Mount Pleasant v. Beckwith - 100 U.S. 514 (1879)
U.S. Supreme Court
Mount Pleasant v. Beckwith, 100 U.S. 514 (1879)
Mount Pleasant v. Beckwith
100 U.S. 514
1. Where no constitutional restriction is imposed, the corporate existence and powers of counties, cities, and towns are subject to the legislative control of the state creating them.
2. Where a municipal corporation is legislated out of existence and its territory annexed to other corporations, the latter, unless the legislature otherwise provides, become entitled to all its property and immunities, and severally liable for a proportionate share of all its then subsisting legal debts, and vested with its power to raise revenue wherewith to pay them by levying taxes upon the property transferred and the persons residing thereon.
3. The remedy of the creditors of the extinguished corporation is in equity against the corporations succeeding to its property and powers.
APPEAL from the Circuit Court .of the United States for the Eastern District of Wisconsin.
In 1873, Charles Beckwith filed his bill in the court below, against the Town of Mount Pleasant, the Town of Caledonia, and the City of Racine, in Racine County, Wisconsin, to enforce the payment of certain bonds issued in the year 1853, by the Town of Racine in said county, in payment of stock for which it subscribed in the Racine, Janesville, and Mississippi Railroad Company.
The Legislature of the Territory of Wisconsin, by an Act approved Jan. 2, 1838, among other things, established the Towns of Racine and Mount Pleasant and defined their boundaries, and by an Act approved Feb. 7, 1842, created and established the Town of Caledonia and defined its boundaries and those of Racine and Mount Pleasant.
The Legislature of the State of Wisconsin, by an Act approved Aug. 8, 1848, incorporated the City of Racine and defined its boundaries.
By an Act approved April 2, 1853, the Town of Racine was authorized and empowered to subscribe to the capital stock of
the Racine, Janesville, and Mississippi Railroad Company, to the amount of $50,000, and to pay therefor in the bonds of the town, payable within twenty years, in the manner prescribed by said act, and on or about Dec. 6, 1853, it subscribed for and took $50,000 dollars of said stock and issued its bonds accordingly.
In 1856, the legislature changed the boundaries of the Towns of Mount Pleasant and Racine, and in 1857 changed and defined those of the Towns of Racine, Caledonia, and Mount Pleasant.
The Board of Supervisors of Racine County, Dec. 2, 1859, changed the name of the Town of Racine to Orwell.
The legislature, by an Act approved March 30, 1860, vacated Orwell, and attached its territory to Caledonia and Mount Pleasant, and, by an Act approved March 17, 1871, took from the latter a portion of such territory and added it to the City of Racine.
On March 30, 1860, the value of property of individuals within the jurisdiction of the Town of Orwell was:
Real estate . . . . . . . . . . . . $696,024.05
Personal property . . . . . . . . . 37,925.00
There came within the jurisdiction of the Town of Caledonia of this property:
Real estate of the value of . . . . $298,112.00
Personal property of the value of . 15,167.00
And within the jurisdiction of Mount Pleasant:
Real estate of the value of . . . . $397,912.05
Personal property of the value of . 22,757.00
In 1874, the value of property in the Town of Caledonia, which was on that part of its territory attached in 1860, was:
Real estate . . . . . . . . . . . . $326,533.41
Personal property . . . . . . . . . 34,893.00
And the value of property within Mount Pleasant on that part of its territory attached in 1860 from Orwell was:
Real estate . . . . . . . . . . . . $377,610.00
Personal property . . . . . . . . . 35,470.00
And within the limits of the City of Racine on that part of its territory attached in 1871:
Real estate . . . . . . . . . . . . $125,528.00
Personal property . . . . . . . . . 9,385.00
Neither Mount Pleasant nor Caledonia by any corporate act moved the Legislature of Wisconsin for the passage of any of the laws changing any of the territorial boundaries above specified or referred to.
The defendants filed separate general demurrers to the bill, which were overruled. They then answered.
There was evidence tending to show that the stock of the Racine, Janesville, and Mississippi Railroad Company was worth from fifty to seventy-five percent of its par value from 1853 to 1856, the date of the last transaction in stock proven, and that no records of the Town of Orwell ever came to the possession of either the Town of Mount Pleasant or the Town of Caledonia.
