« ForrigeFortsett »
of a city has been invariably treated by this and appurtenances, with the land upon
particularly one relating to taxationshould be held to be irrepealable, or not subject to amendment, an intent not to repeal or amend must be so directly and unmistakably expressed as to leave no room for doubt; otherwise, the intent is not plainly expressed. It is not so expressed when the existence of the intent arises only from inference or conjecture.
The views we have expressed as to the power of the legislature under a reservation made by general statute of the right to amend or repeal are supported by many adjudged cases. Tomlinson v. Jessun, 15 Wall. 454, 457 [21: 204, 205]; Maine C. Railroad Co. v. Maine, 96 U. S. 499, 510 [24: 836, 841]; Atlantic & G. Railroad Co. v. Georgia, 98 U. S. 359, 365 [25: 185, 188]; Hoge v. Richmond & D. Railroad Co. 99 U. S. 348, 353 [25: 303, 304]; Sinking Fund Cases, 99 U. S. 700, 720 [25: 496, 502]; Greenwood v. Union Freight R. Co. 105 U. S. 13, 21 [26 L. ed. 961, 965]; Close v. Greenwood Cemetery, 107 U. S. 466, 476 [27: 408, 412]; Spring Valley Waterworks Co. v. Schottler, 110 U. S. 347, 352 [28: 173, 176]; Louisville Gas Co. v. Citizens' Gas Co. 115 U. S. 683, 696 [29: 510, 515]; Gibbs v. Consolidated Gas Co. 130 U. S. 396, 408 [32: 978, 984]; Sioux City Street Railway v. Sioux City, 138 U. S. 98, 108 [34: 898, 902]; Louisville Water Co. v. Clark, 143 Ú. S. 1, 12 [36: 55, 58]. In Tomlinson v. Jessup, above cited, referring to the reserved power to amend and repeal, this court said: "The
We are of opinion that the exemption from taxation embodied in that act did not tie the hands of the commonwealth of Kentucky so that it could not, by legislation, withdraw such exemption and subject the property in question to taxation. The act of 1886 was passed subject to the provision in a general statute of Kentucky above re-object of the reservation, and of similar ferred to, that all statutes "shall be subject reservations in other charters, is to prevent to amendment or repeal at the will of the a grant of corporate rights and privileges legislature, unless a contrary intent be in a form which will preclude legislative intherein plainly expressed." If that act interference with their exercise, if the public any sense constituted a contract between the interest should at any time require such incity and the commonwealth, the reservation terference. It is a provision intended to in an existing general statute of the right to preserve to the state control over its conamend or repeal it was itself a part of that tract with the corporators, which, without contract. Griffin v. Kentucky Ins. Co. 3 that provision, *would be irrepealable and Bush, 592 [96 Am. Dec. 259]. The city ac- protected from any measures affecting its obcepted the act of 1886 and acquired under ligation. There is no subject over which it it the property taxed subject to that reser- is of greater moment for the state to prevation. There was in that act no "plainly serve its power than that of taxation. expressed" intent never to amend or to re- Immunity from taxation, constituting in peal it. It is true that the legislature said these cases a part of the contract with the that the reservoirs, machinery, pipes, mains, government, is, by the reservation of power
However much we may doubt the soundness of any interpretation of the state Constitution implying that lands and buildings are not public property used for public purposes when owned and used under legislative authority by a municipal corporation-one of the instrumentalities or agencies of the state, for the purpose, and only for the purpose, of supplying that corporation and its people with water, and when the net revenue from such property must be applied in the improvement of public ways, we must as sume, in conformity with the judgment of the highest court of Kentucky, that section 170 of the Constitution of that commonwealth cannot be construed as exempting the lands in question from taxation. In other words, we must assume that the phrase "public purposes" in that section means "governmental purposes," and that the property here taxed is not held by the city of Covington for such purposes, but only for the "profit or convenience" of its inhabitants, and is liable to taxation at the will of the legislature, unless at the time of the adoption of the Constitution of Kentucky it was exempt from taxation in virtue of some contract the obligation of which is protected by the Constitution of the United States.
