23 S.C. 57 | S.C. | 1885
The opinion of the court was delivered by
These two cases, involving the same
In pursuance of the provisions of this ordinance, the City Council of Charleston, from time to time, issued its bonds, commonly called “Fire Loan Bonds,” and loaned the same to various individuals, under the terms and regulations prescribed. The plaintiffs in.the cases above stated, being the owners and holders of some of these bonds, all of which were issued after the adoption of the constitution of 1868, brought these actions on certain past due coupons of said bonds, and the defence set up was that the act authorizing the issue of these bonds is unconstitutional, and that therefore the City Council is not liable for the same. The Circuit Judge held that the question was concluded by the cases of Copes v. City of Charleston (10 Rich., 491), Gage v. Charleston (3 S. C., 491), and State ex rel. Brown v. C. & L. R. R. Co. (13 Id., 290), and rendered judgment for the plaintiffs in both of these cases. From these judgments defendants appeal and present for our adjudication the single question as to the constitutionality of the law authorizing the issue of the bonds in question.
The power to levy taxes is essential to the existence of any government, but it is not, and from the very nature of the subject cannot be, an unlimited power. Even in the absence of any express constitutional restriction it cannot be said that the power of the legislature to impose taxes is unlimited, for that would necessarily imply that the legislature, under the guise of imposing taxes might exercise the power of confiscation. Hence it seems to be universally conceded, even by those who are disposed to enlarge the taxing power of the legislature to its greatest extent, that a law authorizing taxation for any other that a public purpose is void. As is said by Cooley in his work on Constitutional Limitations (p. 487): “Everything that may be done under the name of taxation is not necessarily a tax; and it may happen that an oppressive burden imposed by the government, when it comes to be carefully scrutinized, will prove, instead of a tax, to be an unlawful confiscation of property, unwarranted by any principle of constitutional government.”
In Allen v. Jay (60 Me., 124, 11 Am. Rep., 185) it is said: “A tax is a sum of money assessed under the authority of the State on the person or property of an individual for the use of the State. Taxation, by the very meaning of the term, implies the raising of money for public uses, and excludes the raising if for private objects and purposes.” In Lowell v. City of Boston (111 Mass., 454, 15 Am. Rep., 45) we find this strong language: “The power to levy taxes is founded on the right, duty, and responsibility to maintain and administer all the governmental functions
When in addition to this we find that the constitution of 1868, in art. I., sec. 41, expressly declares that “the enumeration of rights in this constitution shall not be construed to impair or deny others retained by the people, and all powers not herein delegated remain with the people,” we think there can be no doubt that even in the absence of any express restriction upon the taxing power of the legislature such power can only be exercised for some public purpose, and that whenever it is attempted to be exercised for a private purpose, it is the duty of the courts to declare such legislation void.
Our next inquiry is, whether the purpose for which the bonds in question were issued, and which necessarily involved the power to levy taxes for their payment, was a public purpose. The purpose, as declared by the ordinance, which has been ratified by the act of the legislature, was “to make loans of said bonds to such applicants as will build up and rebuild the waste places and burnt districts of the city of Charleston, or erect improvements
We cannot conceive how it is possible to invest the manifest purpose of this loan on the part of the city with a public character. It is true that there would be incidental advantages accruing to the city by the increase of it taxable values, and in various other ways that might be suggested, but these are mere incidental advantages which attend any improvements made in a city, even where they are exclusively the work of private individuals, made with their own private funds, and cannot, therefore, have the effect of converting the purpose from a private into a public purpose. These views are fully sustained by the cases of Allen v. Jay, Loan Association v. Topeka, Parkersburg v. Brown, and Lowell v. City of Boston, cited above.
It is argued, however, and the Circuit Judge rested his decision upon such argument, that the question is concluded by the decisions which maintain the constitutionality of acts affording aid in the construction of railroads. It is true that the constitutionality of such legislation seems to be settled by the weight of authority, though grave doubts have been entertained by some whose authority is entitled to the highest consideration as to the correctness of such decisions. Conceding, however, for the purposes of this case, that such legislation is constitutional, we think that it does not by any means follow that such decisions are con-
So in Olcott v. The Supervisors (16 Wall., 678), while considering a similar question, Mr. Justice Strong says : “No one contends that the power of a State to tax, or to authorize taxation, is not limited by the uses to which the proceeds may be devoted. Undoubtedly taxes may not be laid for a private use.” But he goes on to argue that railroads, although owned and constructed by private corporations, are public highways; that the right of eminent domain, which can only be exercised for public purposes, may be exerted to facilitate their construction; and that they are open to the use of the public under such regulations as may be prescribed, and therefore he concludes that the construction of a railroad is such a public purpose as to warrant the imposition of taxes in aid of its construction.
