UNITED STATES V. COUNTY OF CLARK

• Decision Date: 01 January 1877
• Citation: 96 U. S. 211
• Court: U.S. Supreme Court

United States v. County of Clark

96 U.S. 211

ERROR TO THE CIRCUIT COURT OF THE UNITED

STATES FOR THE EASTERN DISTRICT OF MISSOURI

Syllabus

A county subscribed for stock of a railroad corporation, and issued bonds in payment therefor, pursuant to a law which authorized a levy of a special tax to pay them, "not to exceed one-twentieth of one percent upon the assessed value of taxable property for each year," but contained no provision that only the fund so derived should be applied to their payment. Held that the bonds are debts of the county as fully as any other of its liabilities, and that for any balance remaining due on account of principal or interest after the application thereto of the proceeds of such tax the holders of them are entitled to payment out of the general funds of the county.

On the fourth day of January, 1876, the United States, on the relation of William A. Johnston, filed in the court below a petition for a mandamus against the County Court of Clark County, Missouri, and the justices thereof.

The case exhibited by the pleadings is this:

On the sixth day of June, 1874, said Johnston recovered a judgment in said circuit court against that county for ,606.64 and costs. The judgment was for unpaid installments of interest on bonds of the county, each for 0, issued on the first day of June, 1871, by order of the county court in execution of a power conferred by the charter of the Missouri & Mississippi Railroad Company. The whole issue under the order was 0,000, and the judgment was for interest upon one-fourth of the amount. An execution having been issued upon the judgment and a return made that no property could be found, he applied for a mandamus requiring the county court and the justices thereof to direct

Page 96 U. S. 212

the clerk of the county to draw a warrant on the county treasurer for the balance of the judgment remaining unpaid, so that he might be enabled, on its presentation, to have it paid in its order out of the county treasury. His right to such a warrant, and the duty of the county court to direct it to be drawn, are claimed to be founded upon the general statutes of the state. The act respecting the powers and duties of county courts (Wagner, Stat. 414, sec. 28) enacts as follows:

"Each county court shall have power to audit, adjust, and settle all accounts to which the county shall be a party; to order the payment out of the county treasury of any sum of money found due by the county,"

and the thirty-first section provides that, 'when the court shall ascertain any sum of money to be due from the county, they shall order their clerk to issue a warrant therefor,' drawn upon the county treasurer, prescribing the form. The thirty-second section requires every such warrant to be drawn for the whole amount ascertained to be due to the person entitled to the same, and by the eighth section of the act, warrants are required to be paid in the order of their presentation.

Such, in the main, is the case made by the relator. The defendants concede the recovery of the judgment and the lawful issue of the bonds, but aver that the charter of said company expressly provided that the levy of a tax by the county court should not exceed one-twentieth of one percent each year for the payment of the bonds and the interest thereon. They further aver that they have levied that tax; that they have no authority to provide any other revenue fund for the payment of the said bonds or interest, or any judgment thereon; that the relator is not entitled to have his judgment paid out of any other fund; that the fund is to be distributed proportionately among all the holders of the bonds of the 0,000 issue; that there is no fund in the treasury applicable to the bonds; and that they are not authorized to order a warrant for the relator's judgment payable out of any other fund than that derived from the tax of one-twentieth of one percent authorized by that charter.

The provision of the charter mentioned in the pleadings is as follows:

"It shall be lawful for the corporate authorities of any city or town, or the county court of any county, desiring so to

Page 96 U. S. 213

do, to subscribe to the capital stock of said company, and may issue bonds therefor and levy a tax to pay the same not to exceed one-twentieth of one percent upon the assessed value of taxable property for each year."

The statutes of the state make it the duty of the county court to levy taxes for county uses not exceeding the rate of five mills, or one-half percent. The tax of one-twentieth of one percent is an authorized addition to this.

The United States demurred to the defense. The demurrer was sustained and the petition dismissed. This writ of error was then sued out.

Page 96 U. S. 214

MR. JUSTICE STRONG, after stating the case, delivered the opinion of the Court.

The question presented by the record is whether the relator is entitled to payment of his judgment out of the general funds of the county, so far as the special tax of one-twentieth of one percent is insufficient to pay it. And we think that he is thus entitled is plain enough unless the act which gave the county authority to issue the bonds directs otherwise. That act gave plenary authority to the county to subscribe to the capital stock of the railroad company and to issue bonds therefor, but imposed no limit upon the amount which it empowered a county to subscribe, and for the payment of which authority was given for the issue of county bonds. This was left to the discretion of the county court. So it has been held by the supreme court of the state. State v. Shortridge, 56 Mo. 126. A limitation was, however, prescribed for the special tax which was allowed to be levied. But that was a special tax, distinct from and in addition to the ordinary tax which by other statutes the county court was authorized to levy, probably supposed to be made necessary by the new liabilities the county might assume. There is no provision in the act that the proceeds of the special tax alone shall be applied to the payment of the bonds. None is expressed, and none, we think, can fairly be implied. It is no uncommon thing in legislation to provide a particular fund as additional security for the payment of a debt. It has often been done by the states, and more than once by the federal government. The Act of Congress of Feb. 25, 1862, 12 Stat. 346, set apart the coin paid for duties on imported goods as a special fund for the payment of interest on the public debt and for the purchase of one percent thereof for a sinking fund; yet no one ever thought the

Page 96 U. S. 215

obligation to pay the debt is limited by the amount of the duties collected. Limitations upon a special fund provided to aid in the payment of a debt are in no sense restrictions of the liability of the debtor. Why, then, must not the special tax of one-twentieth of one percent be regarded as merely an...