Trustees of the Internal Improvement Fund v. Bailey

| Fla. | Jul 1, 1862

WALKER, J.,

delivered tlie opinion of the Court.

The complainant in the Circuit Court for Middle Florida asked by his bill filed in this case, that the Trustees of the Internal Improvement Fund be restrained from appropriating any portion of said Fund to the clearing out of the mouth of the Apalachicola river, claiming that such appropriation would be in derogation of his right as a large bond holder under the Act of January 6th, 1855, creating said fund, and providing for the existence of said Trustees.

The Trustees answer among other things that they are expressly commanded to make the appropriation complained of by an act of the General Assembly of February 14, 1861.

The cause was submitted on bill, answer and exhibits, and the Judge of the Middle Circuit having granted and perpetuated the injunction as prayed for, the case is brought before this Court by appeal.

The questions presented by the record for our consideration are: First, Did the General Assembly of 1855 have the power to pledge the Internal Improvement Fund as it did, to aid in the construction .of certain roads, &c ? Second, If they had the power to make such pledge, would any subsequent General Assembly have the power to divert any portion of said Fund to other purposes than-those designated in the Act of 1855 ? Third, Is the appropriation sought to be enjoined by the Appellee in derogation of his rights as a bondholder under the Act of 1855? And Fourth, If so, has he a remedy by injunction against the Trustees ?

It was argued at the bar that the General Assembly could not pledge the Internal Improvement Fund as it did in the Act of 1855, because the 11th Section of the 13th Article of the Constitution declares that the General Assembly shall not pledge the faith and credit of the State to raise funds in aid of any corporation whatever. But to our minds the differenee between appropriating or pledging a fund already raised by the gift of the United States to the State of Florida, and the pledging of the faith and credit of the State to raise funds not yet in existence, is too manifest to admit of much argument. It is very clear that the General Assembly could not issue what are know as “ faith bonds” in the banking history of this country, thereby pledging the faith and credit of the State to raise funds in aid of any corporation, but we think it equally clear that the General Assembly may convey in trust, pledge or mortgage, for the benefit of those who may aid in the construction of certain Infernal Improvements, a fund already existing and possessed by the State through the cession of the United States, and more firmly are we of this opinion when we read the second clause of the eleventh article of our State Constitution which declares thus: “ A liberal system of Internal Improvements being essential to the development of the resources of the country, shall be encouraged by the Government of the State, and it shall be tlie duty of the General Assembly, as soon as practicable, to ascertain by law proper objects of improvements in relation to roads, canals and navigable streams, and to provide for a suitable application of such funds as may be appropriated for such improvements.”

Nor is it a valid objection to the Act of 1855, that it does not designate one or more rivers for improvement as well as a canal and certain Kailroads. It surely could not have been the expectation of tlie framers of the Constitution, that' the General Assembly would be able at any one time to designate all the improvements that were through all time to be aided by this magnificent fund; on the contrary, the General Assembly -wore to do this “as soon as practicable,” arid as we think from time to time, as the means at ■ their command would justify it.

It is very evident, that if the General Assembly had at one time provided for tlie building of all tlie roads, tlie digging of all the canals, and the clearing out of all the navigable streams it would ever be desirable to build, dig and clear out, that the scheme would have been so gigantic, and the fund subjected to such a multitude of drains at tlie same time, as effectually to discourage capitalists from investing their funds in aid of any improvements whatever. But the General Assembly, as we think, took a wise view of tlie Constitution and therefore designated in the beginning’,'only a few grand objects, vital to tlie whole State, for improvement, leaving others to wait for their share of State aid, until those first inaugurated should have passed successfully through the fiery ordeal of their difficult and doubtful struggle into existence. Accordingly the General Assembly of 1855 designated for State aid, in tlie first instance, only a line of Railroad from Jacksonville to Pensacola, from Fernandina to Tampa Bay with a branch to Cedar Key, from Tallaliassee to St. Marks, and a Canal between tlie Indian and St. Johns rivers. After these roads should be built and prove a success, by being able for five consecutive years to pay six per cent, on tlie capital stock paid in and tlie interest on tbe bonded debt and one per cent, yearly to a sinking fund on said debt, “¿Aera,” as provided by section 27, “ the Trustees of the Internal Improvement Fund may. apply, under the direction of the Legislature, tlie annual income arising from said fund to other purposes of Internal Improvement,” &c. So it will be seen that it was not the design to absorb the whole fund in aiding the designated improvements to the exclusion of all others, but only to postpone all others till those first designated should have been put into successful operation. This we clearly think the General Assembly had the right to do.