In Dillon on Mun. Corp., § 1055, after speaking of the various decisions which-seem to have established the constitutionality of legislation in aid of the construction of railways, that distinguished author says : “But it is obvious, from this statement of the grounds upon which the validity of such legislation rests, that it furnishes no support for the validity of taxation in favor of enterprises and objects which are essentially private. We consider the principle equally sound and salutary, that the mere incidental benefits to the public or the State, or any of its municipalities or divisions, which result from the pursuit by individuals of ordinary branches of business or industry, do not constitute a public use in the legal sense which justifies the exercise either of the power of eminent domain or of taxation.”
It may be, and has been, said that while the power of taxation is limited, so that it can only be applied to a public purpose, yet it is for the legislature, and not for the courts, to determine what are public as contra distinguished from private purposes; and that when the legislature has passed an act granting aid to any enterprise, it must be assumed that they had first determined that the purpose or object which they had in view was a public purpose, as it cannot be properly assumed that the legislature would wilfully transcend its constitutional powers. If, as wm have seen, the power of taxation is limited by the use to which it is to be applied, and if the legislature is restricted in the exercise of the taxing power by the use to which the taxes are to be applied, it would be strange indeed if it was to be the final judge as to the limits within which its own power is restricted. This, as we have said, in discussing a similar question in the recent case of Whaley v. Gaillard, Treasurer (21 S. C., 560), would amount to no restriction at all.
If the same body whose power is intended to be restricted is to finally determine when it has reached the limits beyond which it is forbidden to go, there would be, practically, no limitations upon its powers. As we understand it, one of the very objects for which this court was constituted, was to determine finally, not only the construction, but also the constitutionality of the laws passed by the law-making power. True, as has been well said, in Ex parte Lynch (16 S. C., 32): “It is a delicate thing to declare an act of the legislature unconstitutional. * * * Implied limitations of legislative power are only admissible where the implication is necessary. * * * The constitutionality of a law must be presumed until the violation of the constitution is proved beyond all reasonable doubt, and a reasonable doubt must be solved in favor of legislative action, and the act be sustained.” But when the legislature has clearly overstepped its constitutional powers, it is not only the right, but the duty, of this court so to’declare.
We are satisfied that it is settled beyond all dispute that the
Now, there can be no doubt that, in each and all of these cases, as well as in the case now under consideration, the principal motive which prompted the legislature to adopt the legislation in question was the belief that thereby the public welfare would be promoted by securing the completion of enterprises which would add to the taxable values of the several towns or cities, and in
We are entirely satisfied, therefore, that the act in question is without constitutional authority and void. From this it follows that the bonds in question constitute no valid obligation of the city of Charleston and hence no action can be maintained to enforce their payment.
It is argued, however, that the usage and practice of the various departments of the State government have so fully recognized these bonds that it is too late now to question their validity; and the case of Herndon v. Moore (18 S. C., 389) is relied upon. That case, however, differs in many essentials from this. There, the power of the Court of Probate to make partition of real estate had been repeatedly recognized both by the legislative and judicial departments of the government, and rights had been acquired, titles vested, and money paid upon the faith of such recognitions of these two departments of the government, and to relieve parties who had thus acted upon the confidence which they might naturally repose in the combined action of these two departments of the government, the doctrine of communis error fácil jus, admitted to be an exceptional doctrine, was applied. But in the
It is true that there are instances in which the old fire loan sterling bonds, issued by the State, under the act of 1838, have been recognized as valid obligations, though no instance has been brought to our attention in which the constitutionality of the act authorizing their issue has been raised. But we are not dealing with that class of bonds. They were issued under the former constitution of the State, and rest upon a different foundation from the fire loan bonds issued by the city of Charleston since the adoption of the constitution of 1868, and it is the validity of these alone that we are now called upon to consider.
Again, it is said that the City Council of Charleston are estopped by their own acts from disputing the validity of these bonds: by paying interest on them from time to time, by purchasing them in the market, and by suing the bonds of private individuals to whom these fire loan bonds have been issued. If the City Council was never invested with power to issue the bonds, it is difficult to understand how any act they might do could estop them from disputing their validity. If they could not create the obligation by the formal act of signing the bonds, through their proper officer, under the seal of the corporation, we cannot conceive what other act could give the bonds any greater validity. It may well be that it is not only the right, but the duty of the City Council to collect from those who have borrowed the amounts due by them, and apply the same to the payment of the fire loan bonds; and that by proper proceedings they may be compelled so to do (Parkersburg v. Brown, 106 U. S., 487, and City Council of Charleston v. Caulfield, 19 S. C., 201), but that is not the question noAV before us. All that we are now called upon to determine is Avhether the bonds, from which the coupons sued upon in these cases were taken, constitute valid obligations of the City
The judgment of this court is that the judgment of the Circuit Court in each of the cases named at the head of this opinion be reversed, and that the complaint in each of said cases be dismissed.