Hill v. City of Kahoka

• Citation: 35 F. 32
• Parties: HILL v. CITY OF KAHOKA.
• Decision Date: 14 May 1888
• Court: U.S. District Court — Eastern District of Missouri

35 F. 32

HILL v. CITY OF KAHOKA.

United States Circuit Court, E.D. Missouri, Eastern Division.

May 14, 1888

F. T Hughes and Frank Hagerman, for plaintiff.

J. W Howard and Dyer, Lee & Ellis, for defendant.

Action upon certain railroad aid brnds issued by the town of Kahoka. The town was incorporated under the act of February 8, 1871 (2 Wag.St.Mo.p. 1314,) the first section of which, in part is as follows: 'Whenever two-thirds of the inhabitants of any town or village within this state shall present a petition to the county court of the county, setting forth the metes and bounds of their village and commons, and praying that they may be incorporated, and a police established for their local government, and for the preservation and regulation of any commons appertaining to such town or village, and the court shall be satisfied that two-thirds of the taxable inhabitants of such town or village have signed such petition, and that the prayer of the petitioners is reasonable, the county court may declare such town or village incorporated, designating in such order the metes and bounds thereof; and thenceforth the inhabitants within such bounds shall be a body politic and corporate by the name and style of 'The inhabitants of the town of . . . ' (naming it) etc. ' The supreme court of Missouri, in construing this statute, in State v. McReynolds, referred to in the opinion, where over 900 acres of farming lands were included in the towns as incorporated, held that 'the word 'commons' as used in that statute, meant lands included in or belonging to a town, set apart for public use, and that the county court had no power to incorporate therewith a district of farming country adjoining the town or village.'

THAYER J.

This is an action on coupons of certain bonds issued by the town of Kahoka on January 1, 1873. The petition also contains a count upon a judgment against the town recovered April 10, 1877, on other coupons of the same bonds. The town of Kahoka was incorporated by two orders or decrees of the county court of Clark county, Mo., made and entered of record respectively on June 8, 1869, and November 14, 1872, pursuant to chapter 134, Wagner's Revised Statutes of Missouri. Thereafter, both before and long subsequent to the execution of the bonds in suit, the town assumed the exercise of corporate functions. Among other things done in a corporate capacity it elected boards of trustees, levied and collected taxes for municipal purposes, brought and defended suits, and issued the bonds now in question. It was clearly a corporation de facto, if not de jure. In October, 1886, by a quo warranto proceeding brought against the town in the circuit court of Clark county, it was ousted of its franchises (as the information and decree recites) for non-user of the same. Immediately thereafter, on November 1, 1886, the present defendant, the city of Kahoka, embracing substantially the same population and territory as the former town of Kahoka, was incorporated as a city of the fourth class pursuant to existing laws.

Under the circumstances above stated, the present city of Kahoka must be esteemed (so far as corporate creditors are concerned) the legal successor of, and as such liable for all valid indebtedness contracted by, the former town of the same name. Even if a municipal corporation can forfeit its franchises by non-user, such forfeiture will not operate to extinguish debts of the corporation contracted before the forfeiture was incurred or declared. Furthermore, if corporate creditors are not made parties to the proceedings by which the forfeiture is ascertained and declared, they are not bound by the judgment of ouster. Municipal corporations cannot extinguish their debts by changing their names, or reorganizing under new charters, or by failing to exercise their corporate powers. A debt once contracted by a municipal corporation will survive as a debt against whatever corporate entity is subsequently created to take its place and exercise its power of local government over substantially the same people and territory. Broughton v. Pensacola, 93 U.S. 266; ...