But it was also objected to the act of 1855, that it is in violation of tlie Act of Congress ceding the lands composing' the Internal Iinpi'oVettient Fund to the State of Florida. — » We will not discuss this question; it is enough for us to know that the Trustees, the Appellants here, derive their existence entirely from the Act of 1855, They are its creatures and cannot be heard to complain that the author of their being did not give them greater powers or less, or did not frame them in anywise different from what they are.— They must execute the law as they find it, and if they deem it so fraught with folly, fraud or injustice, that they cannot consent to superintend its operations, we know of no escape for them except in resignation.

It was further objected against the Act of 1865, that the power reposed by the Constitution in the Legislature, over the lands composing the Internal Improvement Fund, could not be delegated to the Trustees, it being a matter of personal confidence and discretion, but as we have before stated, the Trustees, the Appellants, cannot be heard to impeach the very act which gives them existence, and besides, if they could succeed in showing that the General Assembly of 1855 could not delegate the powers contained in that act, would they not show at the same time that the General Assembly of 1861 could not delegate similar powers in the very act under which they claim the right to make the appropriation complained of? It seems to us that this alone is sufficient answer to this objection. But we will state further on this head, that the State can contract and be contracted with, and carry on the operations of her government only through the instrumentality of her agents, and of course Her Legislature must have authority to delegate to her agents such powers as will enable them to carry out her constitutional wishes. No better illustration of this can be found than that afforded by the case before us. The Legislative Department is required by the Constitution “ to encourage a liberal system of Internal Improvements,” to “ ascertain proper objects of improvement and to provide for a suitable application of such funds as may bé appropriated for stich improvements.” How could these requirements of the Constitution be tom-plied with except by delegating the necessary powers to trustees or agents ? It is impossible. .

We conclude, therefore, after mature reflection On tiie first point, that the General Assembly of 1855 did have the power and right under the Constitution to páss the Internal Improvement Act of that year.; that they.did have the power and right to convey the lands and money composing the Internal improvement Fund to' Trustees to be held iii pledge, mortgage, or trust, for the payment of the interest of the bonds authorized by said Act, and the other purposes therein enumerated.

Nor can Wé persuade Ourselves that the General Assembly of 1851 had the power to interfere in the slightest degree with any rights Which have become vested under the Act of 1855. By that act, all the Internal Improvement Fund is conveyed to Trustees for certain purposes therein named, among Which is the payment of the interest on certain bonds,such Us those now held by the Appellee. And now that said bonds have been issued and have passed for a valuable' consideration into the hands of bonafide holders who have taken them from motives of patriotism, and upon the faith both of Constitutional provisions and Legislative enactments; now that our roads have been in a great measure built with the very money furnished by the holderfe of these bonds, and the whole State is rejoicing' in the rise of them, surely it would be in the last degree Wrong for a subsequent Legislature to' say in effect, by their act, to the bond holders, “ we' have gotten all out of you We Wanted, We have gotten your money and built our roads with it, and no W we will take the fund which We solemnly and irrevocably pledged to the pav-ment of your interest and appropriate it to tlie making of other improvements.” But such is not the law. The State is as capable of making a contract as an individual is, and when made is as much bound by it.

The Legislative Department can constitutionally pass no law impairing the obligation of her contracts, and when it attempts to do so, it is the solemn duty of the Judicial Department, co-equal and co-ordinate with the Legislative, each being supreme in its own sphere in the constitutional system, to declare such law null and void.

When the General Assembly of 1855 conveyed the Internal Improvement Fund to Trustees for the benefit of the purchasers and holders of the bonds to be issued under it, and for the other purposes therein named, they made a law in the nature of a contract, and the Supreme Court of the United States, in Fletcher vs. Peck, 6 Cranch 87" court="SCOTUS" date_filed="1810-03-16" href="https://app.midpage.ai/document/fletcher-v-peck-84935?utm_source=webapp" opinion_id="84935">6 Cranch 87, say: “ When, then, a law is in its nature a contract, when absolute rights have vested under that contract, a repeal of the law cannot divest those rights.” [See also Ferrett vs. Taylor, 9 Cranch, and Winter vs. Jones, 10th Ga., 190.]

