Town of Concord v. Portsmouth Savings Bank
92 U.S. 625 (1875)

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U.S. Supreme Court

Town of Concord v. Portsmouth Savings Bank, 92 U.S. 625 (1875)

Town of Concord v. Portsmouth Savings Bank

92 U.S. 625

Syllabus

An act of the General Assembly of the State of Illinois in force March 7, 1567, authorized towns acting under the Township Organization Law of the state -- of which the Town of Concord was one -- to appropriate money to aid in the construction of a certain railroad, to be paid to said company as soon as its track should have been located and constructed through such towns. At a popular election held in the Town of Concord on the 20th of November, 1869, the proposition to make such appropriation was submitted to the legal voters thereof as required by the act, and the town voted the appropriation, provided the company would run its road through the town. On the 20th of June, 1870, the company gave notice of its acceptance of the donation, and on the 9th of October, 1871, town bonds representing such donation were issued by the supervisor and town clerk.

Held:

1. That under the statute, the town could not make an appropriation or donation in aid of the company until its road was located and constructed through the town.

2. that the constitution of the state, which came into operation July 2, 1870, annulled the power of any city, town, or township to make donations or loan its credit to a railroad company, and, after that date, rendered the act of 1867 ineffective.

3. As the town had no authority to make a contract to give, and the acceptance by the company was an undertaking to do nothing which it was not bound to do, before the authority of the town to make or to engage to make a donation came into existence, no valid contract arose from such offer and acceptance.

4. That the bonds so issued are void.

This was an action of assumpsit to recover the amount of the coupons attached to certain bonds issued by the Supervisor and Town Clerk of the Town of Concord, in the State of Illinois.

The act of the General Assembly of the State of Illinois pursuant to which the bonds recite that they were issued provides:

"That all incorporated cities and towns acting under the township organization law which lie wholly or partly within twenty

Page 92 U. S. 626

miles of the east line of this state and also between the City of Chicago and the southern boundary of Lawrence County be and the same are hereby severally authorized to appropriate such sum of money as they may deem proper to the Chicago, Danville & Vincennes Railroad Company to aid in the construction of the road of said company, to be paid to said company as soon as the track of said road shall have been located and constructed through said city, town, or township, respectively, provided however that the proposition to appropriate moneys to said company shall be first submitted to a vote of the legal voters of said respective townships, towns, or cities, at a regular, annual, or special meeting by giving at least ten days' notice thereof, and a vote shall be taken thereon by ballot at the usual place of election, and if the majority of the votes cast shall be in favor of the appropriation, then the same shall be made, otherwise not."

"SEC. 2. The authorities of said townships, towns, or cities, respectively, are hereby authorized and required to levy and collect a tax, and make such provisions as may be necessary for the prompt payment of the appropriation under the provisions of this law."

Pursuant to a notice for that purpose, an election was held on Nov. 20, 1869, and the legal voters of the Town of Concord voted to levy a tax on the taxable property of said town amounting in the aggregate in two years -- to be levied and collected as other taxes -- to the sum of $25,000, to be donated to said railroad company, provided said company run the said railroad through the Village of Concord or on its boundaries, and to and through the Town of Sheldon in Sheldon Township.

On the twentieth day of June, 1870, the railroad company filed in the town clerk's office a written notice of the acceptance of the donation, the same being addressed to the supervisor and town clerk.

The Constitution of Illinois, which took effect July 2, 1870, ordains as follows:

"No county, city town, township, or other municipality shall ever become subscriber to the capital stock of any railroad or private corporation, or make donation to, or loan its credit in aid of, such corporation, provided, however, that the adoption of this article shall not be construed as affecting the right of any such municipality to make such subscriptions where the same have been

Page 92 U. S. 627

authorized under existing laws by a vote of the people of such municipalities prior to such adoption."

On the ninth day of October, 1871, the supervisor and town clerk executed bonds of the following tenor:

"UNITED STATES OF AMERICA, State of Illinois:"

"No. ___] CONCORD TOWNSHIP RAILROAD BOND [$1,000"

"Know all men by these presents that the Township of Concord, in the County of Iroquois and State of Illinois, acknowledges itself to own and be indebted in the sum of $1,000, lawful money of the United States of America, which sum of money the said township of Concord promises to pay to the bearer at the Mechanics' National Bank, Chicago, on the first day of June in the year 1881, with interest thereon at the rate of ten percentum per annum, which interest shall be payable yearly on the first day of June in each year, at the Mechanics' national Bank of the City of Chicago, upon presentation and delivery of the warrants or coupons severally hereto annexed, until the payment of the said principal sum."

"This bond is issued under and by virtue of a law of the State of Illinois to authorize cities, towns, or townships lying within certain limits to appropriate moneys and levy a tax to aid the construction of the Chicago, Danville & Vincennes Railroad, and the faith of said Township of Concord is hereby pledged for the payment of said principal sum and interest as aforesaid."

And they were delivered to the company Oct. 17, 1871.

The case was tried below without the intervention of a jury. The court found for the plaintiff and gave judgment accordingly, whereupon the defendant brought the case here.

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