Adams v. Jackson Electric Ry., Light & Power Co.

• Decision Date: 25 March 1901
• Citation: Adams v. Jackson Electric Ry., Light & Power Co., 78 Miss. 887, 30 So. 58 (Miss. 1901)
• Court: Mississippi Supreme Court
• Parties: WIRT ADAMS, STATE REVENUE AGENT, v. JACKSON ELECTRIC RAILWAY, LIGHT AND POWER COMPANY

30 So. 58

78 Miss. 887

WIRT ADAMS, STATE REVENUE AGENT, v. JACKSON ELECTRIC RAILWAY, LIGHT AND POWER COMPANY

Supreme Court of Mississippi

March 25, 1901

FROM the circuit court, first district, of Hinds county. HON ROBERT POWELL, Judge.

Adams state revenue agent, appellant, was the plaintiff, and the Jackson Electric Railway, etc., Co., appellee, was defendant in the court below. The facts are these: In 1897 the city of Jackson granted to a company, designated as "The Jackson Railroad & Light Company," of which one McKisson was the moving spirit, certain franchises looking to the construction of an electric light plant and street railroad system in the city, and the parties promoting the enterprise bound themselves to perform certain obligations, and in case of failure, to forfeit to the city $ 1,500, which was placed in the hands of a custodian--the then mayor of the city--to await results. The city became entitled to the money under the terms of the contract, but allowed it thereafter to remain in the custodian's hands. At this juncture the appellee, the Jackson Electric Railway, Light & Power Company, appeared on the scene, and sought for and obtained from the city practically the same franchises which had been forfeited by the former company and placed itself under substantially the same obligations to the city. The latter company having completed its light and railroad plants, the city authorities, recognizing its claim to be the assignee of the former company, passed an ordinance directing the custodian of the $ 1,500 to pay it over to appellee, and this was done. The state revenue agent, conceiving that the appropriation to the appellee was unlawful, began this suit for the use of the city, as authorized by laws 1894, p. 29 setting out the facts in his declaration. The defendant appellee, demurred to the declaration, contending that it did not show a cause of action and that the revenue agent was without authority to sue. The court below sustained the demurrer and dismissed the suit, and the revenue agent appealed to the supreme court.

Judgment reversed, demurrer overruled and remanded.

Harper & Potter, for appellant.

Was the appropriation forbidden by the provisions of section 183 of the constitution, and, if so, has the state revenue agent a right to sue and recover the funds so illegally and unconstitutionally diverted and misappropriated? We concede fully the doctrine established by the case of Adams v. Railroad Co., 76 Miss. 714, counted on by appellee, that certain property, rights may be acquired and so vested in a county or municipality, when acquired in a private capacity, as that the legislature cannot divest or control the same, in so far as such property rights, like the property rights of private corporations or citizens, are protected by the constitution of the state and of the United States. Subject to such limitations, the overwhelming weight of authority in America is that the state may create, control or destroy these local governmental agencies when and as it sees fit. The extreme doctrine announced by way of dicta in the opinions in the cases of People v. Hurlburt, 24 Mich. 44, and Atkins v. Randolph, 31 Vt. 226, have received little or no sanction in the courts of this country. This court distinctly repudiates any such view, and limits the rights of such public corporations against state interference to vested property rights acquired in their private capacity, in the very case relied on by appellee, Adams v. Railroad Co., supra.

We are aware that in an early decision in Mississippi, it was held that the provision of a charter, giving a municipality the sole power to grant liquor licenses and to appropriate the money arising therefrom to city purposes, created a vested interest in the funds derived from the exercise of the franchise, which could not be divested so long as the franchise exists, although the legislature has power to destroy the franchise itself. This decision thus undertakes to distinguish between the right of the legislature to deal with the franchise and its right to deal with the funds arising from and out of such franchise. But this distinction is repudiated by all the cases elsewhere, and especially by this court in the case of State Board v. Aberdeen, 56 Miss. 518. In that case this court distinctly announces the doctrine that the right of the legislature to deal with the funds arising from the exercise of the franchise, is as broad as its right to deal with the franchise itself, and it was held that the state had plenary power over such liquor license funds, and could divert them to other purposes than those provided in the charter, as it saw fit. The court in that case uses this language: "These municipal bodies had no vested right, either to grant licenses, or to money received from them by virtue of their charters of incorporation, which the legislature could not resume." It is expressly conceded by counsel in their brief in the case of Adams v. Railroad Co., 76 Miss. 717, that the application of the doctrine in that case was error. Then, if the legislature has full authority and power to direct the control of the streets of a city because they are held in trust for all of the people of the state, and not for a locality, it has full power and authority to direct and control the funds derived directly or indirectly from the use, management and authority over such streets. Hence, it is clear that if such funds be diverted to improper channels, the legislature has full power to appoint an agent to recover such funds and restore them to the public to whom they belong; and this power the legislature has distinctly and fully granted to its revenue agent, in the act heretofore recited. And this is especially true of the streets of the city of Jackson, since they are held by special and express grant from the legislature, to the state of Mississippi, in trust not alone for the benefit of the people of Jackson, but of all the people of the state, since the land on which the city is built was granted and is held in trust for a capital city for all the people of the state.

But in this case it is a matter of no concern whether the fund in question is held by the city of Jackson in its public or private capacity. Certain it is that when the money was declared forfeited by the mayor and board of aldermen of the city, and the McKisson concern did not resist but acquiesced therein, it immediately became a fund belonging to the city of Jackson, and should have been promptly paid into the treasury, and the only way that it could have been legally drawn thereafter, was by an act of appropriation.

Now the state, in pursuance of a broad and comprehensive public policy, has...