to be a well settled political principle that the constitution of the state is to be regarded not as a grant of power, hut rather as a limitation .upon the powers of the legislature, and that it is competent for the legislature to exercise all legislative power not forbidden by the constitution or delegated to the general government, or prohibited by the constitution of the United States. The legislature, subject to a qualified veto of the executive, possesses all the legislative power of the state. If there is nothing in the constitution forbidding it, why was it not competent for the legislature to authorize towns and municipal corporations to subscribe stock for rail roads. But a sufficient answer was given to this argument by the counsel who sustain the validity of these bonds, by saying that if the proposition was sound that the state could not authorize a municipal corporation or town to do what itself could not do, that the argument proved too much, and therefore must be rejected. It would go to the extent of denying that the legislature could create corporations^ build rail roads, plank roads, gas works, and for doing many other things which the state cannot do. These corporations have been created since the organization of the state government; various works of internal improvement have been carried on by them; they have exercised the right of eminent domain in the prosecution of their enterprises, and the constitutionality of this legislation has not been questioned.
It is very true that in some of the cases sustaining the constitutionality of laws authorizing towns" and municipal corporations to subscribe for stock to rail road companies, it is
Another objection taken to the constitutionality of this legislation may be disposed of in this connection. It is said that subscribing stock and issuing bonds for building railroads, is no legitimate part' of the authority of a' city or a town, and certainly foreign to the purpose for which they are created. Sections 1 and 3, of article IX, are relied upon to sustain this position. It is evident that section one was intended to regulate the manner in which corporations should be created by the legislature. It provides that “ corporations, without banking powers or privileges, may be formed under general laws, but shall not be created by special act, except for municipal purposes, and in cases where, in the judgment
It was further objected, that towns, cities and counties are organized and created' strictly for governmental or police purposes, and that the building of railroads, and embarking in a system of internal improvements, on account of some benefits which may accrue from such works, to the citizens, is foreign to the objects, and a perversion of the powers of these corporations. I have already alluded to this objection, and I do not propose to discuss the proposition more. That it is competent for the legislature, in the absence of constitutional restrictions, to confer upon towns and cities the power to subscribe stock for railroads, has been 'generally affirmed by the courts where the question has arisen. I could add nothing to the reasoning of these cases, were I to enter upon the discussion of the question involved. The subject is very ably discussed in the decisions to which I have referred, and I am content to rest the question upon those authorities, providing our constitution does not render them inapplicable.
I cannot perceive that section 3, of article XI, can possibly have any application to this case. That section makes it the duty of the legislature “ to provide for the organization of cities and incorporated villages, and to restrict their power of taxation, assessment, borrowing money, contracting debts, and loaning their credit, so as to prevent abuses” of the same.. The town of Beloit is not one of those corporations embraced within this section, as in effect, was decided in the case of-
There remains to be noticed one or two clauses of article VIII, which, it is claimed, have some bearing upon the law in question. And I will merely say, in reference to the 4th and 8th clauses of that article, that like the 3d and 10th, they appear to me to relate to the state, and to a state indebtedness, or to a law directly imposing, a tax, and not to one authorizing a town to subscribe stock, if the people of such town shall vote to do so. The remarks which have already been made upon the other clauses of that article, apply to the ones now being considered. This law authorizing the super
A few subordinate points remain to be noticed. It was objected that the railroad company had no power to exchange its stock for bonds of the town of Beloit. But the act authorizing the town to subscribe the stock, was a sufficient authority to the company to receive the subscription. What legislation whs necessary to authorize the company to receivS a subscription, which the town has ample power to make?
Again, it was objected, that the supervisors had no authority to make the subscription, and issue the bonds, on account of some alleged omission to comply with the provisions of chapter 12, Pr. Laws, 1853, in giving notice of the election, and canvassing the votes, &c. I am unable to discover any defect in the notice, or any such irregularity in conducting the election, or ascertaining the result, as should in any wise affect the validity of the bonds in the hands of the respondent. Indeed, the election appears to have been legally conducted ; and the circumstance that the inspectors, when they canvassed the votes, stated the result in figures, instead of writing the numbers out in full, ought' not to affect the validity of these securities. If irregularities in the election in fact existed, or if the notice was defective, the case of The Commissioners of Knox County, Indiana, vs. Aspinwall et al., 21 How., U. S. R., 539, is an authority in point'to show that such matters would not constitute a good defence in this action.
Upon the finding of the circuit court, I have no doubt but the judgment of that court is right, and must be affirmed.