Campbell v. City of Kenosha - 72 U.S. 194 (1866)
U.S. Supreme Court
Campbell v. City of Kenosha, 72 U.S. 5 Wall. 194 194 (1866)
Campbell v. City of Kenosha
72 U.S. (5 Wall.) 194
1. Where the legislature of a state passes two acts, one (which by the constitution it had the power to pass) authorizing a city to subscribe a limited amount ($150,000) of stock to a railroad, another (which, by the constitution, it had no power to pass) authorizing it to subscribe an unlimited amount, and the city, professing to act under the one which authorized the unlimited amount, subscribes the limited amount ($150,000), a subsequent recognition by the legislature of the subscription as legal, validates the subscription.
2. The legislative recognition may be made by implication.
3. A statute which, in the case of such an issue, creates as part of the municipal government an officer whose duty it is to attend to the city's interests
and concerns in regard to the railroad subscribed to and who, the act declares, "shall redeem all scrip which has been issued for it," constitutes a ratification of the originally irregular issue.
The Constitution of Wisconsin ordains:
"It shall be the duty of the legislature, and they are hereby empowered, to provide for the organization of cities and incorporated villages, and to restrict their power of taxation, assessment, borrowing money, contracting debts, and loaning their credit so as to prevent abuses in assessments and taxation and in contracting debts by such municipal corporations."
With this provision in force, the legislature of the state, on the 22d March, 1853, authorized the City of Kenosha "to issue the corporate bonds of the said city to the Kenosha & Beloit Railroad Company for the payment of a sum not exceeding $150,000." It was provided, however, that no bonds should be issued under this act unless a majority of the legal voters voted in favor of it.
By section 8 of an act passed the next day, "An act to amend the charter of the City of Kenosha," approved March 23, 1853, the legislature enacted as follows:
"The city council shall have power to levy and collect special taxes for any purpose (aside from what may be specially provided for in the city charter) which may be considered essential to promote or secure the common interest of the city, or may borrow on the corporate credit of the city for such purposes any sum of money for any term of time at any rate of interest not exceeding ten percentum, and payable at any place that may be deemed expedient."
This act also provided that no tax should be levied or money borrowed unless in accordance with a certain section -- "section 44 of An act to incorporate the City of Kenosha'" (the original city charter) -- a section which, like one in the first-named act, provided for a submission of the matter to a vote of the people; when the amount and object
of the proposed tax or loan to be voted upon should be specifically stated.
In this state of statutory enactments, the city, in August, 1855, passed an ordinance:
"That under and in accordance with section 8 of 'An act to amend the charter of the City of Kenosha,' approved March 23, 1853, and section 44 of the 'Act to incorporate the City of Kenosha,' a question shall be submitted to the legal voters whether a tax to the amount of one hundred and fifty thousand dollars shall be levied and collected for the promotion of the common interest of the city in aid of the Kenosha & Beloit Railroad."
The question of the tax and loan was thus submitted, the reader will observe, under the Act of March 23, amendatory of the charter, and not under that of March 22, authorizing a subscription for a specific sum, $150,000.
A majority of the voters having voted for the subscription, under the ordinance just quoted, the city issued scrip, in the form of small drafts, by the mayor and clerk, on the city treasurer, for different sums of money payable "out of any funds in the treasury belonging to the city, the same having been allowed for scrip in aid of the Kenosha & Beloit Railroad Company."
In 1857, the next year after the city had thus subscribed for stock and issued its scrip, and so become a stockholder in the new railroad, the legislature passed an act giving a revised charter to the city, which it accepted. This new charter provided that a railroad commissioner should be annually elected thereafter as a city officer, and, prescribing his duties, proceeded:
"He shall have, generally, the charge and control of all interest the City of Kenosha now has, or may hereafter have, in the Kenosha & Beloit Railroad. He shall receive all funds paid into the hands of the city treasurer, on account of the tax for the benefit of the Kenosha & Beloit Railroad Company, and shall hereafter redeem all scrip which has been issued to said railroad company, as the same becomes due, making such provision therefor,
or recommending such measures to the common council as he may deem necessary for the benefit of the taxpayers of the city."
The scrip issued as above-mentioned was not paid at its maturity, and, in 1859, the city councils of Kenosha made arrangements by which the city obtained from the holders of it an enlargement of the time of payment. Being at the efflux of the enlarged term still unpaid, one Campbell, who held a quantity of it, brought suit in the circuit court for Missouri against the city.
On the trial the holder of the scrip offered the same in evidence. The city objected to its reception on the ground that section 8 of the act to amend the charter of the City of Kenosha, approved March 23, 1853, and also the ordinance and other proceedings under it, were void, as being in contravention of the Constitution of the State of Wisconsin. And that the scrip had not been validated either by the subsequent act of 1857, making it the duty of the railroad commissioner to redeem the scrip, nor by the proceeding of the city council in 1859, procuring an enlargement of the time; inasmuch as it was not in the power of either the city council or of the legislature itself, to give validity to that which was, by the constitution, void.
The court sustained the objection, and judgment was given for the city.