Menasha Woodenware Co. v. Town of Winter

• Decision Date: 12 January 1915
• Citation: 150 N.W. 526,159 Wis. 437
• Parties: MENASHA WOODENWARE CO. ET AL. v. TOWN OF WINTER ET AL.
• Court: Wisconsin Supreme Court

159 Wis. 437

150 N.W. 526

MENASHA WOODENWARE CO. ET AL.

v.TOWN OF WINTER ET AL.

Supreme Court of Wisconsin.

Jan. 12, 1915.

Appeal from Circuit Court, Sawyer County; James Wickham, Judge.

Suit by the Menasha Woodenware Company and others against the Town of Winter and others. From the judgment rendered, defendants appeal. Affirmed in part and reversed in part.

This is an action by nonresident taxpayers of the town of Winter against the town, the officers of such town, and the First National Bank of Rice Lake, as owner of certain town orders, to declare void certain specified orders issued for the erection of a system of waterworks in the unincorporated village of Winter, located in said town; certain specified town orders issued for the building and repair of highways in said town; and also certain specified orders issued for various other purposes stated in the opinion. The validity of the town orders issued for the erection of the waterworks system and the bulk of the highway orders depends upon whether or not the town of Winter since 1910 has had the authority to exercise the powers of a town containing a population of 500 or more. The United States census for 1910 showed that the town of Winter had a population of 516, and at the annual town meeting for 1911 the electors thereof passed a resolution pursuant to the provisions of subdivision 13 of section 776, Stats. 1911, purporting to give the town board of said town all the powers relating to villages conferred upon them by chapter 40 of the statutes. They also voted a tax levy of $6,000 for a waterworks system for the unincorporated village of Winter, and the next year they voted an additional $5,000 for the same purpose. These taxes were paid by the plaintiffs without objection. At the annual town meeting in 1913 the electors voted to levy an additional tax of $3,000 for waterworks purposes, and a levy of $3,000 for highway purposes. The supervisors of the town voted an additional levy of $3,000 for highways. Section 1240, Stats. 1911, provides that:

“No town containing less than 500 inhabitants shall levy or collect in any year a highway tax of more than two thousand dollars, including the amount voted by any town meeting and the amount levied by the supervisors.”

The circuit court found that at no time during or since 1910 did the town of Winter have a population of 500 or more, that its population at no time exceeded 452 counting those who lived in the territory set off in 1911 to the town of Draper, and it held the orders issued for the waterworks void, and all orders in excess of $2,000 for highway purposes were also held void. A large number of other orders depending upon individual irregularities or want of authority were also set aside. Defendants have taken no exceptions to many of the court's findings and rulings, so these will not be set out in extenso. Only such as are questioned by the appeal will be noticed, and to avoid duplication of statement of facts none will be given here as to individual orders, as such facts would have to be restated more or less in the opinion. The plaintiffs' action affects only orders issued against the levy of 1913. The validity of prior levies is not questioned.

James Robbins, of Rice Lake, and W. F. Bailey, of Hayward, for appellants.

J. C. Davis, of Hayward (L. M. Sturdevant, of Eau Claire, of counsel), for respondents.

VINJE, J. (after stating the facts as above).

[1] 1. The right of the plaintiffs to maintain the action is challenged on the ground that they are not residents of the town of Winter. Not being residents of the town, it is argued, they are not members of the corporation and have no standing in court to question its acts. The following Wisconsin cases are cited to show that such actions have always been brought by resident taxpayers: Peck v. School Dist., 21 Wis. 516;Whiting v. Sheboygan & Fond du Lac Ry. Co., 25 Wis. 169, 3 Am. Rep. 30;Judd v. Town of Fox Lake, 28 Wis. 583;Lynch v. Eastern Ry. Co., 57 Wis. 430, 15 N. W. 743, 825;Willard v. Comstock, 58 Wis. 565, 17 N. W. 401, 46 Am. Rep. 657;Frederick v. Douglas County, 96 Wis. 411, 71 N. W. 798;Webster v. Douglas County, 102 Wis. 181, 77 N. W. 885, 78 N. W. 451, 72 Am. St. Rep. 870;Jenkins v. Bradley, 104 Wis. 541, 80 N. W. 1025;Mueller v. Eau Claire County, 108 Wis. 304, 84 N. W. 430;Carpenter v. Cristianson, 120 Wis. 558, 98 N. W. 517;Chippewa Bridge Co. v. Durand, 122 Wis. 85, 99 N. W. 603, 106 Am. St. Rep. 931;Harley v. Lindeman, 129 Wis. 514, 109 N. W. 570;Wilcox v. Porth, 154 Wis. 422, 143 N. W. 165. And extracts from opinions therein showing that emphasis is laid upon the fact that plaintiffs are resident taxpayers, and therefore damaged by any misuse of corporate funds, are quoted in aid of the contention that none but resident taxpayers can maintain the action. Counsel for plaintiffs claim this objection was first raised by a demurrer ore tenus, and cite a number of cases to show that it must be taken by special demurrer or answer. Counsel are mistaken in saying the objection arose upon a demurrer ore tenus. The answer alleges that:

