Township of Pine Grove v. Talcott
86 U.S. 666 (1873)

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U.S. Supreme Court

Township of Pine Grove v. Talcott, 86 U.S. 19 Wall. 666 666 (1873)

Township of Pine Grove v. Talcott

86 U.S. (19 Wall.) 666

Syllabus

1. There is nothing in the Constitution of Michigan, established A.D. 1850, and which ordains among other things that

"No person shall be deprived of property without due process of law. The credit of the state shall not be granted in aid of any person, association, or corporation. The state shall not be a party to or interested in any work of internal improvement,"

which makes void the Act of the legislature of that state passed March 22, 1869, and by which it was enacted

"That it shall be lawful for any township or city to pledge its aid to any railroad company now chartered, organized, or that may hereafter be organized under or by virtue of the laws of the State of Michigan, in the construction of its road, by loan or donation, with or without conditions, for such sum or sums, not exceeding 10 percentum of the assessed valuation then last made of the real and personal property in such township or city, as a majority of the electors of such township or city voting shall, at a meeting or meetings to be called for that purpose, determine."

2. The decisions of the highest court of the state to the contrary will not be respected by this Court when such decisions are not satisfactory to the minds of the judges here and when the matter in question is bonds issued in negotiable form by a township of that state, and now in the hands of a citizen of another state or a foreigner, bona fide and for value paid.

3. Questions relating to bonds issued in a negotiable form under such an act involve questions relating to commercial securities, and whether under the constitution of the state such securities are valid or void belongs to the domain of general jurisprudence.

4. County of Otoe v. Railroad Company, 16 Wall. 667, and Alcott v. Supervisors, 16 Wall. 678, affirmed.

Error to the Circuit Court for the Western District of Michigan, in which court Talcott brought assumpsit against the Township of Pine Grove, one of the municipalities of the State of Michigan, to recover the amount of certain bonds issued by that township to aid in the construction of a railroad running through the said township from Kalamazoo to South Haven, both places being in Michigan.

The Constitution of Michigan (adopted A.D. 1850) thus ordains:

"ARTICLE VI, § 32. No person shall be compelled in any

Page 86 U. S. 667

criminal case to be a witness against himself, nor be deprived of life, liberty, or property without due process of law."

"ARTICLE XIV, § 6. The credit of the state shall not be granted to or in aid of any person, association, or corporation."

"§ 8. The state shall not subscribe to or be interested in the stock of any company, association, or corporation."

"§ 9. The state shall not be a party to or interested in any work of internal improvement, nor engage in carrying on any such work, except in the expenditure of grants to the state of land or other property."

"§ 11. The legislature shall provide a uniform rule of taxation, except as to property paying specific taxes. Taxes shall be levied upon such property as shall be prescribed by law."

"ARTICLE XV, § 13. The legislature shall provide for the incorporation and organization of cities and villages, and shall restrict their powers of taxation, borrowing money, contracting debts, and loaning their credit."

"ARTICLE XVIII, § 2. When private property is taken for the use or benefit of the public, the necessity for using such property and the just compensation to be made therefor (except when to be made by the state) shall be ascertained by a jury of twelve freeholders, residing in the vicinity of such property, or by not less than three commissioners appointed by a court of record, as shall be prescribed by law."

"§ 14. The property of no person shall be taken for public use without just compensation therefor. Private roads may be opened in the manner to be prescribed by law, but in every case the necessities of the road and the amount of all damage to be sustained by the opening thereof shall be first determined by a jury of freeholders,"

&c.

These provisions of the constitution being in force, the Legislature of Michigan, on the 22d of March, 1869, passed an act entitled

"An act to enable any township, city, or village to pledge its aid, by loan or donation, to any railroad company now chartered or organized under and by virtue of the laws of the State of Michigan, in the construction of its road."

The act enacted:

"That it shall be lawful for any township or city to pledge its aid to any railroad company now chartered, organized, or that

Page 86 U. S. 668

may hereafter be organized, under and by virtue of the laws of the State of Michigan, in the construction of its road by loan or donation, with or without conditions, for such sum or sums, not exceeding ten percentum of the assessed valuation then last made of the real and personal property in such township or city, as a majority of the electors of such township or city voting shall, at a meeting or meetings called for that purpose, determine."

