State ex rel. Attorney Gen. v. Miller

• Decision Date: 31 October 1877
• Citation: 66 Mo. 328
• Parties: THE STATE ex rel. THE ATTORNEY GENERAL v. MILLER et al., Appellants.
• Court: Missouri Supreme Court

66 Mo. 328

THE STATE ex rel. THE ATTORNEY GENERAL

v.MILLER et al., Appellants.

Supreme Court of Missouri.

October Term, 1877.

Appeal from St. Louis Court of Appeals.

James O. Broadhead, for appellant.

1. The creation of the town of New Franklin was the creation of a public corporation, called the town of New Franklin, but the Legislature authorized the town of New Franklin (which was an agency of the State) to make a contract with an individual, and so soon as that contract is made, there is a franchise, which the State, through its agent, has made, and which it cannot interfere with. I say that the Legislature can abolish the town of New Franklin to-day if it sees fit. It could have done it twenty years ago. It could have blotted it out of existence as a corporation or municipality if it had chosen at any time, either with or without cause. It needed no cause whatever to blot out of existence the town of New Franklin, except that the Legislature should declare that the public good required it; but if the State has used the town of New Franklin as an agent by which a contract has been made with certain individuals in this State, that is a contract made by the State, which no power in this land can interfere with.

Is it a contract? Our Supreme Court has so held and I call your honor's attention to the fact that they have decided that it is a contract, and an inviolable contract--a contract protected by that provision of the Federal Constitution which says that no law shall be passed impairing the obligation of any contract--a contract which Judge NAPTON, in delivering the opinion of the Supreme Court, says the State can no more interfere with than it can interfere with a contract between individuals.

2. The making of the contract does not make the contracting party any part of the corporation of the town of New Franklin. They are authorized to make contracts with him just as a city may be authorized to make a contract with a man in St. Louis county for any purpose whatever; and you might as well say that the person with whom that contract is made is responsible for the act of the corporation of the city of St. Louis, as to say that the man who contracted under this authority of the Legislature to sell lottery tickets to raise money for the town of New Franklin, is responsible for a dereliction of duty on the part of the trustees of that town. It is a most monstrous proposition for the State to advance here in a court of justice.

3. If we should admit that the contract of 1849 was in violation of the law, as it stood at that time, is there any doubt about the power of the Legislature to pass the act of 1855, declaring valid all contracts made prior to that date? Barton County v. Walser, 47 Mo. 189; Steines v. Franklin County, 48 Mo. 167.

4. It is claimed by the Attorney-General that the passage of this act was the exercise of judicial power on the part of the Legislature, but this would be equivalent to saying that the State cannot, through the Legislature, make a contract. He may as well say that an act of the Legislature providing for leasing the penitentiary or modifying the lease is a judicial act; the true and well settled doctrine on this subject is that the Legislature cannot pass a law determining the rights between individuals, but so far as the State is concerned it may make or modify its own contracts with individuals, and this contract of 1849 was a modification of the contract of 1842 between the State and Gregory, made by the State's own agents and confirmed by the act of 1855.

Now, there is really the gist of this whole case. The gentlemen have confounded the two ideas. They have undertaken to establish this proposition, that Gregory is mixed up with the franchise, that Gregory and the trustees are one, that this is a grant to Gregory and the trustees. Why, that is not so. The State simply authorizes these trustees, as its own agent, to make a contract, and through its agents it has made this contract. The State has made it, the Legislature has made it, and they can no more impair a contract made by themselves than they can pass a law impairing a contract between individuals. Gelpcke v. Dubuque, 1 Wall. 175.

5. This court has decided, time and again, that a law passed, and in force on the adoption of the constitution, although that law, in its spirit and essence, is in violation of some new provision adopted by the New Constitution, nevertheless the Legislature afterwards may amend that law, extend its powers and give it new force and efficacy, in spite of the inhibitions of the constitution. State ex rel. v. Cape Girardeau, &c., 48 Mo. 471.