“None of the plaintiffs in this action are residents of the town of Winter, nor have their office in said town, nor is such their principal place of business, and hence they are not members of the public corporation, the town of Winter, and have not the capacity to maintain this action.”

The question is therefore properly raised. It is a matter of some surprise that no action out of the many such brought in this state has been begun by nonresident taxpayers--especially in view of the fact that in large areas in the northern part of this state nonresident taxpayers pay half or more of the taxes. In the present case it is alleged and not denied that plaintiffs pay three-fourths of the taxes of the town of Winter. Further than as a matter of surprise, the fact can have no special significance upon the question of the right of plaintiffs to maintain the action. Neither is it particularly significant that in the actions referred to by counsel for defendants the court has used language appropriate to the facts therein and referred to plaintiffs as resident taxpayers or as members of the corporation--such being the fact. The vital question is: What wrong calls for a remedy in such cases? If it be a wrong peculiar to resident taxpayers or to members of the corporation only, then nonresidence might establish a line of demarcation. But such is not the fact. The wrong consists in the misuse of the taxpayers' money. And it affects resident and nonresident taxpayers equally. It is an ancient maxim of the law that “an action is not given to one who is not injured.” 1 C. J. 915. The converse of the proposition is a maxim of equal early origin. An action is given to every one who is injured. Our Constitution says:

“Every person is entitled to a certain remedy in the laws for all injuries or wrongs which he may receive in his person, property or character.” Article 1, § 9.

It requires no argument to demonstrate that taxpayers who pay three-fourths of the taxes of the town are injured by an unlawful expenditure of such taxes, no matter where such taxpayers live. It is the ownership of property subject to taxation within the town, and not their residence, that determines their obligation to contribute to the lawful expenses of the town. And when the fund so contributed, which belongs to all the taxpayers, is wasted, it affects resident and nonresident taxpayers alike. As was said in a similar case:

“It is the private interest of the taxpayer, after all, that enables him to set judicial machinery in motion in a suit of this sort.” Chippewa Bridge Co. v. Durand, 122 Wis. 85, 107, 99 N. W. 603, 611 (106 Am. St. Rep. 931).

[2] The plaintiffs, therefore, have a sufficient interest in the subject-matter of the action to institute and maintain it. Having once been properly instituted, since it is brought in behalf of all the taxpayers of the town, the original plaintiffs might drop out entirely and still the action could proceed. The judgment recovered is for the benefit of all the taxpayers, not for the plaintiffs alone.

[3] 2. The objection that the plaintiffs have an adequate remedy at law by paying the tax under protest and suing for its recovery, or by an equitable action to remove the cloud upon the title of their property created by the illegal tax, is not grounded upon a substantial basis. This case is well adapted for illustrating the fallacy of the claim. If the payment of the orders is not enjoined, they will be paid out of the taxpayers' money. If plaintiffs recovered their share of the illegal tax or three-fourths, a deficit to that extent would be created which would have to be levied upon the taxable property of the town, and the plaintiffs would have to pay three-fourths of such deficit, so in the end they would have to pay nine-sixteenths of the illegal tax even if they recovered their first payment. Taxpayers are entitled to complete immunity from an illegal tax where they seasonably bring their action. The result in case of an action to remove a cloud upon the title of their property would likewise be only a partial remedy. If they refused to pay the tax and succeeded in having their property escape the first tax levied against it, a similar deficit would occur which would have to be made up by a tax levied upon all the taxable property of the town. Only by enjoining the payment of an illegal order can complete immunity be had against the illegality.

[4] The fact that such a deficit was created by a misappropriation of funds would be no defense against a tax to repair such waste. Willard v. Comstock, 58 Wis. 565, 571, 572, 17 N. W. 401, 403 (46 Am. Rep. 657). As was stated in the latter case:

“The misappropriation of the public moneys forms good ground for such an injunction by the citizen and taxpayer, because the corporation holds its moneys for the corporators, to be expended for...