The manner in which the vote should be taken and the bonds executed was provided for in subsequent sections.

Under this act, the bonds on which the suit was brought were issued. The bonds, and the coupons attached to them, were made "payable to bearer." It was not denied that the directions given in the act were carried out.

The declaration set forth in special counts the cause of action. The township demurred on the sole ground that the law in question was in conflict with the constitution of the state, and judgment being given against the township, it brought the case here.

The act under which the bonds were issued had been the subject of very full consideration by the Supreme Court of Michigan in Bay City v. State Treasurer, [Footnote 1] and an act of a similar character had been previously considered by the same court in People v. Salem. [Footnote 2] Both acts were declared to be in conflict with the constitution, and void.

In the former case (Graves, J., dissenting, and delivering an opinion in dissent), the unconstitutionality of the law was placed upon several distinct grounds, some of which were more fully insisted on than others.

In the latter case it was held (Cooley, J., delivering on this occasion, as he had done on the former, the opinion of the court), that the statute was in conflict with Article VI, section thirty-two, already quoted, which provides that no person shall be deprived of his property without due process of law, and also with the provisions of Article XIV, sections eight and nine, also already quoted, which prohibit the

Page 86 U. S. 669

state from being a party to or interested in any works of internal improvement.

The court observes that the state had, prior to 1850, when the constitution was established, been engaged in works of the description named and had owned some of the principal railroads in the state. It refers to the history of the times in which the constitution was adopted, and points out how previously to that time the people had been fraudulently led into the creation of debts for railroads of which they denied the moral obligation, and in consequence of which their public credit had been impaired; and how -- interpreting these provisions as effectually guarding them against the like evils and dangers for the future -- the people were induced more than by any other motive to adopt the constitution. The court said:

"All these provisions were incorporated by the people in the constitution as precautions against injudicious action by themselves, if in another time of inflation and excitement they should be tempted to incur the like burdensome taxation in order to accomplish public improvement in cases where they were not content to wait the result of private enterprise. The people meant to erect such effectual barriers that if the temptation should return, the means of inflicting the like injury upon the credit, reputation, and prosperity of the state should not be within the reach of the authorities. They believed these clauses of the constitution accomplished this purpose perfectly; and none of its provisions had more influence in recommending that instrument to the hearty goodwill of the people."

"In process of time, however, a majority in the legislature were found willing, against the solemn warning of the executive, to resort again to the power of taxation in aid of internal improvement. It was discovered that though 'the state' was expressly inhibited from giving such aid in any form, except in the disposition of grants made to it, the subdivisions of which the state was composed were not under the like ban. Decisions in other states were found which were supposed to sanction the doctrine that under such circumstances, the state might do indirectly through its subdivisions what directly it was forbidden to do. This a way was opened by which the whole purpose of

Page 86 U. S. 670

the constitutional provisions quoted might be defeated. The state could not aid a private corporation with its credit, but it might require each of its townships, cities, and villages to do so. The state could not load down its people with taxes for the construction of a public improvement, but it might compel the municipal authorities, which were its mere creatures, and which held their whole authority and their whole life at its will, to enforce such taxes, one by one, until the whole people were bent to the burden."

"Now, whatever might be the just and proper construction of similar provisions in the constitutions of states whose history has not been the same with our own, the majority of this Court thought, when the previous case was before us, and they still think, that these provisions in our constitution do preclude the state from loaning the public credit to private corporations, and from imposing taxation upon its citizens, or any portion thereof, in aid of the construction of railroads. So the people supposed when the constitution was adopted. Constitutions do not change with the varying tides of public opinion and desire; the will of the people therein recorded is the same inflexible law until changed by their own deliberate action; and it cannot be permissible to the courts that, in order to aid evasions and circumventions, they shall subject these instruments, which in the main only undertake to lay down broad general principles, to a literal and technical construction, as if they were great public enemies standing in the way of progress, and the duty of every good citizen was, to get around their provisions whenever practicable, and give them a damaging thrust whenever convenient. They must construe them as the people did in their adoption, if the means of arriving at that construction are within their power. In these cases we thought we could arrive at it from the public history of the times."

Notwithstanding these decisions, the court below gave judgment against the township, and it, accordingly, brought the case here.

Page 86 U. S. 672

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