Katzenberger v. City of Aberdeen

• Decision Date: 04 April 1887
• Parties: KATZENBERGER and others, Partners, etc., v. CITY OF ABERDEEN. 1
• Court: U.S. Supreme Court

121 U.S. 172

7 S.Ct. 947

30 L.Ed. 911

KATZENBERGER and others, Partners, etc., v. CITY OF ABERDEEN.¹

April 4, 1887.

Calvin Perkins, for plaintiff in error.

E. O. Sykes and Baxter McFarlan, for defendant in error.

WAITE, C. J.

This is a suit brought against the city of Aberdeen, on the fourteenth of September, 1882, to recover the interest from May 1, 1874, to May 1, 1882, on 156 bonds of the city issued to the Memphis, Holly Springs, Okolona & Selma Railroad Company, under date of April 26, 1870. The alleged authority for the issue of the bonds is an amendment to the charter of the city, in November, 1858, as follows:

'Section 1. Be it enacted by the legislature of the state of Mississippi, that the mayor and selectmen of the city of Aberdeen be, and they are hereby, empowered to contract with the New Orleans, Jackson & Great Northern Railroad Company, or with any other railroad company, and to subscribe in the name and for the use of the city of Aberdeen as many shares of the capital stock of said company, and upon such terms and conditions as they may stipulate and agree upon, as they shall deem expedient, not exceeding in amount the sum of $100,000.

'Sec. 2. Be it further enacted, that the mayor and selectmen of said city of Aberdeen are hereby empowered to levy and collect a tax on all the property within the corporate limits of said city, subject at the time to state or county tax, and upon the annual gross incomes of all persons or corporations residing or doing business in the corporate limits of said city, to be applied to the payment of the aforesaid subscription of stock as provided in the first section of this act: provided that, before such tax shall be levied, the same shall be approved by a majority of the legal voters of said city, to be ascertained by an election held as other elections in said city.

'Sec. 3. Be it further enacted, that the said tax shall be levied and collected as other taxes of said city, and the tax collector is hereby required to execute a bond, with good security, to be approved by the said mayor and selectmen, conditioned for faithful performance of his duties as such collector, and that he will pay over the moneys collected as directed by the said mayor and selectmen. And such tax collector shall receive for his services one per centum on the amount collected, and no more.

'Sec. 4. Be it further enacted, that the gross amount of the annual income of each and every person and corporation residing or doing business within the corporate limits of said city shall be ascertained by the said tax collector, who, for such purposes, is authorized and required to administer an oath to each person, or his agent, or the proper officer of a corporation, as [to] the amount of his, her, or their annual income and any person willfully swearing falsely as to the amount of such income shall be deemed guilty of perjury, and upon conviction thereof shall be punished as in other cases of perjury.

'Sec. 5. Be it further enacted, that this act shall take effect from and afe r its passage.'

On the twenty-sixth of April, 1870, the mayor and selectmen of the city passed the following ordinance:

'Section 1. Be it ordained by the mayor and selectmen of the city of Aberdeen, in council assembled, that the city of Aberdeen do hereby subscribe to the capital stock of the Memphis, Holly Springs, Okolona & Selma Railroad Company the sum of one hundred thousand dollars, to be paid in bonds of the said city of Aberdeen, each of the denomination of five hundred dollars, ($500,) maturing twenty years from the first day of May, A. D. 1870, bearing eight per cent. interest per annum, payable semi-annually, on the first days of May and November of each year, said bonds to be signed by the mayor of the city of Aberdeen, and countersigned by the treasurer thereof, with the corporate seal of said city affixed.

'Sec. 2. Be it further ordained, that the bonds issued in pursuance of section first of this ordinance have interest coupons attached, signed by the treasurer of said city of Aberdeen, or with his signature lithographed thereto.

'Sec. 3. Be it further ordained, that the form of the bonds of the city of Okolona issued to said railroad company be adopted as the form of the bonds issued to said railroad company by the city of Aberdeen, issued in pursuance of the foregoing ordinances, and that the city attorney be instructed to prepare immediately a form for said bonds, and have the same lithographed.

'Sec. 4. Be it further ordained, that this subscription is upon condition that said Memphis, Holly Springs, Okolona & Selma Railroad shall pass through the city of Aberdeen, Mississippi, and the amount of said subscription be expended in constructing said railroad in and through the county of Monroe, in said state.

'Sec. 5. Be it further ordained, that as soon as said bonds are lithographed and signed, as herein directed, the mayor of said city shall hand the same over to the Memphis, Holly Springs, Okolona & Selma Railroad Company, and receive therefor the certificate of stock of said company.'

Pursuant to this ordinance the stock was subscribed and bonds issued. The bonds were in the usual form of negotiable coupon bonds, and contained the following recital: 'This bond is issued under and pursuant to the constitution and laws of the state of Mississippi, the charter of the city of Aberdeen, and ordinances passed by the mayor and selectmen of the city of Aberdeen on the twenty-sixth of April, A. D. 1870.'

The declaration states, in substance, the agreement for a subscription, as set forth in the ordinance, to be paid in bonds; the issue of bonds in accordance with this agreement; the purchase by the plaintiffs in March, 1874, of those the interest upon which is sued for, except that the 'seven coupons first maturing had at the time of such purchase been detached and paid and were not purchased;' and that none of the coupons for interest had been paid since. There is no averment that the levy of a tax to pay the subscription had ever been approved by the legal voters of the city. A demurrer to the declaration was sustained by the court below, and a judgment rendered thereon in favor of the city. To reverse that judgment this writ of error was brought.

In our opinion upon the facts stated in the declaration, the city had no authority to issue the bonds. The amendment of the charter, taken as a whole, shows clearly that the legislature did not intend to allow the city authorities to make a subscription which would bind the tax-payers for its payment by the levy of a tax, until the legal voters had approved of such a tax by a majority vote at an election held as other elections were held. As was said in Wells v. Supervisors, 102 U. S. 630, the...