82 Iowa 388 | Iowa | 1891
Tlie petition shows that in pursuance of the provisions of chapter 123, Acts of the Sixteenth General Assembly, a tax was duly voted on the taxable property of Cedar Falls township, Black Hawk county, Iowa, on November 22, 1883, in aid of the Wisconsin, Iowa & Nebraska Railway. Company. That on June 0, 1884, a like tax was voted, as provided in chapter 159, Laws of the Twentieth General Assembly, upon the taxable property of Waterloo township in said county, in aid of'said company. That said taxes were due and payable one-half on January 1, 1885, and one-half on January 1} 1886, That certain property-owners
It will be seen that, according to the petition, the defendants’ vote to mortgage the road was prior to the voting of either tax; that the first mortgage was filed for record several months before the second tax was voted, and the second mortgage was filed on the same day the second tax was voted; and that both mortgages were voted by the directors, executed and filed for record long before any of the tax was due or paid.
The first ground of demurrer presents the question whether directors are liable, under the statute, for voting such incumbrances before the tax is voted and received. Section 6, chapter 123, Acts of the Sixteenth General Assembly, under which the first tax was voted, is as follows: “ The board of directors, of any railroad company receiving taxes voted in aid thereof under the provisions of this act, or those members thereof, or either
It is a matter of common knowledge that the construction of railroads in this state was largely aided by subscriptions to the stock of the companies and by voting taxes, and that, by reason of the extent to which the roads were, incumbered after such aid was given, the people realized but little on the stock to which they were entitled. It was to remedy this wrong, and to secure to stockholders the value of their stock, unimpaired by incumbrances in excess of the amounts named, that the sections under which this action is brought were enacted. The liability created by these sections is extraordinary, and, if not penal, is certainly in the nature of a penal liability. It is to all stockholders, whether they become such by subscribing for or ’ purchasing shares or by the payment of. the tax voted in aid of the company. He who became a stockholder by paying the tax is entitled to no greater rights, under these statutes, than one who subscribed for or purchased shares. It would not be contended that directors would be liable for having voted incumbrances in excess of the amount named, to one who purchased stock with notice that the incumbrances had been voted, executed and. recorded. We have seen that the taxpayers of Waterloo township had record notice of the-first mortgage, which
It follows from these conclusions that the demurrer was properly sustained ; and, as this fully disposes of the case, we need not consider the other questions raised and discussed. Aeeiemed.