People ex rel. Bay City v. State Treasurer
| Court | Supreme Court of Michigan |
| Writing for the Court | Cooley, J.: |
| Citation | 23 Mich. 499 |
| Parties | The People on the relation of Bay City v. The State Treasurer |
| Decision Date | 18 October 1871 |
23 Mich. 499
The People on the relation of Bay City
v.
The State Treasurer
Supreme Court of Michigan
October 18, 1871
Submitted without argument October 17, 1871.
Application for mandamus.
The opinion contains a full statement of the case.
Writ of mandamus issued, without costs.
J. W. McMath, for the relator.
Dwight May, Attorney-General, and George V. N. Lothrop, for the respondent.
Cooley, J. Campbell, Ch. J., and Christiancy, J., Graves, J. concurred.
OPINION [23 Mich. 500]
Cooley, J.:
This is an application for a mandamus to require the respondent to deliver to the proper authorities of Bay City certain bonds which, under the provisions of an act entitled "An act to enable any township, city or village to pledge its aid, by loan or donation, to any railroad company now chartered or organized under, and by virtue of, the laws of the state of Michigan, in the construction of its road," approved March 22, 1869 (Sess. L. 1869, p. 89), had been issued and deposited in the respondent's office in aid of the Jackson, Lansing & Saginaw railroad company. The act in question undertook to empower any such township or city to pledge its aid to any railroad company chartered or organized, or that might thereafter be organized, under the laws of the state, in the construction of the road of such company, by way of loan or donation, for such sum or sums, not exceeding ten per centum of the assessed valuation then last made, of the real and personal property of such township or city, as a majority of the electors should, at a meeting called for the purpose, determine; but with certain provisos which we need not here recite. Any township or city availing itself of the provisions [23 Mich. 501] of the act by voting aid to any railroad company was to issue coupon bonds for the amount of aid granted, which was to be deposited in the office of the treasurer of the state, and by him delivered to such railroad company on a certificate from the governor, showing that the company under the act had become entitled thereto. And the bonds so issued were to be paid as they fell due, from taxes levied upon the taxable property of the municipality issuing the same. The provisions of the act were also extended to incorporated villages.
Under this act, it appears that Bay City voted aid to the Jackson, Lansing & Saginaw railroad company to the amount of one hundred thousand dollars, and issued and deposited its coupon bonds with the state treasurer therefor. We are not advised whether the aid to this extent was to be by way of donation or loan, nor do we regard it as material. The city now desires the return of the bonds, and has made demand therefor upon the treasurer, who has declined to comply therewith.
In The People v. The Township Board of Salem, 20 Mich. 452, this court decided that the municipal corporations of this state had no authority in return for, or upon the basis of, the incidental benefits anticipated, to exercise the power of taxation in aid of private corporations building, or proposing to build, railroads to be owned and controlled by their corporators; and that bonds issued by way of such aid, being incipient steps leading to taxation, were therefore unauthorized. We held, moreover, that the taxing power of the state had certain definite limits, one of which was that the tax must be for a public purpose; and that within the meaning of these words as employed to measure the authority of the state to demand and enforce the contributions of its citizens, a railroad in the hands of a private corporation was no more a public purpose than [23 Mich. 502] a manufactory, a newspaper establishment or any other means for the carrying on by individuals of a business which, while private in its nature, nevertheless supplied a public need. Our conclusion, therefore, was, that the legislature could neither compel the taxation of municipalities in aid of railroad companies, nor could it empower them, in order to give such aid, to tax themselves, or to contract indebtedness which must be paid by taxation.
The case mentioned was argued with signal ability, and no legal controversy ever passed upon by the judicial tribunals of the state received a more patient and deliberative hearing or examination....
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