Upon hearing, the court below, April 18, 1876, entered the following decree:
"This cause came on to be heard on the twelfth day of May, A.D. 1875, upon the pleadings and proofs reported by the master, and, having been argued by counsel, the court took the same under advisement, and a further computation of the amount due to this date upon the bonds described in the complainant's bill and exhibited in the proofs having been directed and made and filed by the master, bearing date the eighteenth day of April, 1876; and it satisfactorily appearing to the court that the Town of Racine, a municipal corporation in the County of Racine, in said Eastern District of Wisconsin, and then having within its boundaries and municipal jurisdiction the territorial area described in the complainant's bill, on or about the sixth day of December, 1853, made, executed, and delivered the bonds described in his bill upon the consideration, under the authority, and in the manner in said bill set forth; that the said Town of Racine continued in existence as such municipal corporation, and by the same name and with the changes in its territorial boundaries set forth in the complainant's bill, until on or about the second day of November,
1859, when the County Board of Supervisors of Racine County, within which county said Town of Racine was located, by a resolution of said board, changed the name of said town from 'The Town of Racine' to 'The Town of Orwell,' and that the township and municipal corporation theretofore known as the Town of Racine remained in existence in and by the name of the Town of Orwell, and with the same territorial limits which the Town of Racine had prior to such change of name, until on or about the thirtieth day of March, 1860, when the Legislature of the State of Wisconsin, by an Act approved March 30, 1860, vacated and extinguished the corporation and body politic known as the Town of Orwell in the County of Racine and declared that said corporation should thereafter have no existence as a body politic and corporate. That in and by the same act of the legislature of said state, the whole territory of said Town of Orwell, formerly known as the Town of Racine, was attached to the defendants, the Town of Mount Pleasant and the Town of Caledonia, in the proportions and by the boundary lines in said act named, and that no provision was made in or by said act for the payment of the corporate debts of said township and body politic theretofore known by the names of the Town of Racine and the Town of Orwell. And it further appearing to the court that, on or about the seventeenth day of March, 1871, by an act of the Legislature of Wisconsin, approved March 17, and published March 18, 1871, a portion of the lands and territory which had been within the Town of Orwell at the time it was vacated, and which, by the act vacating Orwell, was attached to Mount Pleasant, was detached from the Town of Mount Pleasant and attached to the defendant, the City of Racine, and in and by said act it was provided that the defendant, the City of Racine, should assume and pay so much of the municipal indebtedness of the former Town of Racine, if any, as the lands described in the addition to said city might be or become legally chargeable with and liable to pay."
"And it further appearing that the complainant, at the time of filing his said bill, was and now is the owner in good faith and for value of the bonds in the bill mentioned, and upon which there is due at this date the sum of $23,080.20. "
"Now, at the January Term of this Court, to-wit, on the eighteenth day of April, 1876, the court being sufficiently advised, and being of the opinion that the municipal indebtedness of said Town of Racine, otherwise known as the Town of Orwell, was not extinguished by said act of the legislature vacating and disorganizing said township and distributing its territory to other townships and municipal corporations, and that an equitable liability for such indebtedness accrued against the defendants, to which such territory was distributed, in the proportion which the taxable property received by each and the valuation thereof bore to the whole taxable property and the whole debt of such vacated town."
"Now, therefore, it is considered, adjudged, and decreed that the master's report of the amount due on the bonds set forth in complainant's bill, and of the respective proportions and valuations of the taxable property received by each of the defendants from said Town of Orwell, or which belonged to said town immediately prior to the vacation thereof, be and the same is adopted, ratified, and confirmed."
"And it is further adjudged and decreed that the complainant, Charles Beckwith, do have and recover of and from the defendants, the Town of Mount Pleasant, the Town of Caledonia, and the City of Racine, the sum of $23,080.20, hereby adjudged due to him from them for principal and interest upon the bonds described in the complainant's bill, and which sum it is adjudged the complainant have and recover from the defendants severally, and that the defendants severally pay the same in the proportions and respective amounts following, to-wit:"
"That the complainant, Charles Beckwith, have and recover of and from the defendant, the Town of Caledonia, the sum of $9,281.50, and interest thereon from this date, and also the further sum of $58.37, being one-third of complainant's costs and disbursements of the action, as taxed, and hereby adjudged to the complainant."
"That the complainant, Charles Beckwith, have and recover of and from the defendant, the Town of Mount Pleasant, the sum of $10,742.70, and interest from this date, and also the further sum of $58.37, being one-third of complainant's costs, as taxed. "
"And that the complainant, Charles Beckwith, have and recover of and from the defendant, the City of Racine, the sum of $3,056, and interest thereon from this date, and also the further sum of $58.36, being one-third of complainant's costs, taxed and adjudged to him as aforesaid."
"And it is further adjudged that the complainant have execution against said defendants severally, to collect said several sums decreed to be paid by each, in the manner provided by law."
From this decree the Town of Mount Pleasant and the Town of Caledonia appealed to this Court.