The fundamental question in the case, then, is whether at the time of the adoption of that Constitution the city of Covington had, in respect of the lands in question, any contract with the state the obligation of which could not be impaired by any subsequent statute or by the present Constitution of Kentucky adopted in 1891. If the exemption found in the act of 1886 was such a contract, then it could not be affected by that Constitution any more than by a legislative enactment.
such as is contained in the law of 1841, sub- | contends,-there would still be no ground for
In New Orleans v. New Orleans Water Works Co. 142 U. S. 79, 91 [35: 943, 947], after referring to previous adjudications, this court said that the authorities were full In our consideration of the question of and conclusive to the point that & municipal contract we have assumed, in harmony with corporation, being a mere agent of the state, the judgment of the court of appeals of Ken- "stands in its governmental or public char tucky, that the property in question was held acter in no contract relations with its sovby the city only for the profit or conven- ereignty, at whose pleasure its charter may ience of its people collectively, that is, in its be amended, changed, or revoked without the[242} proprietary, as distinguished from its gov- impairment of any constitutional obligation, ernmental, character. There are cases ad- while with respect to its private or proprie judging that the extent of legislative power tary rights and interests it may be entitled over the property of municipal corporations, to the constitutional protection." Chancelsuch as incorporated towns and cities, may lor Kent, in his Commentaries, says: "In depend upon the character in which such respect to public or municipal corporations, property is held. Mr. Dillon, in his work which exist only for public purposes. as on Municipal Corporations, says: "In its counties, cities, and towns, the legislature, governmental or public character, the corpo- under proper limitations, has a right to ration is made, by the state, one of its in-change, modify, enlarge, restrain, or destroy struments, or the local depositary of certain them; securing, however, the property for limited and prescribed political powers, to the uses of those for whom it was purchased. be exercised for the public good on behalf A public corporation instituted for purposes of the state rather than for itself. In this connected with the administration of the respect it is assimilated, in its nature and government may be controlled by the legislafunctions, to a county corporation, which, as ture, because such a corporation is not a conwe have seen, is purely part of the govern- tract within the purview of the Constitution mental machinery of the sovereignty which of the United States. In those public corcreates it. Over all its civil, political, or porations there is, in reality, but one party, governmental powers, the authority of the and the trustees or governors of the corpolegislature is, in the nature of things, su- ration are merely trustees for the public." 2 preme and without limitation, unless the Kent, Com. 12th ed. p. *306. Dillon says: limitation is found in the Constitution of the "Public, including municipal corporations, particular state. But in its proprietary or are called into being at the pleasure of the private character, the theory is that the pow- state, and while the state may, and in the ers are supposed not to be conferred, primar- case of municipal corporations usually does, ily or chiefly, from considerations connected it need not obtain the consent of the people with the government of the state at large, of the locality to be affected. The charter but for the private advantage of the compact or incorporating act of a municipal corporacommunity which is incorporated as a dis- tion is in no sense a contract between the tinct legal personality or corporate individ-state and the corporation, although, as we ual; and as to such powers, and to property shall presently see, vested rights in favor of acquired thereunder, and contracts made third persons, if not indeed in favor of the with reference thereto, the corporation is to corporation, or rather the community which be regarded quo ad hoc as a private corpora- is incorporated, may arise under it. Publi tion, or at least not public in the sense that corporations within the meaning of this rule the power of the legislature over it or the are such as are established for public purrights presented by it is omnipotent." I poses exclusively, that is, for purposes conDill. Mun. Corp. 4th ed. pp. 107, 108, § 67, nected with the administration of civil or of and authorities cited. local government, and corporations are public only when, in the language of Chief Justice Marshall, 'the whole interests and franchises are the exclusive property and domain of the government itself,' such as quasi corporations (so-called), counties and towns or cities upon which are conferred the powers
If, however, the property in question be regarded as in some sense held by the city in its governmental or public character, and therefore as public property devoted to public purposes, which is the interpretation of the state Constitution for which the city
of local administration. Subject to constitutional limitations presently to be noticed, the power of the legislature over such corporations is supreme and transcendent; it may, where there is no constitutional inhibition, erect, change, divide, and even abolish them, at pleasure, as it deems the public good to require." 1 Dill. Mun. Corp. 4th ed. p. 93, § 54.