6. There is all the difference in the world between a private and a public corporation. The grant of a charter to a private corporation was held in the Dartmouth College case, and has always been so held since, as a contract which could not be violated, a contract made between a Legislature which grants a charter and the person who is to enjoy its benefits. But a county or town is not an independent, individual person having right of property, with which the State cannot meddle, but is a mere local agency employed by the State for the purpose of municipal government, and liable to have its very existence determined and ended, if the State shall so order. Hamilton v. St. Louis County, 15 Mo. 3; Barton County v. Walser, 47 Mo. 189; People v. Power, 25 Ill. 190; East Hartford v. Hartford Bridge Co., 10 Howard 533; Dunklin Co. v. District Court, 23 Mo. 449; Reardon v. St. Louis County, 36 Mo. 555; Han. & St. Jo. R. R. Co. v. Marion County, 36 Mo. 294.

D. T. Jewett and A. W. Mead for appellant.

1. It has been repeatedly decided by this court that this is a contract simply. State v. Hawthorn, 9 Mo. 389; Morrow v. State, 12 Mo. 279; State v. Morrow, 26 Mo. 131; State v. Miller, 50 Mo. 129.

2. But suppose it is a franchise? Then it is an independent one. It has no connection with the spending of the money. The 10th section of the act of 1833 is set forth in the information, as authorizing the Legislature to repeal all the powers granted by that act. That is of no importance. The Legislature could, without that section, at any time have lawfully repealed all the powers granted by the act of 1833, as that was a mere municipal franchise or charter, and there was no contract in it. But after the act of 1835, and a contract had been made under it, then it was, and is, past the power of the Legislature or convention to annul that contract, as the Supreme Court of this State has four times decided. Some of the judges below could not seem to see any distinction between a municipal charter or franchise, that could be repealed, and a contract made by authority of the State that could not be annulled or repealed. The Gregory agreement is a contract, and cannot be engrafted upon the municipal franchise so as to become repealable at the pleasure of the Legislature, but stands independently, and cannot be broken by one party to it against the will of the other.

But the charter granted to the town of New Franklin is a municipal charter, so far as the town is concerned--as many other privileges are granted to that town by the act of 1833 besides the power to raise money by a lottery.

If the contract can be destroyed by the failure of the trustees to run the municipal franchise right, then e converso, the franchise can be destroyed by failure to fulfill the contract!

But if this Gregory contract is called and treated as a franchise, we say it is an independent one, and can only be forfeited for malfeasance under it, and that it would stand, though the municipal franchise might be taken away or forfeited, or other franchises in the same charter. This is expressly laid down as settled law in Tomlin's Law Dictionary, title quo warranto, p. 283, 2d column, and Tancred, quo warranto, p. 257.

J. L. Smith, Attorney-General, Frank J. Bowman and C. P. Ellerbe for respondent.

1. It is well settled that it is a tacit condition of a grant of incorporation, that the grantee shall live up to the end or design for which it was granted. 16 Maine 224; People v. Bank of Niagara, 6 Cowen 196, 211, 217; 4 Wheat. 558-9; 2 Mo. 169; 5 Mass. 230; 9 Wend. 351; 9 Cranch 43, 51; 2 Mo. 169.

2. Long continued and willful neglect on the part of a corporation to comply with the requirements of its charter, and carry into effect the purposes for which it was created, is cause of forfeiture. 6 Iredell 460, 456; 23 Wend. 235; 5 Iredell 309; 23 Wend 254, 537; 4 Cushing 60, 62; 20 Penn. 185.

3. A corporation, by the terms and nature of its existence, is subject to surrender, by a surrender of its corporate franchises, and by a forfeiture of them for willful misuser and non-user. 8 Peters 281; 11 Alabama 472; 19 Maryland 239; 16 Mass. 102.

4. The plank road franchise was first granted to the trustees of New Franklin, with its lottery attachment, and was afterwards transferred, as is claimed by respondents, to one Gregory and his assigns--under these several assignments defendants now claim. In the original contract with the State, the terms upon which the lottery franchise might be enjoyed, are plainly and unequivocally expressed, viz: To build and keep in repair a plank road, and to use the money raised, for that purpose only. It will be observed that this is the positive provision of the act of 1855, under which title is now claimed. An assignee takes no better or greater title than his assignor possessed--the building of the road was the condition upon which the franchise could alone be enjoyed by the trustees of the town of New Franklin, and they could not convey the franchise divested of its obligations--the obligations have been violated, and the defendants are no longer entitled to enjoy the questionable privileges of this peculiar franchise.

5. When the State grants a franchise for a certain purpose, the purpose contemplated must be strictly complied with, or the parties lose the right to enjoy the privileges...