UNITED STATES SUPREME COURT DECISIONS ON-LINE

COUNTY OF CASS V. JOHNSTON, 95 U. S. 360 (1877)

95 U. S. 360

U.S. Supreme Court

County of Cass v. Johnston, 95 U.S. 360 (1877)

County of Cass v. Johnston

95 U.S. 360

Syllabus

1. The provisions of the Act of the General Assembly of Missouri entitled "An Act to facilitate the construction of railroads in the State of Missouri," approved March 23, 1868, commonly known as the "Township Aid Act," which authorize a subscription to the capital stock of railway companies by a township whenever it appears by the returns of an election duly called for that purpose "that not less than two-thirds of the qualified voters of the township voting at such election are in favor of such subscription" are not repugnant to sec. 14, art. 11, of the Constitution of that state, adopted in 1865, which ordains that the general assembly shall not authorize any county, city, or town to become a stockholder in, or to loan its credit to, any company, association, or corporation unless two-thirds of the qualified voters of such county, city, or town, at a regular or special election to be held therein, shall assent thereto.

2. Harshman v. Bates County, 92 U. S. 569, so far as it conflicts herewith, is overruled.

3. All qualified voters who absent themselves from an election held on public notice duly given are presumed to assent to the expressed will of the majority of those voting unless the law providing for the election otherwise declares.

4. It is not an objection to the validity of the bonds issued under that act that the railroad company to the capital stock of which the subscription was made by the county court on behalf of the township was not incorporated until the day when the election took place.

5. On the bonds in question in this suit, the judgment was properly rendered by the court below against the county, to be enforced, if necessary, by mandamus against the county court or the judges thereof to compel the levy and collection of a tax in accordance with the provisions of that act.

Johnston, a citizen of Iowa, brought this action Sept. 3, 1874, against the "County of Cass, trustee for Camp Branch Township in said county, State of Missouri," to recover the amount of certain overdue coupons attached to bonds whereof he alleged that he was the lawful holder. A copy of one of the bonds and of a coupon annexed thereto is as follows:

"UNITED STATES OF AMERICA"

"State of Missouri"

"CASS COUNTY BOND"

"No. 53] Interest ten percent per annum [$500"

"Know all men by these presents that the County of Cass, in the State of Missouri, acknowledges itself indebted and firmly

Page 95 U. S. 361

bound to the St. Louis & Santa Fe Railroad Company, Missouri Division, in the sum of $500, which the said County of Cass, for and on account of Camp Branch Township, for value received, hereby promises to pay said company, or bearer, at the banking house of Northrup & Chick, in the City of New York and State of New York, ten years after date, with interest thereon from the date hereof at the rate of ten percent per annum, payable semiannually on the eleventh days of January and July of each year, on the presentation and delivery at said banking house of Northrup & Chick, in said City of New York, State of New York, of the coupons of interest hereto attached."

"This bond is issued pursuant to an order of the County Court of said County of Cass, made by authority of an Act of the General Assembly of the State of Missouri entitled 'An Act to facilitate the construction of railroads in the State of Missouri,' and approved on the twenty-third day of March, A.D. 1868, and authorized by a vote of more than two-thirds of the voters of said township."

"In testimony whereof, the said County of Cass has executed this bond by the presiding justice of the county court of said county, under the order of said court, signing his name hereto, and by the clerk of said court, under the order thereof, attesting the same and affixing hereto the seal of said court."

"This done at the office of the clerk of said court this eleventh day of July, A.D. 1870."

"[SEAL]"

"JEHIEL C. STEVENSON"

"Presiding Justice of the County Court of Cass County, Mo."

"C. H. DORE"

"Clerk County Court Cass County, Mo."

"HARRISONVILLE, CASS COUNTY, July 11, 1870"

"The County of Cass promises to pay the sum of $25 on the eleventh day of January, 1873, being interest on bond No. 53, for $500, payable at the banking house of Northrup & Chick, in the City of New York, State of New York."

"C. H. DORE,"

"Clerk of the County Court of Cass County, Mo."