In any view of the case there is no escape from the conclusion that the city of Covingtion has no contract with the state exempting the property in question from taxation, which is protected by the contract clause of the national Constitution.
Marvin v. Ellis, 9 Fed. Rep. 367; Coffin v. Haggin, 11 Fed. Rep. 219; Fountain v. Angelica, 12 Fed. Rep. 8; Farmington v. Pillsbury, 114 U. S. 138, 29 L. ed. 114; Detroit v. Dean, 106 U. S. 537, 27 L. ed. 300; McLean v. Valley County, 74 Fed. Rep. 389.
The court erred in refusing to hold the bonds in controversy void because they created a debt by loan in one year greater than that allowed by the Constitution of Colorado.
Lake County v. Graham, 130 U. S. 674, 32 L. ed. 1065; Lake County v. Rollins, 130 U. S. 662, 32 L. ed. 1060; Dixon County v. Field, 111 U. S. 83, 28 L. ed. 360; Hedges v. Dixon County, 150 U. S. 182, 37 L. ed. 1044. The court erred in holding that the bonds
Ferceiving no error in the record of which this court may take cognizance, the judg-in controversy were valid obligations of Lake ment is affirmed.
BOARD OF COUNTY COMMISSIONERS
HARRY H. DUDLEY.
(See S. C. Reporter's ed. 243-255.)
1. Coupons of bonds made by a county, payable
1888 from the general rule that an assignee
One who is not the real owner of coupons,
Buchanan v. Litchfield, 102 U. S. 278, 26 L. ed. 138; Litchfield v. Ballou, 114 U. S. 190, 29 L. ed. 132; Doon Twp. v. Cummins, 142 U. S. 366,35 L. ed. 1044; Nesbitt v. Riverside Independent Dist. 144 U. S. 610, 36 L. ed. 562; Sutliff v. Lake County Comrs. 147 U. S. 230, 37 L. ed. 145; Graves v. Saline County, 161 U. S. 359, 40 L. ed. 732.
The court erred in holding that Lake county could, by receiving the benefit of and paying the interest on the bond issue in controversy, validate the same.
Marshall County Supers. v. Schenck, 5 Wall. 772, 18 L. ed. 556; Clay County v. Society for Savings, 104 U. S. 579, 26 L. ed. 856; Anderson County Comrs. v. Beal, 113 U. S. 227, 28 L. ed. 966.
The payment of interest will not validate a municipal bond issue without authority of law.
Graves v. Saline County, 161 U. S. 359, 40 L. ed. 732; Merchants' Bank v. Bergen Coun ty, 115 U. S. 384, 29 L. ed. 430.
Messrs. John F. Dillon, Edmund F. Richardson, Harry Hubbard, John M. Dillon, and Daniel E. Parks, for respondent: The plaintiff was a bona fide holder, or enArgued December 14, 15, 1898. Decided titled to the rights of a bona fide holder, of
February 20, 1899.
N WRIT OF CERTIORARI to the United
the coupons in question.
Douglas County Comrs. v. Bolles, 94 U. S. 104, 24 L. ed. 46; Montclair v. Ramsdell, 107
0 States Circuit Court of Appeals for the U. S. 147, 27 L. ed. 431.
Eighth Circuit to review a judgment of that court reversing the judgment of the Circuit Court of the United States for the District of Colorado in favor of defendant in an action brought by Harry H. Dudley, plaintiff, | against the Board of County Commissioners of the County of Lake, Colorado, a governmental corporation, to recover the amount of certain coupons of bonds issued by that corporation. Judgment of Circuit Court and of Circuit Court of Appeals reversed, and cause remanded for a new trial and for further proceedings.
