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.
MR. JUSTICE STRONG delivered the opinion of the Court.
The bonds to which the coupons in suit were attached purport to
have been made under legislative authority given to the town
officers by the Act of March 7, 1867. Their recitals make direct
reference to that act by its title, which is set forth at length,
with an averment that they were issued under and by virtue of it.
The primary question therefore is whether that statute did in
reality give to the supervisor and clerk of
Page 92 U. S. 628
the town power to execute and deliver town bonds on the ninth
day of October, 1871 (when the bonds were in fact issued), as an
appropriation or donation to the railroad company. The first and
second sections are the only ones to which reference need be made.
By the first, it was enacted that certain incorporated towns and
cities, and towns acting under the township organization law (among
which it is conceded the Town of Concord was one), should be and
were severally authorized to appropriate such sum of money as they
might deem proper to the Chicago, Danville & Vincennes Railroad
Company, to aid in the construction of the road of said company, to
be paid to the company as soon as the track of said road should
have been located and constructed through said city, town, or
township respectively. To this was attached the following
proviso:
"
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 take thereon by ballot at the
usual place of election, and if the majority of votes cast shall be
in favor of the appropriation then the same shall be made,
otherwise not."
The second section empowered and required the authorities of
said municipalities to levy and collect a tax and make such
provisions as might be necessary for the prompt payment of the
appropriation under the provisions of the law.
The authority given to the Town of Concord by this statute was
not to subscribe to the stock of the railroad company, but to make
an appropriation or donation in aid of the construction of the
road, and even that donation was not permitted to be made until
after the completion of the location and construction of the road
through the town. It has been strenuously insisted during the
argument that the act conferred no power upon the town to make an
appropriation or donation by the issuing of bonds or certificates
of indebtedness. It is said that other provision was made for the
donation -- provision by the levy and collection of a tax. We do
not care, however, to discuss this matter, for in the view which we
have of the case, it is quite immaterial.
Page 92 U. S. 629
A popular election having been held and a majority of votes cast
at the election having been in favor of the appropriation, it may
be conceded that payment of the appropriation could lawfully have
been made in town bonds instead of money if the donation itself was
authorized. The real question is whether the authority to make the
donation existed when it was made. The act of the legislature of
1867 may have been authority for a donation at any time prior to
July 2, 1870, and no authority at all afterwards. And such, we
think, it was. The popular vote in favor of an appropriation was on
the 20th of November, 1869, but it was not itself an appropriation
or donation, and the town was not authorized to make it until the
railroad was located and constructed through the town. Before that
time and before any attempt at a donation or appropriation was
made, the authority to make it was withdrawn. If no effect be
attributed to the rescinding vote of June 30, 1870, the new
constitution of the state, which came into operation on the 2d of
July, 1870, annulled, we think, the power of municipalities to make
donations to railroad companies. It ordained that
"No city, town, township, or other municipality, shall ever
become subscribers 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
authorized under existing laws, by a vote of the people of such
municipalities prior to such adoption."
This article, in our opinion, makes a clear distinction between
subscriptions to the capital stock of a railroad company or a
private corporation and donations or loans of credit to such
corporations. The latter are prohibited under all circumstances. T
he former may still be made if they have been authorized by a vote
of the people prior to the adoption of the constitution. A very
able and ingenious argument has been submitted to us aiming to show
that in fact the article makes no such distinction, and that
donations and subscriptions are put upon the same footing, but we
cannot yield to it our assent. No matter what may have been the
intention of the mover of the proviso, the intent of the framers of
the article and of the people
Page 92 U. S. 630
adopting it must be gathered from the article itself. There was
reason for the distinction. For subscriptions to capital stock the
municipality got something for which there was at least a
possibility of return, more than was possible in the case of
donation. In both cases, public convenience may have been
contemplated, but in the one, more than that may have been
contemplated and expected, and this may have been the prevailing
motive for assent to a subscription. It cannot be doubted that a
subscription would have been voted in many cases where a donation
or a loan of credit would not have been.
If, then, the state constitution prohibited donations to
railroad companies made after its adoption, the Act of the
legislature of 1867 became ineffective after July 2, 1870. After
that date, the power no longer existed in the municipality.
We do not say that the new constitution could annul or impair
any contract that was made between the town and the railroad
company during the time in which the town had authority to make it.
A constitution can no more impair the obligation of a contract than
ordinary legislation can. But the record exhibits no contract made
before July 2, 1870. The town voted on the twentieth day of
November, 1869, that it would make a donation, provided the company
would run its railroad through the town. On the 20th of June, 1870,
the company gave notice of its acceptance of the donation. But the
town was not empowered to make the donation until the road was
located and constructed through the town. It had no authority to
make a contract to give. And the acceptance was an undertaking to
do nothing which the company was not bound to do before the
authority of the town to make a donation, or to engage to make a
donation, came into existence. What is called the acceptance of the
railroad company cannot be construed as an engagement to located
and build the railroad through the town. It amounted to no more
than saying, "If we build our road through your town, we will
receive your gift." There was therefore no consideration for the
town's promise to give, even if the popular vote can be considered
a promise. There was no contract to be impaired. A contract should
be clearly proved before it invokes the protection of the federal
Constitution.
Page 92 U. S. 631
We conclude, then, that at the time the donation was made, there
was no authority in the municipality to make a donation to the
railroad company and consequently no authority to issue the bonds.
It follows that the bonds and coupons are void.
Judgment reversed and new trial ordered.
