Town of Pana v. Lippincott
| Decision Date | 30 November 1877 |
| Citation | 2 Bradw. 466,2 Ill.App. 466 |
| Parties | TOWN OF PANA ET AL.v.CHARLES E. LIPPINCOTT ET AL. |
| Court | United States Appellate Court of Illinois |
ERROR to the Circuit Court of Christian county; the Hon. H. M. VANDEVEER, Judge, presiding.
Messrs. HENRY & DOVE and Mr. J. C. MCQUIGG, for appellants; upon the construction that should be given to the several statutes and charters, cited McCarty v. Orphan Asylum, Soc. 9 Cow. 506; Brown v. Lease, 5 Hill, 226; Card et al. v. McCaleb, 69 Ill. 314; City of Chicago v. Quimby, 38 Ill. 274; Hirn v. State of Ohio, 1 Ohio St. 21; Brow v. Commissioners, 9 Harris (Pa.) 37; Town of Ottawa v. County of LaSalle, 12 Ill. 339; Supervisors, etc. v. Campbell et al. 42 Ill. 490; C. D. & V. R. R. Co. v. Smith et al. 62 Ill. 268; Dwarris on Statutes, 513; 1 Bishop on Criminal Law, 178.
The town having authority to donate only $30,000, an attempt to donate $100,000 would render the whole proceeding void: Robinson v. Harlan, 1 Scam, 237; Powell v. North Mo. R. R. Co. 42 Mo. 63.
As to the effect of the consolidation of companies: Brice on Ultra Vires, 539; Clearwater v. Meredith, 1 Wall. 25.
Distinction between subscription and donation: Town of Concord v. Portsmouth Savings Bank, 2 Otto, 625.
The authority of municipal corporations to issue bonds must be strictly pursued: Harding v. R. R. I. & St. L. R. R. Co. 65 Ill. 90; Jackson County v. Brush, et al. 77 Ill. 59; Chestnutwood et al. v. Hood et al. 68 Ill. 132.
Every step required to confer the power or create the indebtedness must be shown to have been taken in strict conformity with the statute: The People v. Hulbert, 46 N. Y. 113; The People v. Smith, 45 N. Y. 772; Sharp v. Speir, 4 Hill, 79; Beaty v. Knowler, 4 Pet. 152; Bartholomew v. Bently et al. 1 Ohio St. 41; Bank of Chillicothe v. Swayne, 8 Ohio, 286.
Such authority must be shown affirmatively: Wise v. Withers, 3 Cranch, 331; Walker v. Turner, 9 Wheat. 549; Suydam v. Keys, 13 Johns. 444; Bridge v. Ford, 4 Mass. 641; Smith v. Rice, 11 Mass. 507; Brooks v. Adams, 11 Pick. 441.
If the mode prescribed by statute for issuing the bonds is not complied with in all material respects, the bonds are void: People v. Tazewell County et al. 22 Ill. 147; Supervisors, etc. v. The People, 25 Ill. 181.
If the election be held without warrant of law, the whole proceeding is void: Clark v. Hancock County, 27 Ill. 305; Force et al. v. Batavia, 61 Ill. 99; Harding v. R. R. I. & St. L. R. R. Co. 65 Ill. 90.
A corporation can only exercise those powers granted by its charter: Creed v. Commercial Bank, 11 Ohio, 493; Bank of Chillicothe v. Swayne, 8 Ohio, 287; Town of Petersburg v. Mappin et al. 14 Ill. 193.
The right of corporate or local taxation is by the Constitution vested in the corporate authorities, and the legislature cannot confer this power on others: Harward v. St Clair Drainage Co. 51 Ill. 130; Marshall v. Silliman et al. 61 Ill. 218; Wiley et al. v. Silliman et al. 62 Ill. 170; Hessler v. Drainage Com'rs 53 Ill. 105; Lovingston v. Wilder, 53 Ill. 302; The People v. Mayor of Chicago, 51 Ill. 18; Town of Elmwood v. Marcy, 2 Otto, 293; Flack v. Hughes et al. 67 Ill. 384.