The act referred to in the bond is generally known as "The Township Aid Act." The first, second, third, and fifth sections are as follows:

"SECTION 1. Whenever twenty-five persons, taxpayers and residents, in any municipal township, for election purposes, in any county in this state, shall petition the county court of such county, setting forth their desire, as a township, to subscribe to the capital

Page 95 U. S. 362

stock of any railroad company in this state building or proposing to build a railroad into, through, or near such township and stating the amount of such subscription and the terms and conditions on which they desire such subscription shall be made, it shall be the duty of the county court as soon as may be thereafter to order an election to be held in such township to determine if such subscription shall be made, which election shall be conducted and returns made in accordance with the law controlling general and special elections, and if it shall appear from the returns of such election that not less than two-thirds of the qualified voters of such township voting at such election are in favor of such subscription, it shall be the duty of the county court to make such subscription in behalf of such township, according to the terms and conditions thereof, and if such conditions provide for the issue of bonds in payment of such subscription, the county court shall issue such bonds in the name of the county, with coupons for interest attached, but the rate of interest shall not exceed ten percent per annum, and the same shall be delivered to the railroad company."

"SEC. 2. In order to meet the payments on account of the subscription to the stock according to its terms or to pay the interest and principal on any bond which may be issued on account of such subscription, the county court shall from time to time levy and cause to be collected in the same manner as county taxes a special tax which shall be levied on all the real estate lying within the township making the subscription in accordance with the valuation then last made by the county assessor for county purposes."

"SEC. 3. The county treasurer shall be authorized and required to receive and collect of the sheriff of the county the income from the tax provided in the previous section, and to apply the same to the payment of the stock subscription according to its terms or to the payments of interest and principal on the bonds, should any be issued in payment of such subscription; he shall pay all interest on such bonds out of any money in the treasury collected for this purpose by the tax so levied as the same becomes due, and also the bonds as they mature, which shall be cancelled by the county court, and this service shall be considered a part of his duty as county treasurer."

"SEC. 5. In all cases hereafter where a railroad or branch railroad in this state shall be built in whole or in part by subscriptions to its stock by counties, cities, or townships, the proceeds of all state and county taxes levied upon such railroad company or branch so built or the property thereof shall be paid into the treasury of

Page 95 U. S. 363

the counties where collected, and the county treasurers shall apportion the same, according to their several subscriptions, to such counties, cities, or townships so subscribing stock until the whole amount of such subscription is refunded to them, and such sums so apportioned shall be paid over to the county or city treasurer, and applied to the payment of the interest and principal of the bonds issued by such county or city on account of their subscription stock as aforesaid, if any are outstanding, and if not it shall by them be placed to the credit of the school fund in such county, city, or township."

The remaining sections do not affect any question here involved. They declare when the act shall take effect and provide for granting to taxpayers certificates convertible into railway stock.

The Constitution of Missouri took effect July 4, 1865, and sec. 14, art. 11, is as follows:

"The general assembly shall not authorize any county, city, or town to become a stockholder in, or to loan its credit to, any company, association, or corporation unless two-thirds of the qualified voters of such county, city, or town, at a regular or special election, to be held therein, shall assent thereto."

In 1871, the Legislature of Missouri so amended sec. 2 of the Township Aid Act of 1868 as to make the tax therein provided for a tax upon all the real estate and personal property within the township. The county answered that said bonds were issued in payment of a pretended subscription by said county in behalf of said Camp Branch Township, to the St. Louis & Santa Fe Railroad Company, under the authority of the Act of March 23, 1868, and that prior to the date of them, the township had no authority to subscribe for stock in said company or issue bonds therefor or to have the same done for it by the county court; that prior to April 20, 1869, said company had not been organized, that on March 13, 1869, twenty-five voters of said township filed a petition setting forth the desire of said township to subscribe _____ dollars to the capital stock of the St. Louis & Santa Fe Railroad Company, proposed to be organized, to build a railroad through said township, said subscription to be paid in bonds to be issued by said county court for and on account of the township; that on that day, the court ordered an election clubjuris

Page 95 U. S. 364

in said township to be held on April 20, 1869; that on April 20, 1869, articles of incorporation were filed in the office of the secretary of state as provided by law, and thereby said company in said state became incorporated; that at the election so held, two-thirds of the qualified voters of the township did not vote in favor of the subscription, although more than two-thirds of them voted at such election; and that by reason of the premises, said bonds were null and void.

The plaintiff demurred to the answer and, the demurrer having been sustained, judgment was rendered that the plaintiff recover of "said county, trustee for said township" the amount of said coupons, with interest thereon and costs, and that said county do pay the same "out and from taxes levied on the taxable property of said township."

The county thereupon sued out this writ of error. clubjuris

Page 95 U. S. 365


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