Weismer v. Village of Douglas

The act incorporating the village of Douglas,^[17] authorizes it to sue and to be sued. Probably, this relieves the cases from the question whether an action is the proper remedy for the plaintiffs,^[18] Without passing on that question, we come .to the merits.

The taking of land, in invitum, has been principally done by railroads, etc. Its ground is necessity, and that is its limit,^[18]

But the question here is not on the right of taking land in i/mitum, although it may have some analogy with that subject.^[19] And the numerous cases showing that, on making compensation, land may be taken for.railroads, water-works, and the like, have not much to do with this case. The question here is, whether a municipal corporation can tax the persons and property under its government, in order to turn over the money so raised, to individuals, for the purpose of building a saw-mill.

Another point which should be noticed is, that this question is not affected by the fact (assuming it to be a fact) that a majority of the tax-payers consented. In private corporations, within the scope of the corporate powers, the majority properly govern. But the village is not organized for manufacturing purposes. The majority have no necessary right, therefore, to compel the minority to enter into speculations of this kind. A village is a subordinate branch of the civil government. The legislature may give the management of its municipal affairs to the majority, or to such other authority as may be constitutionally designated. What right has any village authority, whether supported by the majority of taxpayers or not, to take by tax the private property of their citizens in order to give it to others? The mere fact that parties live .within the same corporate limits, does not authorize the majority to make bargains for the minority in matters not pertaining to the corporate body.^[16] While, again, if such a power can be derived from an act of the legislature, then it would follow that no consent of a majority of tax-payers would be needed, in case the legislature chose to dispense with it.

The legislature, without the consent of the majority of the taxpayers, could authorize the municipal authorities to levy taxes for

Without regard, therefore, to the fact thát few of the tax-payers, or many, consented to the issue of these bonds, we return .to the question whether the legislature has any power to authorize a municipal corporation to raise by tax money for the purpose of paying it to private individuals to use in their manufacturing enterprises. The right to tax is necessarily involved in the right to issue bonds, because it is by taxation only that the bonds must be paid. There is no other resource for payment.

It is too late now to dispute that acts similar to the present are constitutional when the enterprise is the construction of a railroad. This is upon the ground that the railroad is a public highway.^[18] As it is the duty of a municipality to take care of the roads and highways within its limits, it was held that “ a railroad terminating at a village .or city was not so foreign to its public interests ” that the municipality might not subscribe to its stock. And from that position the doctrine has finally gone to the extent of allowing a county to give aid to a railroad out of the State.^[19]

But even as to railroads, it seems to be thought that the doctrine has been carried too far; for, while a railroad constructed by a private corporation is a public highway,^[16] and while the legislature may compel a town, without the consent of its citizens, to issue bonds for the construction of highways,^[11] yet, with happy inconsistency, the courts of this State have recently held that the legislature cannot compel a town to issue bonds to aid in the construction of a railroad by a company.^[12] In the language of that decision, a railroad is “ a work, public in some respects, but private in others.” How, decisions which have sustained the so-called “bonding statutes,” have always recognized the fact that railroad companies are private corporations. But they have sus

Since, therefore, the case last cited holds that the railroad—that is, the thing constructed — is “a work public in some respects, but private in others,” we may safely understand that this case shows at least a modification of former decisions. So, too, in the case of Loan Association v. Topeka,^[17] it is remarked “ that few courts have decided in favor of these so-called ‘ bonding statutes,’ without a division among the judges, and others have decided against them altogether.” And the court adds: “ Of the disastrous consequences which have followed its recognition [the constitutionality of such statutes] by the courts, and which were predicted when it was first established, there can be no doubt.” The tone of that decision indicates a doubt of the soundness of the principle which has been decided— even as to railroads.

But when we get beyond the influence of those powerful corporations, and inquire whether a legislature can authorize a city or town to levy a tax for the support of a manufacturing establishment, there can be no doubt, on principle, or from the decisions. No tax can be levied by a city, which is not for a public purpose. And the probable benefit which may come to a city or village from a successful manufacture, is not a public purpose. If a tax may be levied by a city to aid a manufacturer, it would follow that a tax might be laid to aid a merchant; or, in other words, a city, under the form of taxation, might take away the property of some of its citizens to enrich others. This would be confiscation rather than legislation. It is contrary to sound constitutional law — unless, perhaps, in the case of a protective tariff.

A State cannot order a city to raise money by taxation, to establish one of its citizens in business,^[18] The legislature cannot, in the form of a tax, take the money of a citizen and give it to an individual,^[19] A municipal bond, issued under legislative authority to secure the location, or aid in the erection of a manufacture, is void, in the hands of a bona fide holder.^[16]

So, even where, under the authority of the legislature, a town voted to exempt manufacturing establishments from taxation for ten years, it was held that this was indirectly taxing others to give money to the manufacturers, and that it could not be done.^[18]

The legislature of Massachusetts passed a law, authorizing the city of Boston to raise money by the issue of bonds, for the purpose of lending it to owners whose buildings had been destroyed by the great fire. In the case of Lowell v. City of Boston, this law was declared to be unconstitutional. It authorized taxation merely for the benefit of private individuals. Yet in that instance it might have been said with great force, in the language of the decision in the present case, “ the material growth and prosperity of the village (city) would have been largely increased by the accomplishment of the objects of the company (owners), as it would have added a large tax-paying element thereto, and increased the value of the adjacent property.”

This question has been carefully examined in the case of Loan Association v. Topeka.^[19] The city of Topeka had been authorized by the legislature to issue bonds to aid a bridge manufacturing and iron-works company. The only defense considered was, whether such a statute was constitutional. Mo question was made as to the regularity of the issue, and the plaintiff was a purchaser for value. The city had raised by taxation, and paid the coupons first due. This action was on other coupons. The court held that the bonds were void; that a statute which authorized a town to issue bonds in aid of the manufacturing enterprise of indi