Sloan v. State

• Decision Date: 24 March 1881
• Citation: 8 N.W. 393,51 Wis. 623
• Parties: SLOAN and Others v. STATE of Wisconsin.
• Court: Wisconsin Supreme Court

51 Wis. 623

8 N.W. 393

SLOAN and Others

v.STATE of Wisconsin.^*

Supreme Court of Wisconsin.

Filed March 24, 1881.

The plaintiffs, who constitute the law firm of Sloan, Stevens & Morris, bring their action in this court to recover compensation, quantum meruit, for legal services rendered by members of the firm to the state. The case comes before the court at the present time on a motion of the plaintiffs for judgment on the complaint and answer, and on a motion of the attorney general to dismiss the complaint. These motions were submitted ore tenus, at the last sitting of the court, and were argued together. The complaint alleges that under and by virtue of chapter 46, Laws 1869, entitled “An act to protect the lands and timber thereon granted to the St. Croix & Lake Superior Railroad Company,” General Samuel Harriman, who had theretofore been appointed by the governor an agent of the state, by virtue of said act, for the purposes therein mentioned, seized a large quantity of logs which had been cut by different persons upon lands granted to the state by congress to aid in the construction of railroads. The claimants of these logs brought actions of replevin in a court of the state of Minnesota against the agent, to recover the same, and such proceedings were had therein that the logs were delivered to such claimants. The replevin suits were removed to the circuit court of the United States for the district of Minnesota. By arrangement between the parties, two of these suits were selected as test cases and tried in the latter court. The principal contention of the plaintiffs in those suits was that the lands granted to the state for railroad purposes, upon which the logs in controversy were cut, had reverted to the United States by reason of the failure of the state to comply with the terms and conditions of the grants. The trials resulted in judgments for the agent, amounting to $22,000. The amount involved in all of the suits was about $70,000. The value of the lands granted, the title of the state to which was thus assailed, was several millions of dollars. It was stipulated by the parties that the other suits should abide the event of those which were tried.

The plaintiffs in the two suits thus tried sued out writs of error and removed the judgments to the supreme court of the United States for review. Because of the interest which the general government was supposed to have in the protection and preservation of the lands granted by it to the state, it was expected that the attorney general of the United States would argue the causes on behalf of the defendant, who represented the state. But that officer had given an official opinion to the secretary of the interior to the effect that those lands had already reverted to the United States because the conditions of the grants remained unperformed, and that the state of Wisconsin had ceased to have any interest in them. Of course this opinion disqualified him to argue the side of the state in the federal court. Thereupon the governor employed the plaintiff Stevens to prepare a brief in the cases in the interest of the state, and subsequently employed the plaintiff Sloan to argue the cases. Those gentlemen performed the services which they were respectively employed to perform. The results of the litigation were that the judgments of the circuit court of Minnesota were affirmed, and the claim that the lands had reverted to the United States was defeated. After the litigation was ended, the plaintiffs, Messrs. Sloan, Stevens, and Morris, presented their account for services to the secretary of state to be audited. The secretary declined to audit the account and draw his warrant on the treasurer for the amount allowed, on the ground that he had no authority to do so. They then presented the claim to the legislature, but that body refused to make an appropriation to pay it. They now bring suit therefor against the state. It is further alleged in the complaint that there remains in the treasury of the state over $100,000, collected on account of trespasses upon the lands thus granted to the state.I. C. Sloan, for plaintiffs.

H. W. Chynoweth, Ass't Att'y Gen., for defendant.

LYON, J.

The lands donated to the state by congress, to aid in the construction of certain railroads, when accepted by the state, were held by it in trust for the uses and purposes specified in the several acts of congress donating the same. Within the limits hereinafter stated, it was the clear duty of the state, thus acting as a trustee, not only to apply the lands and the proceeds thereof to the purposes of the trust, but also to protect the lands from spoliation while the title thereto remained in the state, and to compel persons who had unlawfully taken timber therefrom to re-imburse the trust fund to the extent of the damages they had committed upon the lands. In the execution of these duties the power of the legislature is plenary, with the single limitation that it cannot authorize expenditures beyond the amount of the trust funds in that behalf under the control of the state. To do so would be to create a state debt not authorized, and therefore prohibited, by the constitution. Const. art. 8, §§ 4, 10.

The constitution provides that “whenever grants of land or other property shall have been made to the state, especially dedicated by the grant to particular works of internal improvement, the state may carry on such particular works, and shall devote thereto the avails of such grants, and may pledge or appropriate the revenues derived from such works in aid of their completion.” But over this grant of power, controlling and inflexibly limiting it, is the prohibition, “ the state shall never contract any debt for works of internal improvement.” Section 10, supra.

Section 6 of art. 8 authorizes the state, under certain conditions and limitations, to contract public debts, not exceeding in the aggregate $100,000, “for the purpose of defraying extraordinary expenditures.” But manifestly the expenditures for which such indebtedness may be contracted must be made by the state in the performance of functions pertaining to its sovereignty. The execution of the trust assumed by the state, in respect to the lands granted to it in aid of the construction of railroads, is not one of those functions.

When our constitution was adopted, the subject of state indebtedness, particularly for works of internal improvement, was prominent in the public mind. Some of the states had theretofore contracted large debts in the prosecution of such works, and the weight thereof pressed heavily upon the people.

Moreover, the territory of Wisconsin had incurred liabilities, the amount of which was then unascertained, on account of lands theretofore granted by congress to the territory to aid in connecting by a canal the waters of lake Michigan and Rock river. These liabilities the future state would necessarily inherit, and the act of congress for the admission of the state of Wisconsin into the Union, approved May 29, 1848, provided expressly that such liabilities should be paid and discharged by the state. Taylor's St. 85, § 2.

Beyond those liabilities the framers of the constitution were solicitous that no such evil should ever afflict this state. Hence the general prohibition of § 4, art. 8: “The state shall never contract any public debt, except in the cases and manner herein provided;” and the specific prohibition of section 10: “The state shall never contract any debt for works of internal improvement.” Hence, also, section 3: “The credit of the state shall never be given or loaned in aid of any individual association or corporation;” and section 9: “No scrip, certificate, or other evidence of state debt whatsoever shall be issued, except for such debts as are authorized by the sixth and seventh sections of this article.” Reference has already been made to the sixth section.

The seventh section authorizes the legislature to borrow money to repel invasion, suppress insurrection, or defend the state in time of war. Under this section the bonds of the state, known as “war bonds,” were issued during the late rebellion.

Having thus guarded against the creation of a state debt exceeding $100,000, except in case of insurrection or war, and having doubly guarded against the creation of any debt for works of internal improvement, the framers of the constitution proceeded to consider another subject vital to the interests of the future state. The policy of donating portions of the public domain in aid of works of internal improvement had been inaugurated by congress. As already stated, a grant of land had been made to the territory to aid in the construction of a canal from Lake Michigan to Rock river. Congress had also made another grant to the future state, upon its admission into the Union, to aid in the improvement of the Fox and Wisconsin rivers. Other grants to the state for kindred purposes were confidently expected, and that expectation was afterwards fully realized. The improvements in aid of which these grants were made and expected were needed to facilitate the settlement and develop the resources of the state, and their early construction by unaided private enterprise could scarcely be hoped for. It seemed, therefore, to be sound policy for the state to leave itself free to accept such grants and to execute the trusts thereof. And so the framers, wisely, no doubt, inserted the provision that the state might carry on particular works, in aid of which a grant had been made to it.

The provision of the constitution last mentioned contains a very significant clause authorizing the legislature to ...