Commercial Nat Bank v. Iola

6 F. Cas. 221, 2 Dill. 353, 5 Chi. Leg. News 461, 1873 U.S. App. LEXIS 1451
CourtU.S. Circuit Court for the District of Kansas
DecidedJune 6, 1873
StatusPublished
Cited by3 cases

This text of 6 F. Cas. 221 (Commercial Nat Bank v. Iola) is published on Counsel Stack Legal Research, covering U.S. Circuit Court for the District of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Commercial Nat Bank v. Iola, 6 F. Cas. 221, 2 Dill. 353, 5 Chi. Leg. News 461, 1873 U.S. App. LEXIS 1451 (circtdks 1873).

Opinion

DILLON, Circuit Judge.

Without express legislative authority the city of Iola would have no power to appropriate money or to loan its credit to aid private persons to establish manufactories either near to, or within, the corporate limits. This proposition admits of no dispute, and is well settled. Stetson v. Kempton, 13 Mass. 278; Cushing v. Newburyport, 10 Metc. [Mass.] 510; Cook v. Manufacturing Co., 1 Sneed 698; Pennsylvania R. Co. v. Philadelphia, 47 Pa. St 189; Dill. Mun. Corp. § 106. No precedent authority either by general or special act was conferred upon the city to pass the ordinance to provide for the holding of the election to determine whether the citizens would extend the proposed aid to the bridge manufactory and foundry. The adoption of the ordinance and the holding of the election were without color of law. But subsequently the legislature passed the act mentioned in the statement of the case, which undertook to legalize the election and to authorize the issue of the bonds in question. The bonds were issued under the authority of this act, and so the declaration alleges. Their binding obligation upon the municipality depends upon the validity of this enactment, and the question of its validity is raised by the demurrer to the declaration.

[222]*222Against the act two objections are urged in argument: 1st, that it’ contravenes certain special provisions of the constitution of the state; 2d, that it authorizes the levy and collection of taxes for objects or uses not within the scope of the taxing power. The act whose constitutionality we have to determine purports to legalize the prior election in Iola and to authorize the issue of bonds pursuant to that election. If the legislature might have passed such an act prior to the election, it will not be disputed that it can ratify and confirm an election held without it, but the legislature, it is clear, cannot do by a curative or retrospective act what it could not have previously authorized. Cooley, Const Lim. 281.

The act which was passed and which went into effect February 23, 1871, after reciting the election and legalizing it, authorizes the city to appropriate ?50,000 to aid in the erection of buildings at or near the city of Iola, to be used for the purpose of manufacturing bridges, plows, and stoves, and to issue and deliver the bonds of the city, with coupons attached, payable in fifteen years, and enjoins that it shall levy and collect taxes to pay the principal and interest of the bonds. It is objected that this act violates section 1 of article 12 of the constitution of the state, which provides that the legislature shall pass no special act conferring corporate powers. That the act in question is a special act is so plain as not to justify extended discussion. It is not only limited In its application to the city of Iola, but to a single election and the issue of specific bonds. Never was an act more manifestly special.

It seems to me to be almost equally clear that it is an act which undertakes to confer upon a city corporate powers. It ratifies an election held by the city, and authorizes it to do what, without an express grant, no municipality can do, namely, to issue bonds in aid of a manufacturing enterprise, and to levy and collect taxes to pay such bonds. If the power to create a debt binding upon the municipality and to lay burdens upon all the property within it to pay the debt created, is not a corporate power, it is difficult to conceive what could justly he regarded as such.

The powers given by the terms of the act under discussion are the most important of any which can be conferred upon municipal corporations. They are, indeed, precisely the powers the exercise of which is most to be feared, and which were particularly liable to be unwisely conferred by special legislation. If this prohibition in the constitution (§ 1, art 12) applies to municipal corporations, the special act in question plainly contravenes it. Whether the twelfth article of the constitution of Kansas, quoted in the statement of the case, was designed to apply to municipal corporations, might admit of some discussion if the question were res nova. This article is taken from the constitution of Ohio.3 And the supreme court, not only of that state, but of Kansas, has, upon full consideration, repeatedly decided that it did include municipal corporations. Atchison v. Bartholow (1866) 4 Kan. 124; Wyandotte City v. Wood (1870) 5 Kan. 603; State v. Cincinnati (1870) 20 Ohio St. 18, following Atkinson v. Marietta & C. R. Co. (1864) 15 Ohio St. 21.

In the first case cited, the supreme court of the state of Kansas held that the constitution compelled the legislature to regulate the- grant of powers to municipal corporations by general laws; and hence a special act, or an act specially amending the charter of the city of Atchison in respect to making local improvements and local assessments was void. In the case next cited (Wy-andotte City v. Wood) the same court adhered to this view, and accordingly held that an act of the legislature specially extending the limits of the city of Wyandotte was unconstitutional, because It contravened both sections 1 and 5 of article 12 of the constitution.

So in the case of State v. Cincinnati, above cited the supreme court of Ohio, under the same constitutional provisions, held that the legislature cannot, by special act, create a corporation; nor, by special act, confer additional powers on a corporation already existing, and that in these respects there was no difference between private and municipal corporations since the constitution equally embraced and equally applies to both classes; and therefore the act of April 16, 1S70, “to prescribe the corporate limits of Cincinnati,” being considered a special act, was adjudged void. See, also, Atkinson v. Marietta & C. R. Co., supra. In this case, Ranney, J., thus expounds the constitution: “These provisions of the constitution are too explicit to admit of the least doubt that they were intended to disable the general assembly from either creating corporations or conferring upon them corporate powers by special acts of legislation. It was intended to correct an existing evil, and to inaugurate the policy of placing all corporations of the same kind upon a perfect equality as to all future grants of power; of making such law applicable to all parts of the state, and thereby securing the vigilance and attention of its whole representation; and, finally, of making all judicial construction of their powers, or the restrictions imposed upon them, equally applicable to all corporations of the same class. We must give such a construction to the constitution as will preserve its leading objects intact” One of these objects in Kansas, as well as in Ohio, was to cut up by the roots the mischief of special legislation, particular[223]*223ly in respect to corporations, both public and private. Tbe object would be defeated if tbe special act relating to tbe city of Iola could stand.

If, under the doctrine of Butz v. Muscatine, 8 Wall. [75 U. S.] 575, this court is not absolutely bound, in this class of cases, to follow the interpretation of the state constitution given by its highest court, yet it seems that it ought to follow it where jc appears to rest upon solid grounds, and was made in cases and in respect to questions where there was nothing to warp the judgment of its judges, and where the interpretation was settled or had been declared at the time the act in controversy was passed.

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Bluebook (online)
6 F. Cas. 221, 2 Dill. 353, 5 Chi. Leg. News 461, 1873 U.S. App. LEXIS 1451, Counsel Stack Legal Research, https://law.counselstack.com/opinion/commercial-nat-bank-v-iola-circtdks-1873.