See same case below, 49 U. S. App. 336. The facts are stated in the opinion. Messrs. George R. Elder, Charles S. Thomas, W. H. Bryant, and H. H. Lee, for petitioner:
The court erred in holding that under the testimony in this case Harry H. Dudley was a bona fide holder for value of the coupons in controversy, and entitled to bring suit
A bona fide holder is a purchaser for value without notice, or the successor of one who was such a purchaser.
McClure v. Oxford Twp. 94 U. S. 429, 24 L. ed. 129.
If any previous holder of the bonds in suit was a bona fide holder for value, the plaintiff can avail himself of such previous holder's position without showing that he has himself paid value.
Montclair v. Ramsdell, 107 U. S. 147. 27 L. ed. 431; Douglas County Comrs. v. Bolles, 94 U. S. 104, 24 L. ed. 46: Marion County Comrs. v. Clark, 94 U. S. 278, 24 L. ed. 59; Cromwell v. Sac County, 96 U. S. 51, 24 L. ed. 681; San Antonio v. Mehaffy, 96 U. S. 312, 24 L. ed. S16; Nauvoo v. Ritter, 97 U. S. 389, 24 L. ed. 1050.
The recital in the bonds is conclusive in favor of the bona fide holder that the debt limit prescribed by the statute and by the Constitution has not been exceeded.
Marcy v. Oswego Twp. 92 U. S. 637, 23 L.
†At the trial George W. Wright was introduced as a witness on behalf of the plaintiff.
He stated at the outset that Dudley was the
were introduced in evidence as follows:
owner of the bonds, but his examination showed that he had really no knowledge on the subject, and that his statement was based only upon inference and hearsay. In connection with his testimony certain transfers or bills of sale to Dudley of bonds of the above issue of $50,000 dated December 5th, 1888, purporting to be "for value received" by Susan F. Jones, executrix of the estate of Walter H. Jones, deceased, of bonds Nos. 55 to 64, both inclusive, and Nos. 65 and 66; one dated February 11th, 1885, by David Creary, Jr., J. H. Jagger, Henry D. Hawley, and L. C. Hubbard, all of Connecticut, for bonds Nos. 80, S1, and 82, and Nos. 83 to 86, both inclusive, the consideration recited being $5,380.56, "paid by Harry H. Dudley of Concord" in the county of Merrimac and state of New Hampshire; one dated March 20th, 1885,
ed. 748; Turner v. Woodson County Comrs. | tiff's cause of action, if any he ever had, upon
One of the questions arising on the record is whether Dudley had any such interest in the coupons in suit as entitled him to maintain this suit. The evidence on this point will be found in the margin.†
The circuit court of appeals properly held that the bonds did not create a debt by loan in any one year greater than that allowed by the Constitution of Colorado.
Sutliff v. Lake County Comrs. 147 U. S. 230, 37 L. ed. 145; Lake County v. Rollins, 130 U. S. 662, 32 L. ed. 1060.
In the absence of any statutory public record, a county or municipality may be estopped, by recitals in bonds, from showing that when the bonds were issued there was an aggregate outstanding indebtedness rendering the issue of the bonds illegal.
Marcy v. Oswego Twp. 92 U. S. 637, 23 L. ed. 748; Humboldt Twp. v. Long, 92 U. S. 642, 23 L. ed. 752; Buchanan v. Litchfield, 102 U. S. 278, 26 L. ed. 138; Sherman County v. Simons, 109 U. S. 735, 27 L. ed. 1093; Dallas County v. McKenzie, 110 U. S. 686, 28 L. ed. 285; Wilson v. Salamanca, 99 U. S. 499, 25 L. ed. 330.
