Webb v. Lafayette Cnty.

• Citation: 67 Mo. 353
• Parties: WEBB v. LAFAYETTE COUNTY.
• Decision Date: 30 April 1878
• Court: Missouri Supreme Court

67 Mo. 353

WEBB

v.LAFAYETTE COUNTY.

Supreme Court of Missouri.

April Term, 1878.

Error to Lafayette Circuit Court.--HON. WM. T. WOOD, Judge.

The coupon described in the first count of the petition was for interest at the rate of ten per cent., payable semiannually.

Alex. Graves for Lafayette county.

1. The Lexington & St. Louis railroad bonds are void, because neither the charter of that company nor the supplemental act of January 4th, 1860, authorized the county to issue ten per cent. bonds with interest payable semi-annually and the funding act of March 24th, 1868, is void, being in conflict with section 32, article 4, constitution of 1865. See People v. Commissioners of Palatine, 53 Barb. 71; Grubbs v. State, 24 Ind. 97; People v. Mellen, 32 Ill. 181; State v. Lafayette County Ct., 41 Mo. 40.

2. The township aid act contravenes section 13, article 11 of the constitution of 1865. Townships have no corporate capacity, and the act of March 23d, 1868, recognizes the fact that such townships have no corporate or contracting capacity; the act does not attempt to confer any such power upon the townships; but requires that upon certain conditions the subscription shall be made by the county court, and bonds shall be issued in the name of the county for and on behalf of the township. Previous to the passage of the ““aid act,” the only law affecting townships is found in the Territorial law which divided each district in the territory into townships, which should constitute the territorial limit of a justice of the peace's jurisdiction and the beat of a constable. The act of March 23d, 1868, attempts to give to the county court the power to make a contract in representative capacity, and in the name of the county, which shall become a charge upon the real estate of the township, when the township itself has no power whatever to make such contract. It is the paradox of a principal which is incompetent to contract, appointing an agent to make a valid and binding contract upon that principal. If these townships may thus be charged with obligations, why may not congressional townships also? The municipal township is an arbitrary division of the territory of the State, as is also the congressional township, and as the congressional township is not a part of the county properly so considered (though it may be embraced in the county limit) so it would seem that the townships created by the territorial law are more appropriately arbitrary police sub-divisions of the State. Section 13 of the constitution, declares that the State shall not become a stockholder in any corporation, and it would seem that upon the principle “the whole is greater than any of its parts,” the prohibition would apply to each integral part of the State contained in these townships.

3. The act also contravenes section 14, article 11, in that it does not require the assent of two-thirds of the qualified voters of the township to a township subscription. Harshman v. Bates County, 92 U. S. 569; Kirkbride v. Lafayette County, (U. S. C. C. W. D. Mo. November term, 1876.) Neither the State v. Linn Co. Ct., 44 Mo. 507; Bassett v. Mayor, 37 Mo. 270, nor State v. Binder, 38 Mo. 450, militate against this view.

4. The act also contravenes section 16, article 11 of the constitution. We ask a re-examination of the decision in State v. Linn County Ct. upon this point in the light of the reasoning in N. Mo. R. R. Co. v. Maguire, 49 Mo. 503. The precedents in this court permit this to be done. See Hamilton v. Marks, 63 Mo. 167; S. C. 52 Mo. 78; Shirts v. Overjohn, 60 Mo. 305; Briggs v. Ewart, 51 Mo. 245; Martin v. Smylee, 55 Mo. 578; Corby v. Weddle, 57 Mo. 472; Schattner v. Kansas City, 53 Mo. 162; Thurston v. St. Joseph, 51 Mo. 510; Gurno v. St. Louis, 12 Mo. 415; Taylor v. St. Louis, 14 Mo. 29; Hoffman v. St. Louis, 15 Mo. 651.

NORTON, J.