The bonds were issued for a private purpose, and hence illegal: Loan Asso'n v. Topeka, 20 Wall. 660; Sharpless v. Mayor etc. Philadelphia, 21 Pa. St. 147; Hanson v. Vernon, 27 Iowa, 28; Allen v. Inhabitants of Jay, 60 Me. 127; Whiting v. Fond du Lac R. R. Co. 25 Wis. 188; Commercial Bank v. Iola, 2 Dill. 353; Lowell v. Boston, 111 Mass. 454; State v. Osawkee Township, 14 Kan. 418; Sherlock et al v. Winnetka, 68 Ill. 530.
A distinction is made between the law of taxation and the law of eminent domain: Cooley on Taxation, 76.
Where private property is sought to be taken, the party claiming the right must show a strict conformity with the statute: Pierce v. Madison & Ind. R. R. Co. 21 How. 442; McGreggor v. Deal & Dover R. R. Co. 16 L. & Eq. 180.
The grant of power to a municipal corporation is to be strictly construed: Queen v. Ellis, 6 Q. B. 501; Com'rs of Hamilton Co. v. Mighels, 7 Ohio St. 110; Tradwell v. Commissioners, 11 Ohio St. 190; Starin v. Genoa, 23 N. Y. 449; Dillon on Municipal Corporations, § 424.
The election was illegal and the subscription a nullity: People v. Town of Santa Anna, 67 Ill. 57; People v. Town of Laenna, 67 Ill. 65; Force v. Batavia, 61 Ill. 99; Trustees v. The People, 63 Ill. 299; Harward v. St. Clair Draniage Co. 51 Ill. 130; Supervisors, etc. v. People, 25 Ill. 181; Ryan v. Lynch, 68 Ill. 160.
The law clothed the board of town auditors with power to authorize the issuing of the bonds, and this power could not be delegated by them to others: Clark v. Supervisors, etc. Hancock Co. 27 Ill. 305; Jackson County v. Brush et al. 77 Ill. 59; Treadwell v. Commissioners, 11 Ohio St. 190; Marshall et al. v. Silliman, 61 Ill. 218; Lovingston v. Wilder, 53 Ill. 302; Harward v. St. Clair Drainage Co. 51 Ill. 130; Hessler v. Drainage Co. 53 Ill. 105; People v. Mayor of Chicago, 51 Ill. 17; Wiley v. Silliman, 62 Ill. 170; Elmwood v. Marcy, 2 Otto. 292.
The new Constitution creates no new rights, and confers no new powers: County of Moultrie v. Savings Bank, 2 Otto, 631; Jackson County v. Brush et al. 77 Ill. 59; Town of Concord v. Portsmouth Savings Bank, 2 Otto, 625.
Where there is want of corporate authority, the recitals in the bonds are not conclusive: The Floyd Acceptances, 7 Wall. 666; Marsh v. Fulton County, 10 Wall. 676; Loan Asso'n v. Topeka, 20 Wall. 660; Elmwood v. Marcy, 2 Otto, 289; Concord v. Savings Bank, 2 Otto, 625; Harshman v. Bates County, 2 Otto, 572; Marshall County v. Cook, 38 Ill. 44; Bissell v. Kankakee, 64 Ill. 249; Schuyler County v. The People, 25 Ill. 181; Supervisors v. Clark, 27 Ill. 305; Ryan v. Lynch, 68 Ill. 160.
A purchaser of municipal bonds must, at his peril, inquire into the power of the corporation to issue them: Marsh v. Fulton Co. 10 Wall. 676; Baltimore v. Reynolds, 20 Md. 1; Hodges v. Buffalo, 3 Comstock, 430; Mussey v. Beecher, 3 Cush. 519; Livingston Co. v. Weider, 64 Ill. 427.