 *Mr. Justice Harlan delivered the opinion of the court:
This action was brought in the circuit court of the United States for the district of Colorado by the defendant in error Dudley, a citizen of New Hampshire, against the plaintiff in error the board of county commissioners of the county of Lake, Colorado, a governmental corporation organized under the laws of that state. Its object was to recover the amount of certain coupons of bonds issued by that corporation under date of July 31st, 1880, and of which coupons the plaintiff claimed to be the owner and holder. Each bond recites that it is "one of a series of fifty thousand dollars, which the board of county commissioners of said county have issued for the purpose of erecting necessary public buildings, by virtue of and in compliance with a vote of a majority of the qualified voters of said county, at an election duly held on the 7th day of October, A. D. 1879, and under and by virtue of and in compliance with an act of the general assembly of the state of Colorado, entitled 'An Act Concerning Counties, County Officers, and County Government, and Repealing Laws on These Subjects,' approved March 24th, A. D. 1877, and it is hereby certified that all the provisions of said act have been fully complied with by the proper officers in the issuing of this bond."
The board of county commissioners by their answer put the plaintiff on proof of his cause of action, and made separate defenses upon the following grounds: 1. That the bonds to which the coupons were at tached were issued in violation of section 6, article 11 of the Constitution of Colorado, and the laws enacted in pursuance thereof. 2. That the aggregate amount of debts which the county of Lake was permitted by law to incur at the date of said bonds, as well as when they were in fact issued, had been reached and exceeded. 3. That the plain
by the Nashua Savings Bank of Nashua, New Hampshire, for twenty bonds, Nos. 92 to 111, both inclusive, the consideration recited being $11,869.45, "paid by Harry H. Dudley of Concord," New Hampshire; one dated March 20th, 1885, by the Union Five Cents Saving Bank of Exeter, New Hampshire, of bonds Nos. 112 to 129, both inclusive, the consideration recited being $10,695, "paid by Harry H. Dudley of Concord," New Hampshire; one, undated, by Nos. 55 to 64, both inclusive, and Nos. 65 and 66, together with coupons falling due in 1884 of bonds Nos. 55 to 69, both inclusive; and one dated December 10th, 1884, by Joseph Standley, of Colorado, of twelve bonds, Nos. 68 to 79, both inclusive, and six bonds, numbered 67 and 87 to 91, both inclusive, the consideration recited being $15,887.50, "paid by Harry H. Dudley of
Susan F. Jones, "for value received," of bonds
Concord," New Hampshire.
dicated the actual payment by Dudley in 1882 Here were transactions which, if genuine, Inand 1884 on his purchase of bonds of many thousand dollars.
Dudley's deposition was taken twice; first on written Interrogatories, January 14th, 1895, and afterwards, March 2d, 1895, on oral examination.
In his first deposition Dudley was asked county, and he answered: whether he owned any bonds issued by Lake "Yes, I own certain Lake county bonds which I hold under writ ten bills of sale transferred to me from several different parties." Being asked whether he owned any bonds of Lake county, Colorado, numbered 92 to 111 inclusive, 83 to 86, inclusive, 55 to 64 inclusive, 68 to 79 Inclusive, 80 to 82 inclusive, 65, 66, and 67, and 87 to 91 in"I own, under the aforeclusive, he answered: said bills of sale, bonds mentioned in interrogatory 3." He was then asked (interrogatory 4) if in answer to the preceding interrogatory he said that he owned any of said bonds or the coupons cut therefrom, to state when he pur
At the close of the plaintiff's evidence in chief the defendant asked for a peremptory instruction in its behalf, but this request was denied at that time. When the entire evidence on both sides was concluded, the defendant renewed its request for a peremptory instruction, and the plaintiff asked a like instruction in his favor. The plaintiff's request was denied, an exception to the ruling of the court being reserved. Other instructions asked by the plaintiff were refused, and in obedience to a peremptory instruction by the court the jury returned a *verdict for the defendant, and judgment was
chased the same, from whom he purchased them, and what consideration he paid therefor. his answer he referred to each of the above-mentioned bills of sale, and said that he owned the bonds described in it by virtue of such instruments. He did not say that he paid the recited consideration, but contented himself with stating what was the consideration named in the bill of sale. Being asked (interrogatory 5), "If you are not the owner of said bonds, or any coupons cut therefrom, please state what, if any, interest you have in the same," he answered, “I have stated my interest in the bonds in my answer to interrogatory 4." He was asked (interrogatory 9): "If you say you authorized suit to be commenced in your name, please state under what circumstances you authorized it to be brought, and whether or not the bonds or coupons upon which it was to be brought were your own individual property, or were to be transferred to you simply for the purpose of bring ing said suit." His answer was: "I understand said bonds and coupons were transferred to me, as aforesaid, for the purpose of bringing suit against the county to make them pay the honest debts of the county."
