60 Tenn. 60 | Tenn. | 1873
delivered the opinion of the Court.
This bill is filed by Winston, and a hundred or more of the taxpayers of Smith County, on behalf of themselves and other taxpayers of said county, to have an order of the County Court of said county declared
Numerous objections are presented to the validity of the proceedings sought to be declared void, which we will notice, as 'far as necessary for the decision of the case in the subsequent part of this opinion.
At present, the question that meets us at the threshold of the discussion is, as to the jurisdiction of the Court of Chancery to entertain the bill, and grant the relief sought. This question is raised by the 17th ground of demurrer, as filed by defendant. It is as follows: “ The Court has no jurisdiction, because there is no law authorizing a contest of such an action in this Court, and the bill on its face shows that the bonds in question have not been called for by the Railroad Company, and fails to show there has been either an issuance of the bonds, or that a tax has been assessed, or effort to levy or assess a tax, to pay the subscription.”
The facts necessary to be stated in order to present this question are, that at the November Term of the
By Art. 2, § 29 of the Constitution of 1834, it is provided: “The General Assembly shall have power to authorize the several counties and incorporated towns in this State to impose taxes for county and corporation
In Mayor and Aldermen of Nashville v. Nichol, 9 Hum., 252, and Louisville & Nashville Railroad Co. v. County Court of Davidson County et als., 1 Sneed, 640, it was adjudged that subscription to a Railroad Company was a county or corporation purpose, and in the latter case, that the question of subscribing for stock in such companies might be submitted to a vote of the people, in accordance with what is known as the Internal Improvement Law of 1852, and the authority given to the county, by the Legislature, to impose such taxes in favor of railroads, be made dependent, for its exercise, on the result of a vote of the citizens for or against the proposition. These questions being settled and assumed as the law, it readily appears that there are elements in such an election not found in the ordinary case of an election to fill an office where two or more citizens submit their claims to the decision of the people. It is not a question simply of who shall fill an office, but a means of ascertaining, and giving expression to, the voice of the people of the county, in assenting to, or dissenting from, a proposed contract into which the corporation, or quasi corporation of which they are members, is to enter, but only on condition of assent by a majority of the votes cast, in accordance with the terms of the authority given in the law under which the action of the people is authorized. In short, we
This being so, in any case where the question of the obligation of a contract of subscription is to be settled, because of want of authority on the part of the county to make it, for want of proper assent on the part of the people of the county, the question of the result of what is, by accommodation in the use of terms, called an election, must necessarily be investigated, not under the idea of contesting an election, but for the purpose of ascertaining whether the contract of subscription made has been authorized according to law, and so binding on the county. In this view of the question it will be seen that it is not a question of contesting an election brought into a Court of Chancery, but the question of the validity and obligation of a contract, which by law is made to depend on the assent of the majority of votes given at the ballot box,’ and as a condition to its being made, and that the result and validity of the election is to be ascertained, in order to determine the question whether a binding contract has been made as to .the corporation or county subscribing or proposing to subscribe for stock in the Railroad Company.
On looking at the case of Louisville & Nashville Railroad Co. v. Davidson County et als., we think this is the principle on which the Court went, and the true
That a subscription by an incorporated town is dependent upon the approbation of the voters of the
It is evident from these sections that the purpose of the Legislature was, not to entrust this matter to the action of the County Court, or 'Justices of the county, the body ordinarily controlling the collection and appropriation of the revenues of the county, but that the people of the county, as a majority, as provided by law, were required to give their approbation to such subscription, and this approval “must first be obtained” before any subscription is authorized, is the precise and definite requirement of the law. Without this, a subscription is a contract wholly unauthorized, and of no validity whatever. In fact, we suppose no one would maintain, that without the forms of an
The nest point of the demurrer is, that the bill shows that the bonds have not been called for by the Railroad Company, nor issuance of them, or attempt to do so, nor has any tax been assessed to pay the subscription. We need not discuss this objection at length, for- we take it to be clear that if the subscription made by the County Judge is unauthorized (as is the theory of the bill), and the contract to pay the bonds to the company for its stock, invalid, then the parties to be affected by such contract need not wait until payment on the contract is actually sought by the company, or till the bonds are issued to the company, or until the money to pay the interest or the principal shall be attempted to be collected by levy of a tax for the purpose. If the subscription contract to pay in bonds for the stock is not binding, then that question can be as well tested before issu-anee of bonds or application for them, or levy of tax, as afterwards, and there is much reason in favor of having the preliminary question settled before any fur
It is insisted, however, that complainants are not entitled to file this bill, because, as Ave understand the argument, AAdien the subscription was made by the County Judge, there was a contract between Smith County and the company, and that the taxpayer could only become a stockholder in the company after he has paid his tax assessed against him, and received a certificate of a share of the stock. Conceding the fact to be as stated, does it follow that the complainants, as taxpayers, have no right to come and ask that the contract entered into by the County Judge, binding the county for the payment of the $300,000, shall be declared void, as made without authority. Let us look at this question for a moment. It goes on the theory that the taxpayers are not stockholders in the Railroad Corporation, but that the county, by virtue of the subscription, is, and that the taxpayer, therefore, is not a party to the contract, and therefore can not seek to set it aside. But it must be remembered that Avhile he is not a holder of stock in the Railroad Corporation as yet, he is having a liability fixed on him by virtue of the assumed subscription of the county, by which he may be compelled to pay his money, and be made a stockholder to that extent, or
In the case of Wood v. Draper, 24 Barbour R., 187, the principle' is thus stated in the syllabus of the case: “ The Court will grant its aid to restrain, by injunction, the imposition of any tax or burthen on the taxpayers of a city contrary to law, on a complaint
