Com. v. Inhabitants of Williamstown
| Decision Date | 26 February 1892 |
| Citation | 156 Mass. 70,30 N.E. 472 |
| Parties | COMMONWEALTH v. TOWN OF WILLIAMSTOWN. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
H.C. Bliss, for the Commonwealth.
Gaston & Whitney and Joseph Bennett, for defendant.
By St.1855, c. 394, the town of Williamstown and each of 14 other towns were authorized to subscribe for shares in the capital stock of the Troy & Greenfield Railroad Company, to a certain amount, and under certain conditions, and to raise by loans or taxes any sums of money which should be required to pay the installments on their respective subscriptions. The legislature prescribed no terms or method to be observed in raising the money by loans, and therefore the towns might adopt any method that was usual. Meyer v. Muscatine, 1 Wall. 384; Seybert v. Pittsburg, Id. 272; Rogers v. Burlington, 3 Wall. 654, 666; Police Jury v. Britton, 15 Wall. 566, 572; Com. v Alleghany Co., 37 Pa.St. 241; Com. v Pittsburgh, 41 Pa.St. 278. Moreover, it was expressly provided in Rev.St. c. 15, § 11, that "towns shall have power to make any contracts which may be necessary and convenient for the exercise of their corporate powers." It is well known that as early as 1855, when money was to be raised on loan, in considerable amounts, either by the commonwealth itself or by cities and towns or by railroad corporations, a common method of doing it was by means of bonds, then usually called "scrip" or "certificates of debt," which were to be negotiated in the market. This is not only a matter of general knowledge, but it is shown by numerous statutes in which the issue of such scrip was specially authorized or recognized, and also by cases in the books. This is so familiar that we will merely cite illustrative instances. St.1837, cc. 172, 190; 1838, cc. 9, 125, 193; 1839, cc. 74, 145; 1841, c. 131; 1844, c. 33; 1846, c. 251; 1849, cc. 189, 191; 1850, cc. 175, 233; 1851, cc. 60, 341; 1852, cc. 76, 244, 310; 1853, c. 422; 1854, cc. 134, 226, 338, 351, 354, 423; 1855, cc. 14, 19, 24, 61, 179, 368, 395, 435, 456; Chapin v. Railroad, 8 Gray, 575; Edwards v. Marcy, 2 Allen, 486; Haven v. Adams, 4 Allen, 80; White v. Railroad Co., 21 How. 575. Statistics show that in 1855 railroad corporations in Massachusetts had issued bonds to the amount of over $15,000,000, some of which had been specially authorized and some not. The Statutes of 1846, c. 251, and 1849, c. 191, required railroad corporations to make returns concerning their funded debts. The Statutes of 1852, c. 76, made all corporate bonds payable to bearer or order negotiable. The Statutes of 1854, c. 286, by a general law prescribed the terms and conditions upon which railroad bonds might thenceforth be issued. Previously to that the power of a railroad corporation to issue bonds was unrestricted. Com. v. Smith, 10 Allen, 448. We can have no doubt, therefore, that in this commonwealth the power given to these towns to raise these large or unusual sums of money by loan, no conditions or restrictions being imposed, carried with it the power to issue bonds,--a method which certainly enabled the towns to seek the best markets. It is indeed laid down as a sound doctrine of general application in 1 Dill.Mun.Corp. (4th Ed.) 192, that "express power to borrow money, perhaps in all cases, but especially if conferred to effect objects for which large or unusual sums are required,--as, for example, subscriptions to aid railways and other public improvements,--will ordinarily be taken, if there be nothing in the legislation to negative the inference, to include the power (the same as if conferred upon a corporation organized for pecuniary profit) to issue negotiable paper with all the incidents of negotiability." Many decisions are cited in support of this statement, but the recent decision in Merrill v. Town of Monticello, 138 U.S. 673, 11 S.Ct. 441, is to the contrary. However it may be elsewhere, our decision rests upon the usage and the general course of legislation in this commonwealth.
It is contended by the defendant that, even if the town had power to borrow money and issue the bonds therefor, the issue was irregular and invalid, because the bonds were delivered directly to the officers of the railroad company in exchange for the stock for which the town had subscribed, instead of being sold for money. The bonds appear to have been taken at par, and there has been no proof...
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