A purchaser of negotiable paper is chargeable with knowledge of such facts as he might ascertain by ordinary diligence: Rupert et al. v. Mark, 15 Ill. 540; Morrison v. Kelley, 22 Ill. 610; McConnell v. Reed, 4 Scam. 117; Merrick v. Wallace, 19 Ill. 486; Parsons v. Amour, 3 Pet. 428; Stainer v. Tysen, 3 Hill, 279; Atwood v. Mounings, 7 B. & C. 278; Lowell, etc. Bank v. Inhabitants of Winchester, 8 Allen, 109; Mechanics' Bank v. N. Y. & N. H. R. R. Co. 3 Kernan, 599; Schooner Freeman v. Buckingham, 18 How. 182; Marshall County v. Cook, 38 Ill. 44; N. Y. Life Ins. Co. v. Beebe, 3 Seld. 364; Gould v. Town of Sterling, 1 Am. Law Reg. 295; Clark v. City of Des Moines, 6 Am. Law Reg. 148.
Negotiability will not validate obligations not binding for want of power to issue them: Gould v. Town of Sterling, 1 Am. Law Reg. 295; Hull et al. v. Marshall County, 12 Iowa, 142; Treadwell v. Commissioners, 11 Ohio St. 190.
Want of corporate power cannot be supplied by the unauthorized representations of municipal officers: Marshall County v. Cook, 38 Ill. 44; Marsh v. Fulton County, 10 Wall. 676; Bissell et al. v. Kankakee, 64 Ill. 249; Harding v. R. R. I. & St. L. R. R. Co. 65 Ill. 90; Dart v. Hercules, 57 Ill. 446; Rochester v. Alford Bank, 13 Wis. 488; Peterson v. Mayor, etc. 17 N. Y. 449; Clark v. City of Janesville, 10 Wis. 136; Angell & Ames on Corporations, 48.
The doctrine of estoppel does not apply where the instrument creating the estoppel is void: Treadwell v. Commissioners, 11 Ohio St. 191; Knowles v. Gas Light and Coke Co. 19 Wall. 58; Rochester v. Alford Bank, 13 Wis. 488.
This is a bill in chancery, to enjoin the collection of a special tax levied to pay the interest on one hundred thousand dollars in bonds, issued by said town to the Springfield and Illinois Southeastern Railway Company, and to have the bonds declared void.
An injunction was issued, and upon answer filed the same was dissolved and the bill dismissed. The company to which these bonds were issued was formed by the consolidation of two other companies--the Pana, Springfield and Northwestern Railway Company, and the Illinois Southeastern Railway Company-- both of which had been created by special charter granted by the legislature of this State, and all the rights, privileges and powers of the new company are derived from these charters and subsequent amendments thereto. No legislation was ever passed in favor of the new company after the consolidation took place.
On the 30th day of April, 1870, and after the consolidation, a special town meeting was held in the town of Pana, presided over by a moderator, at which it was voted to donate to the said Springfield and Illinois Southeastern Railway Company, one hundred thousand dollars in the bonds of said town, to be issued upon certain conditions named in the submission, to run twenty years, and to bear interest at the rate of eight per cent. per annum, payable semi-annually. In 1873 the bonds ($100,000) were issued by the supervisor and town clerk, and delivered to the railroad company, since which time interest has been paid on said bonds for three years, with money levied and collected in the town for that purpose.
It is insisted that the laws under which these bonds were donated and issued limited the right of the town in making such donation to said company to a sum not exceeding thirty thousand dollars, and that they were not voted at such an election as was required by law, and that for these reasons the bonds are void.
Municipal corporations like the town of Pana, are created by the Legislature for governmental purposes only, and have no power to engage in commerce, or to make subscriptions or donations to railroads, unless the same is conferred by statute, and when such power is given by statute, it must be clearly conferred and strictly pursued. Harding v. R. R. I. & St. L. R. R. Co. 65 Ill. 92.
The statute authorizes the...
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