It should be stated that before the witness appeared before the commissioner who took his deposition upon interrogatories, he prepared his answers to the interrogatories with the aid of counsel, and read his answers so prepared when he came before the commissioner.
accordingly entered upon that verdict. Upon writ of error to the circuit court of appeals the judgment was reversed, Judge Thayer dissenting. 49 U. S. App. 336.
1. In the oral argument of this case some inquiry was made whether Dudley's right to maintain this action was affected by that clause in the first section of the judiciary act of August 13th, 1888, chap. 866 (25 Stat. at L. 433, 434), providing that no circuit or district court of the United States shall "have cognizance of any suit, except upon foreign bills of exchange, to recover the contents of any promissory note or other chose no? A. I think this answer is sufficient. Q. If you are successful in the suit brought upon the coupons heretofore attached to the bonds mentioned in said bill of sale, do you not intend to pay the amount of those coupons so recovered to the grantors in said bill of sale, less any legitimate expenses attendant upon the prosecution of this case? A. Yes, my understanding in the matter would be something might be paid them. Q. Is there something to be paid them different from the amount involved in the suit represented by the coupons cut from said bonds? A. I should think there was. Q. In what respect is the difference? A. They would not be paid the full amount. Q. What deduction would you make? A. I do not know just what deduction would be made. Q. When you took this bill of sale, did you execute some sort of a written statement back to the grantors of said bill of sale? A. No, sir. Q. Did you make a verbal agreement at the time with them or any of them? A. No, sir. Q. Were you present when the bill of sale was drawn? A. No, sir. Q. Where was it drawn? A. My impression is that it was drawn at Hartford, Conn., this particular one that you refer to. Q. Yes. Who represented you at the drawing of the bill of sale? A. I have no knowledge of being repre sented there. Q. When did you first know that such bill of sale had actual existence? A. When I received it. Q. When was that? A. I cannot tell the date. It was in the year 1894. Q. Then you knew nothing of it until some nine years after it was made? A. That was the first I knew of it, the year 1894.
In reference to the bonds referred to in the bill of sale from Stanley, the witness testified:
Q. When did you first know of the existence
you? A. No, sir. Q. Is it not a fact that Mr.
When Dudley gave his second deposition his attention was called to his answer to interrogatory 4, in his first deposition, in relation to the bill of sale running to him from Craig [Creary], Jagger, Hawley, and Hubbard. We make the following extract from his last deposition, givIng questions and answers as the only way in which to show what the witness intended to say and what he intended to avoid saying:
Q. You also say in the answer to which I have referred, that the consideration in the said bill of sale was $5,380.56. Did you pay that consideration for the bonds mentioned in the bill of sale? A. No, I did not. Q. Did you pay any part of it? A. No, sir. Q. Why was that bill of sale made to you, Mr. Dudley? I think I have answered that in some interrogatory here; my answer to interrogatory 9 in the deposition I gave before in this case. Q. Are not the bonds mentioned in the said bill of sale, together with the coupons, still owned in fact by the grantors named in said bill of sale? A. Not as I understand the bill of sale. I understand I am absolute owner. Q. Was not that bill of sale made to you for the purpose of enabling you to prosecute this claim upon them? A. My answer to interrogatory 9 in my former deposition answers that also. Q. I repeat the question and ask for a categorical answer. A. I cannot more fully answer the question than I have in answer to interrogatory 9, former deposition. Q. Do you decline to answer It. ves or