The Act of 1861 is an attempt to repeal the act of 1855, in so far as it seeks to divest the Internal Improvement Fund from the purposes therein indicated, which, as we have shown, cannot be done, since rights have become vested under it.

The next question in order is, would the appropriation sought to be enjoined be in derogation of tbe right of the complainant as a bond bolder under the act of 1855? We think it would. The clearing out and improving the channel of the Apalachicola river is not one of the Internal Improvements designated in said act. All the fund having been appropriated, for the present, to tlie purposes mentioned in the act, it follows of course, that the rights of those who have purchased bonds on the faith of that appropriation would be violated if any portion of the fund should be applied to any other purpose so as to endanger their security.

But it has been argued that the Internal Improvement Fund is a vast one, consisting originally of about twelve millions of acres, and that the portion ‘which the Trustees are about to appropriate to another object is so small as not to effect the safety of the bond holders. ^ We are not satisfied of this. An exhibit in the case shows that the amount of bonds already issued under the Act of 1855 is $3,512,860. We are not informed how much has been appropriated to the Indian Fiver Canal, nor are Ave informed lroAv much it will take to clear out the Apalachicola river, whether twenty, fifty or a hundred thousand dollars, but we are inclined to think, from the figures before us, that no money can at present he spared from the Internal Improvement Fund for other purposes than those indicated in the Act of 1855 ; and besides, this is not a question of ability, but of principle, for. if it be once conceded tliat the fund may he applied to other purposes than those named in the Act, there will he no limit, and in a short time Ave should probably see tbe whole fund frittered aAvay on a thousand local enterprises, and the object of the Constitution in requiring a system of Internal Improvements, to be adopted would be entirely defeated.— Instead of having tliat great Constitutional system which aves designed by James T. Archer, one of the purest men and brightest intellects that ever adorned and blessed the State, in conjunction with other great men whose names may be associated with bis after death ; - instead of that system which has enabled the State of Florida, the weakest in population among her sisters, to build more Failroad in the same length of time than any other State in the world; instead of that system which in a few years has connected by railway, Jacksonville with Quincy, Tallahassee with St. Marks, and Feruandina Avitli Cedar Keys, which is rapidly opening the Canal between the Indian and St. Johns rivers, and has graded the road in the direction to Tampa as far as Ocala, and promises in a short time after peace shall again smile on our land to complete the road to Tampa in the South, and Pensacola in the "West, and then leave a fund sufficient to make all other improvements in the State that may be desirable; instead of this system which has done so much and promises to do so much more, if we permit the fund to be applied to new, disjointed, fragmentary enterprises, unconnected with amj system, we shall see the whole fund exhausted, nothing great accomplished, and our Constitution, together with the pledged honor of the State to bond holders, violated.

Tbe only question remaining is whether the Complainant has a right to the remedy by injunction prayed for against the Trustees % It has been argued that he has not, because -the Trustees represent the State, which cannot be sued. It is true tbe State cannot be sued, but where the State appoints an Agent or Trustee to pay a particular debt, or class of debts, with a specific fund, it has never yet and never can be held that tbe party interested in the fund may not intervene by injunction to prevent sucb agent from appropriating tbg fund to an entirely different purpose. Such is the case here.

The General Assembly has, in compliance with the express command of the Constitution, inaugurated a liberal system of Internal Improvements, lias ascertained by law proper objects for improvement, has appropriated certain funds for those improvements, and has provided for a suitable application of those funds to said improvements by placing tbe funds in the hands of the Trustees, the Appellants, with strict injunctions to that effect. One of the specified purposes for which the Trustees hold th,e fund is the payment of the interest on the bonds held by Appellee, and when he sees the Trustees about to apply those funds to other purposes than those specified in the act of conveyance, so as to endanger his claim, by lessening his security, it is his undoubted right to have them restrained from doing so by injunction, and this, even though the threatened misappropriation should be under the command of a subsequent Act of the General Assembly itself.

Let the decree of the Circuit Court be affirmed with costs.