People ex rel. Bay City v. State Treasurer

23 Mich. 499, 1871 Mich. LEXIS 129
CourtMichigan Supreme Court
DecidedOctober 18, 1871
StatusPublished
Cited by71 cases

This text of 23 Mich. 499 (People ex rel. Bay City v. State Treasurer) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
People ex rel. Bay City v. State Treasurer, 23 Mich. 499, 1871 Mich. LEXIS 129 (Mich. 1871).

Opinion

Cooley, J.

This is an application for a mandamus to require the respondent to deliver to the proper authorities of Bay City certain bonds which, under the provisions of an act entitled “An act to enable any township, city or village to pledge its aid, by loan or donation, to any railroad company now chartered or organized under, and by virtue of, the laws of the state of Michigan, in the construction of its road,” approved March 22, 1869 (Sess. L. 1869, p. 89), had been issued and deposited in the respondent’s office in aid of the Jackson, Lansing & Saginaw railroad company. The act in question undertook to empower any such township or city to pledge its aid to any railroad company chartered or organized, or that might thereafter bo organized, under the laws of the state, in the construction of the road of such company, by way of loan or donation, for such sum or sums, not exceeding ten per centum of the assessed valuation then last made, of the real and personal property of such township or city, as a majority of the electors should, at a meeting called for the purpose, determine; hut with certain provisos which we need not here recite. Any township or city availing itself of the pro[501]*501visions of the act by voting aid to any railroad company was to issue coupon bonds for the amount of aid granted, which were to be deposited in the office of the treasurer of the state, and by him delivered to such railroad company on a certificate from the governor, showing that the company under the act had become entitled thereto. And the bonds so issued were to be paid as they fell due, from taxes levied upon the taxable property of the municipality issuing the same. The provisions of the act were also extended to incorporated villages.

Under this act, it appears that Bay City voted aid to the Jackson, Lansing & Saginaw railroad company to the amount of one hundred thousand dollars, and issued and deposited its coupon bonds with the state treasurer therefor. We are not advised whether the aid to this extent was to be by way of donation or loan, nor do we regard it as material. The city now desires the return of the bonds, and has made' demand therefor upon .the treasurer, who has declined to comply therewith.

In The People v. The Township Board of Salem, 20 Mich., 452, this court decided that the municipal corporations of this state had no authority in return for, or upon the basis of, the incidental benefits anticipated, to exercise the power of taxation in aid of private corporations building, or proposing to build, railroads to be owned and controlled by their corporators; and that bonds issued by way of such aid, being incipient steps leading to taxation, were therefore unauthorized. We held, moreover, that the taxing power of the state had certain definite limits, one of which was that the tax must be for a public purpose; and that within the meaning of these words as employed to measure the authority of the state to demand and enforce the contributions of its citizens, a railroad in the hand's of' a private corporation- was no more a public purpose than [502]*502a manufactory, a newspaper establishment or any other means for the carrying on by individuals of a business which, while private in its nature, nevertheless supplied a public need. Our conclusion, therefore, was, that the legislature could neither compel the taxation of municipalities in aid of railroad companies, nor could it empower them, in order to give such aid, to tax themselves, or to contract indebtedness which must be paid by taxation.

The case mentioned was argued with signal ability, and' no legal controversy ever passed .upon by the judicial tribunals of the state received a more patient and deliberative hearing or examination. The conclusion reached by the majority of the court, ivas one which struck at the root of all the legislation of which the act in question was an instance. We found no warrant for it in the constitution. On the contrary, we found that it assumed to take from the citizen his property under a pretense of taxation, but in a case and for a purpose not admitting of an exercise of that power. Our constitution has carefully provided a shield against an invasion of the citizen’s right to his property, in the provision which guaranties to every person due process of law. — Art. VI, § 82. To take a man’s property from him under pretense of taxation, for a purpose for which taxation is not admissible, is not due process of law, but is an unlawful confiscation.

The state treasurer, we have no doubt, is acting in good faith in awaiting the order of this court before delivering up the bonds as requested. We assume that he desires the advice of the court as to his duty in the premises, and that it is not his purpose or desire to cause unnecessary trouble, litigation or expense to the municipal authorities. By way. of giving such advice, and in order to render any future application of this character unnecessary, we repeat at this time the main point of our previous decision. We based [503]*503our judgment upon a ground that we thought could not be misunderstood, and the scope of which could be perfectly comprehended. All our reasoning went to show that when the property of the individual was taken by the state, under the forms of taxation, for the use of a private corporation, and for no other return than the expected incidental benefits, it was in effect taken for a private use, and without compensation.

Another fatal objection to all this legislation, upon which the majority of the court were then agreed, was not fully developed, though referred to when our judgment was declared. As we then stated, the power to impose such taxation, if existing at all, could not come from, and was not aided by, the municipal votes. The legislature, would have exactly the same power to impose the taxation without the assent of the municipalities, that it would have to permit it with their assent. If they were allowed to vote upon that question, the permission would be of favor and not of right. The authority must come from the plenary power of the legislature over the whole subject of taxation, which it would exercise upon the municipalities in its discretion. It might seem fairer to the people concerned to permit them to vote upon the question, but in some particulars the very permission would work an injustice. For it needs no argument to show that if a railroad through many municipalities is a public object which may be aided by the taxation of all, there is no mode in which the aid can be given consistent with any recognized theory of taxation without an apportionment of the burden by some rule or upon some basis among them all. This might be done if the legislature prescribed the tax, but it would be impossible under a system under which one township might tax itself ten per cent, of its valuation, another equally benefited by the same object refuse to pay but one, and a third [504]*504decline altogether to hear any share of the common burden. The result of legislation like this would be, that the legislature would be requiring these several municipalities to tax themselves for an object common to them all, but without even the pretense of an apportionment of the burden. But we did not find our constitution silent on the subject of such taxation. Our state had once before had a bitter experience of the evils of the government connecting itself with works of internal improvement.

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Bluebook (online)
23 Mich. 499, 1871 Mich. LEXIS 129, Counsel Stack Legal Research, https://law.counselstack.com/opinion/people-ex-rel-bay-city-v-state-treasurer-mich-1871.