This suit was mstituted in the circuit court of Lafayette county. The petition contains two counts, the first of which is founded upon a coupon or interest warrant of a county bond of defendant, issued to the Lexington & St. Louis Railroad Company; the second of which is founded upon a coupon of defendant's bond for and on behalf of Sni-a-bar township, in said county, issued to the Lexington, Chillicothe & Gulf Railroad Company. It is alleged that the bond, a coupon of which is declared upon the first count, was issued by virtue of an order of the county court, and an act of the General Assembly, approved December 9th, 1859, authorizing the county court of any county through which the Lexington & St. Louis Railroad might pass, to subscribe to its capital stock, and issue the bonds of the county in payment thereof and by virtue of an act amendatory thereof, and an act of March 24th, 1868, authorizing counties to fund their debts. It is further alleged that the bond, a coupon of which is declared upon in the second count, was issued to the Lexington, Chillicothe & Gulf Railroad, by virtue of an order of the county court, and an act of the General Assembly,approved March 23rd,1868,entitled “An act to facilitate the construction of railroads in the State of Missouri” and authorized by a vote of two-third of the qualified voters of Sni-a-bar township voting at an election held for that purpose.

The defendant demurred to both counts of the petition; to the first on the ground that the acts referred to in the petition, did not confer authority on the county court to issue the bond or coupon; to the second, on the ground that the act of March 23rd, 1868, under the authority of which the coupons sued upon was issued, was unconstitutional and void. The court sustained the demurrer to the second count, overruled it as to the first, and entered judgment accordingly, to which action both parties excepted and the cause is before us on writ of error.

The exception taken to the action of the trial court, in sustaining the demurrer to the second count of plaintiff's petition, involves a determination of the validity of the act of March 23rd, 1868, under which the coupon in suit was issued. It is insisted that said act is violative of sections 13, 14 and 15, of the constitution of 1865, and before proceeding directly to the question presented, it may be useful to consider the state of the law at the time that instrument was framed and adopted in order to determine what was intended to be accomplished by the sections to which our attention has been called. Section 1, Art. 7 of the constitution of 1820, provided, “that internal improvements should be forever encouraged by the government of the State,” and the General Assembly had put this injunction into practical operation by loaning the credit and issuing the bonds of the State, to various railroad enterprises, whereby a debt of many millions of dollars had been contracted, the payment of which entailed heavy burdens on the people. There was, therefore, up to 1865, no limitation on the power of the Legislature to contract debts on the part of the State, for such purposes, but a positive injunction justifying the exercise of such power. Besides this, our statutes were filled with acts incorporating railroad companies, in the charters of which, counties, cities and towns were authorized to subscribe to their capital stock, and issue bonds in payment without submitting, either the question of subscription or the issuance of bonds, to the voters of such municipalities. Under these laws, subscriptions were freely made, bonds issued and debts contracted on behalf of counties, cities and towns, without the consent of the people charged with their payment. Such was the condition of things when the convention which framed the constitution of 1865 was called, and the facility with which acts of this character were passed and debts contracted under them, were evils it was called upon to deal with and remedy.

The convention not only left out of the constitution prepared by it, and adopted by the people, the injunction contained in the constitution of 1820, that internal improvements should be forever encouraged in the State, but, on the contrary, positively forbade giving the aid or lending the credit of the State to any corporation in the future. This prohibition is contained in section 13, article 11, and is as follows: “The credit of the State shall not be given or loaned in aid of any person, association or corporation; nor shall the State hereafter become a stockholder in any corporation or association, except for the purpose of securing loans, heretofore extended to certain railroad corporations by the State.” This section effectually cured the evil of any further contracting of debts, in this respect, on the part of the State, which, anterior to that time, the Legislature had so freely indulged in. While the binding obligation of such debts, up to that time created, was fully recognized, and ample provision made for their payment, the making of any more such was wholly interdicted, and enterprises for the promotion of which these debts had been incurred, should be left (so far as the State was concerned) to be prosecuted in the future by private capital.

Having thus disposed of this matter, the evil arising from the facility with which county, city and town debts had been contracted, under legislative authorization, was to be disposed of. This the convention undertook to accomplish by section 14, which is as follows: “The General Assembly shall not authorize any county, city or town to become a stockholder in or loan its credit to any company, association or corporation, unless two-thirds of the qualified voters of such county, city or town, at a regular or special election, shall assent thereto.” This section follows immediately after Sec. 13, which, as we have seen, had stripped the State of all power to contract a debt, on account of railroads, or to become a stockholder therein, except to secure a debt already contracted, and embodies the same spirit which is to be found in Sec. 13, though not...