We might cite numerous other authorities in support of the propositions laid down, but we think the above sufficient, as the principle meets the approval of our judgment as sound, and in accordance with the well settled relations of both the county and the city. The corporation, as such, so far as it uses the funds or means gathered from the taxpayer, is a trustee, to a certain extent at least, using these funds, or collecting them for purposes authorized by law, and having only authority so to use them, or collect them for such use, as such trustee ought not to be allowed to misapply such funds to an unauthorized purpose, or to create an unauthorized liability upon the individual corporator, so to speak, and when such liability is sought to be created, if it is charged to be beyond the power of the corporation, and this charge can be made good by proof,
It is argued, however, by .counsel of the company, that the county is a public corporation, and may contract for county purposes, and subscribing for railroad stock is a county purpose, and when the subscription was made it was a contract between the county and the company, which, as we understand the argument, thereby became binding on the county. We need only say to this argument, that by the Constitution the Legislature is empowered to authorize the counties and incorporated towns of the State to levy taxes for county and corporation purposes, but when such authority is given, the county acts under the power conferred by the law, and if an election is required, or other prerequisite, on which the taxes shall be imposed or the liability incurred, then the law must be pursued, and the power exercised in accordance with the statute. In so far as the county shall act beyond and outside of the authority conferred, in any matqrial requirement, it acts without any authority at all in a case like the present. The Legislature chose to make the right to make this contract 'dependent on the result of an election, to be held as prescribed, and by this requirement the county, as well as the company, are bound. ifo contract for subscription to a railroad can be valid without such authority, as the law stood at the time this was made.
This brings us to a consideration of some of the
Applying these principles to this statute, it is seen that the language cannot fairly be construed as directory to the County Court, but is imperative necessarily. It forbids the application to be made, or rather prescribed, (as a condition of law on which it can be made) until the survey of the entire line has been done, and the other requirements complied with. Its language is, before such application can be made the entire line of the road shall be surveyed. If this is not done, then by the plain terms of the statute the application cannot, according to the law, be made to the County Court to order an election. If. these requirements of the statute can be dispensed with, then the enactment is inoperative practically, the will of the Legislature is disregarded, and the law remains as it was before the passage of the act of 1853-4, and is thus nullified by Judicial construction. We do not think we are authorized to thus disregard the plain requirements of. a statute of the State, but on the contrary feel it to be our duty to enforce the
These views, atc think, are well sustained by authorities, as well as the plain language of the Statute. In the case of Marsh v. Fulton Co., 10 Wallace, 682, the question of the validity of a county subscription was before the Supreme Court of the United States. A vote had been ordered to ascertain whether a majority of the voters of the county approved the subscription proposed, in tAVO railroads, one the Mississippi & Wabash Railroad Co., the other the Petersburg and Springfield Co. The former road was then a continuous line running entirely across the State. An amendment Avas made to the charter, after the vote, Avhich was in favor of subscription, by which the line of road was divided into three divisions, and it had been held that this act created three different corporations, so that the central division, or company, was reduced to a line of about two hundred and thirty miles. On the question of enforcement of the bonds, which had been issued, the Court, Judge Field delivering the opinion, go upon the theory that no contract could be made to bind the county, except as authorized by the law, and that the authority given by the law must be
On turning to the charter of the Tennessee & Pacific Railroad Co., and amendments to same, we find by Sec. 25 of Act of 1866 — 7, that the counties and incorporated towns through or contiguous to which the road may be located, are empowered to subscribe for stock, upon a vote of the citizens, to be taken in the manner heretofore provided by law in such cases. By Sec. 11 of the original Act, it will be seen that the company was to be organized, and were em
We now proceed to inquire from the proof whether this requirement of the law has been complied with. 'We find the petition of the President and Directors of the Company, or in their names signed by George Maney, as President, and probably drawn by him, and presented to the County Court of Smith County, at the November Term, 1869, asking that body to order the election. In this it is stated that the company have completed their survey of the entire line from Nashville to Knoxville by a competent engineer, and substantially located the same, by designating the termini and approximating the general direction of their said road, and have caused said engineer to make an estimate of the probable cost of the grading; embankment and masonry, and other expenses for the construction of said road, all of which has been done under oath by said engineer, together with a special report of the survey through Smith County, a copy of which, with his affidavit attached, is filed as Exhibit A, and made part of the petition. On looking at Exhibit A, however, we find that it only contains a description of the route from perhaps the town of Lebanon to the house of A. Lewis, 46f miles from Lebanon, and 75 miles from Nashville, the beginning point of the route of the road, as it has been built. The estimates of cost are only from Lebanon to Car
"We may add,- in support of the general view we have given on the construction of this requirement of the Code, and as illustrative of the 'argument, that if the County Court had refused to order the election upon the facts shown in the report of the engineer, as filed by the petitioner, with the application for the order of an election, and a mandamus had been filed by the company to compel them to do so, it could scarcely be doubted that the company would have failed in such suit. The answer would have been, that the statute says, in plain terms, that before such application shall be made, the entire line of the road must be surveyed, not simply the line through our county, and the estimates of costs made, and this must bo filed with your application for this order. Until this is done, we have no authority by law to make such an order as you ask. Such a defence would unquestionably have been successful. How then can the act of ordering the election be sustained, as authorized to be done, after it has been done? or on what better basis can it stand now than it would have stood before the Court, when the application for such order was made. If the Court could not have made such an order' upon the facts presented, for want of authority
Numerous other questions have been presented and debated.