The Act of the legislature of Arizona of February 21, 1883,
authorizing Pima County in that territory to issue its bonds in aid
of the construction of a railway, is a violation of the
restrictions imposed upon territorial legislatures by Rev.Stat. §
1889, as amended by the Act of June 8, 1878, c. 168, and the bonds
issued under the authority assumed to be conferred by that statute
created no obligation against the county which a court of law can
enforce.
This was an action originally begun in the District Court of the
first Judicial District of Arizona upon 2,250 coupons
Page 155 U. S. 55
attached to 150 bonds, issued by the defendant county July 1,
1883, and payable to the Arizona Narrow Gauge Railroad Company or
bearer. The railroad in question was organized under a general act
of the territorial legislature for the incorporation of railroads,
passed in 1879, which gave them power to make all contracts,
acquire real and personal property, to sue and be sued, to borrow
money necessary for the construction of the road, to issue bonds
and notes therefor, and to receive donations or voluntary grants of
real and personal property to that end. The bonds in question were
issued by the board of supervisors of the defendant county under an
Act of the Legislature of Arizona of February 21, 1883, entitled
"An act to promote the construction of a certain railroad," and
were part of a series of 200 bonds issued in pursuance of said act,
and exchanged for a like number of bonds of the railroad company of
like amounts, bearing like interest, and running like times as the
bonds in suit.
Defendant demurred to the complaint both generally and
specially, and upon argument the demurrer was sustained and
judgment entered in favor of defendant.
Plaintiff appealed to the supreme court of the territory, by
which the judgment of the district court was affirmed. He thereupon
sued out this writ of error.
MR. JUSTICE BROWN, after stating the facts in the foregoing
language, delivered the opinion of the Court.
This case involves the validity of certain bonds issued by the
County of Pima under an Act of the Legislative Assembly of Arizona
approved February 21, 1883, authorizing and requiring the board of
supervisors to issue $200,000 of bonds of such county, and to
exchange the same, in lots of $50,000 each, for an equal number of
the bonds of the Arizona and Narrow-Gauge Railroad Company, secured
by a mortgage
Page 155 U. S. 56
upon its road. Assuming that the bonds were issued in conformity
with this act, the act itself is claimed to be in conflict with
certain acts of Congress upon the subject of the organization of
territories.
By the Rev.Stat. § 1889 of a chapter containing a provision
common to all the territories,
"the legislative assemblies of the several territories shall not
grant private charters or especial privileges, but they may, by
general incorporation acts, permit persons to associate themselves
together as bodies corporate for mining, manufacturing, and other
industrial pursuits, or the construction or operation of railroads,
wagon roads, irrigating ditches and the colonization and
improvement of lands in connection therewith, or for colleges,
seminaries, churches, libraries, or any benevolent, charitable, or
scientific association."
In 1878, this section was amended by an explanatory act (Act of
June 8, 1878, c. 168, 20 Stat. 101), to the effect that the
restrictions contained in section 1889
"shall not be construed as prohibiting the legislative
assemblies . . . from creating towns, cities, or other municipal
corporations, and providing for the government of the same, and
conferring upon them the corporate powers and privileges, necessary
to their local administration, by either general or special
acts."
Following this there is a paragraph validating acts theretofore
passed creating municipal corporations, and providing, further:
"That nothing herein shall have the effect to create any private
right, except that of holding and executing municipal offices, or
to divest any such right, or to make valid or invalid any contract
or obligation heretofore made by or on behalf of any such town,
city, or other municipal corporation, or to authorize any such
corporation to incur hereafter any debt or obligation other than
such as shall be necessary to the administration of its internal
affairs."
In the face of these restrictions upon its power, the
Legislature of Arizona, on February 21, 1883, passed the act in
question, making it the duty of the board of supervisors to issue
$200,000 of county bonds, and to deliver the same to the railroad
company in exchange for corresponding bonds
Page 155 U. S. 57
of such company. Now unless a debt thus incurred in aid of the
construction of a railroad can be said to be an obligation
"necessary to the administration of the internal affairs" of Pima
County, it must necessarily follow, irrespective of every other
consideration, that the legislature exceeded its powers in
authorizing and requiring the county to issue its bonds in exchange
for those of the railroad company in question, and that the bonds
are void.
The question is too clear for extended argument. By the
"internal affairs" of a municipal corporation, in the
administration of which the legislature could alone authorize it to
incur a debt, was undoubtedly intended such business as
municipalities of like character are usually required to engage in
to fulfill their proper functions and to effectuate the objects of
their charters. In the case of counties, these are ordinarily to
provide a courthouse for the administration of justice, a jail for
the confinement of prisoners, a poorhouse for the sustenance of
paupers (where by local law they are made chargeable upon the
county), offices for the various officials of the county, and,
under certain circumstances, highways and bridges for the
accommodation of the public. It could never have been contemplated,
however, that this power would be used to incur obligations in
favor of a railroad operated by a private corporation for private
gain, though also subserving a public purpose. The record before us
does not show whether this railroad was designed to extend beyond
the limits of the county, but if the county had power to issue its
bonds in aid of railroads at all, there is nothing to indicate that
such power was restricted to such roads as were wholly within the
county, and if this act were a valid exercise of the authority of
the legislature, the credit of the county might be indefinitely
pledged for the construction of railways extending far beyond the
county limits, and indeed for carrying out any such schemes of
public improvement as the legislature could be persuaded to
authorize. Clearly such debts would not be incurred in the
administration of the internal affairs of the county.
The argument of counsel on both sides was largely directed
Page 155 U. S. 58
to the question whether the territorial act of 1883, under which
these bonds were issued, conferred an "especial privilege" upon the
railroad company within the meaning of Rev.Stat. section 1889,
inhibiting "private charters and especial privileges," and also to
the further question whether bonds issued under a mandatory or
compulsory statute are valid; but in the view we have taken of the
case, it is unnecessary to express an opinion upon these
points.
We are compelled to hold that the bonds in question create no
obligation against the county which a court of law can enforce.
The judgment of the court below is therefore
Affirmed.
