City of Aurora v. West

• Decision Date: 26 May 1857
• Citation: 9 Ind. 71
• Parties: The City of Aurora v. West and Another
• Court: Indiana Supreme Court

9 Ind. 71

The City of Aurora v. West and Another

Supreme Court of Indiana

May 26, 1857

From the Dearborn Circuit Court.

The judgment is affirmed, with 2 per cent. damages and costs.

William S. Holman and John D. Haynes, for appellant.

Philip L. Spooner and Abram Brower, for appellees.

Perkins J. Staurt, J., dissented.

OPINION

Perkins J.

Suit against the city of Aurora. Demurrer to the complaint overruled. Answer. Demurrer to the answer overruled. Reply. Demurrer to the reply overruled. Judgment for the plaintiff. Exceptions were taken to the overruling of the demurrers.

The case is as follows:

The city of Aurora was incorporated by an act of the General Assembly of Indiana, entitled "An act granting to the citizens of the town of Aurora, in the county of Dearborn, a city charter," approved February 14, 1848, the eighteenth section of which, being the provision of the act having immediate reference to the question at issue, is as follows:

"Sec 18. The said city council, whenever a majority of the qualified voters of said city require it, shall have power, and they are hereby authorized to take stock in any chartered company for making roads to said city, or for watering or lighting said city: Provided, That no such stock shall be subscribed on the part of the city, until a majority of the qualified voters thereof have signified their assent thereto, that they are in favor of the subscription for such stock by the city council; and to raise funds for the payment of such stock, the bonds, under seal of said corporation, payable in such manner and at such time as they may deem proper and expedient, and bearing interest at six per centum per annum, payable annually, and therein pledge to the holders of such bonds that the stock so taken, with all the dividends thereon accruing, shall be held and firmly bound for the payment of the said bonds and accruing interest on the same, and the interest coupons attached to said bonds, shall be received at all times when due, for the payment of all taxes due to said city, the amount of stock subscribed in any one chartered company not to exceed 50,000 dollars."

In September, 1850, the city council of the city of Aurora, subscribed for 50,000 dollars of the capital stock of the Ohio and Mississippi Railroad Company, and in payment of that subscription issued the bonds of the city to the amount of 50,000 dollars, the interest on which was payable on the first day of January, annually.

The bonds were issued on the first day of January, 1852, being under the new constitution. When the railroad was located through the city of Aurora, does not clearly appear. The bonds were assigned to West and Torrence--the interest was not paid when due, and this suit was brought to recover the amount.

The suit, as we have seen, was successful below. The city appeals, and claims that the judgment of the Circuit Court should be reversed. It is insisted that the bonds of the city are void. Counsel argue thus:

"1. That the city council of Aurora was only authorized to 'take stock' in a 'chartered company for making roads to said city'; that the Ohio and Mississippi Railroad Company was not designed for any such purpose, but with views and objects foreign to such purpose, and that, therefore, as a necessary consequence, the subscription made by the city council to the capital stock of that company was unauthorized and void.

"2. That as the city of Aurora was not, by the act incorporating the railroad company, a point on the line of the contemplated railroad, and the road not being located to or through the city of Aurora at the time of the subscription, the same was unauthorized and void, even if it would have been valid, if either of the states of things had existed at the time of the subscription; and that any act predicated on that void subscription was a nullity.

"3. That the term 'road,' as used in the city charter, must be taken in its general sense, as synonymous with 'highway'--'public thoroughfare'--and not as a private enterprise, gotten up for private purposes--in its very nature a monopoly, such as must be the case with every railroad; and,

"4. That the state can not confer on corporations designed simply for the purposes of local municipal government the powers sought in this instance to be exercised by, and enforced against, the city of Aurora, to incur heavy liabilities by subscribing to the capital stock of companies having general--even national--and not merely local purposes in view. We insist that the power never did exist; and that if it ever did, the spirit of the present constitution is in direct hostility to it, and that the bonds issued in 1852 were issued without authority."

The provision as to the route of the Ohio and Mississippi Railroad, in the charter of the company, was--

"Sec. 13. That the president and directors of said company shall be, and they are hereby, invested with all the rights and powers necessary and proper for the survey, location, construction and repairing of a railroad, on the most direct and practicable route between Lawrenceburgh on the Ohio river, and Vincennes on the Wabash river, having in view the interest of the company, and the convenience of the citizens of the state of Indiana, and to extend eastwardly on the like most direct and practicable route to the city of Cincinnati, in the state of Ohio; and to extend westwardly on the like most direct and practicable route through the state of Illinois to the city of St. Louis, in the state of Missouri."

We shall not, in examining the case, follow the order pursued by counsel in their argument. We will first consider the last position assumed by them. It involves the important question in the cause.

The internal improvement of a state by means of roads and canals, has always been a legitimate subject to call into exercise the legislative power of the state. It has been, and still is, thus in Indiana. Under the old constitution, such improvements could be carried on by means of loans, creating a state debt. Under the new, they can not be carried on by that particular means by the state, but must be paid for by taxes raised as the works progress. This is an express limitation on the exercise of the power by the state, inserted in the constitution. The same limitation is imposed upon the exercise of a like power by the counties of the state. Section 6, of article 10, reads:

"No county shall subscribe for stock in any incorporated company, unless the same be paid for at the time of such subscription; nor shall any county loan its credit to any incorporated company, nor borrow money for the purpose of taking stock in any such company; nor shall the General Assembly ever, on behalf of the state, assume the debts of any county, city, town, or township, nor of any corporation whatever."

This section, by implication, concedes the power to counties to take stock, at all events by permission of the legislature, in companies chartered to construct works of internal improvement--under the new constitution by making cash payment at the time, under the old, as we have seen, without--and it does not impose any limitation upon the power of cities touching the matter, while it shows that the subject of their taking stock in such companies, must have been before the constitutional convention.

The provisions in the new constitution, then, on the question under consideration, amount to this: they admit the power of the state to construct works of internal improvement, but forbid her, in her state capacity, to create a debt for the purpose. They grant that the power may be conferred upon counties to take stock in companies chartered to construct such works, but require simultaneous payment. They do not prohibit the conferring of the power to take stock upon cities, either by means of cash or credit, or of otherwise aiding these undertakings; but they prohibit the state from assuming any debts cities may contract.

The implication, from these provisions, in regard to cities, if there be any, is in favor of their power to take stock. At all events, if they ever possessed the power, that power is left unimpaired. The convention did not consider that, an inhibition upon the state to construct internal improvements, in her capacity as such, by means of loans, prohibited her from authorizing other agencies to construct them by such means; hence, they proceeded to impose the restriction, as to counties, but did not extend it to cities, though naming them in the same section. The maxim, therefore, that the expression of one excludes the other, must apply.

Suppose the constitution said that the state should not, by means of her own officers and funds, construct railroads, would the provision be construed to prohibit the state from chartering companies for that purpose? It would rather imply that they were to be constructed by such agencies; for an intention to entirely arrest the improvement of the state could not be presumed.

If, then, cities, under the old constitution, or, it would seem, under, perhaps any constitution, could be invested by the legislature with the power of aiding works of internal improvement, they still can be invested with such power.

The question, therefore, presents itself, can such power be given to a city? Of the policy of conferring it, we have said all that it becomes us to say, in City of Lafayette v Cox, 5 Ind. 38, to which we refer. Of the capacity to confer it, we have not heretofore expressed an opinion. That is now the question. We have seen that no express constitutional provision stands in the way of granting such power to a city, as we hold that the prohibition in the constitution upon the legislature to create a state debt, does not prohibit that...