Case ID: ohio-st_8/html/0394-01.html
Source: Caselaw Access Project
Author: {"author": "Sutliff, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The State of Ohio ex rel. Wesley Smead et al. v. The Trustees of Union Township, in Fayette County, and the Treasurer of said County.
    Under the act of assembly of February 19,1851, section 5, (L. L. Vol. 4-9, p. 433,) and the act of March 20, 1849, (L. L. Yol. 47, p. 178,) an election was notified and held in Union township, Fayette county, July 2, 1853, authorizing the trustees to subscribe for $15,000 of stock in the Dayton, Xenia & Belpre Railroad Company, and a copy of the poll book duly certified to the auditor of the county, showed the vote to be in favor of the subscription; and on the 10th of September, 1853, the trustees subscribed for $15,000 of stock, and in payment for the same, issued to the company township bonds to that amount, payable to said railroad company or order in 1864, on seven per cent, interest, payable -semi-annually, the bonds stating that they were issued in pursuance of the provisions of said acts of assembly; and for the payment of the interest thereon a tax had been levied and paid by the township for the years 1854, 1855, 1856 and 1857, to the treasurer of the county; and upon the order of the trustees of the township, the interest for 1854 had been paid when due, by the treasurer, to the holders of the bonds, to whom they had been negotiated ; and the trustees refusing to give an order to the treasurer to pay the money so collected to said- bond-holders for the remaining interest, on the ground that said acts of assembly were not in force under the constitution of 1851, and that the provisions of the acts had not been strictly regarded in the proceedings preliminary to the issuing of the bonds; Held:
    1st. That said acts of assembly were not abrogated by the constitution of 1851.
    2d. That as to third persons, bona fide holders of the bonds, without notice, the trustees were estopped to aver such irregularity in their proceedings, and that the bonds were not in fact issued agreeably to the provisions of said acts of assembly. . \
    This is an application for a peremptory mandamus to compel tbe trustees of Union township, in Fayette county, and tbe treasurer of said county to pay tbe over due interest upon certain bonds issued by said trustees to tbe Dayton, Xenia and Belpre Railroad Company, and by that company indorsed to tbe relators.
    Tbe case may be stated as follows:
    On tbe 19tb day of February, 1851, tbe general assembly passed “ an act to charter tbe Dayton, Xenia and Belpre Railroad Company.” 49 L. L. 432.
    It is provided in the first section of this act that certain persons therein named—
    
      
      “Be and they are hereby created a body corporate and politic, with perpetual succession, by the name and style of the Dayton, Xenia and Belpre Railroad Company, with power to construct and maintain a railroad from Dayton, in Montgomery county, to Xenia, in Greene county, and thence to intersect with the Belpre and Cincinnati railroad, at or near the point where said railroad crosses Rattlesnake creek, in the county of Highland, Ohio-”
    Th.e fiffcb. section provides:
    “ That the trustees of any township through or in which the line of the Dayton, Xenia and Belpre Railroad Company may be surveyed or located, and the trustees of any township adjoining any township through or in which the line of said road may be surveyed or located as aforesaid, and the trustees of any township, any part of which lies within ten miles of any surveyed or located line of said road, are hereby authorized to subscribe any sum not exceeding fifteen thousand dollars to the capital stock of said company; and the trustees of each of such townships shall, in all respects, have all the rights, privileges and powers, and be subject to all the restrictions and conditions of ‘ an act to. authorize subscriptions to the capital stock of the Bellefontaine and Indiana Railroad Company, by towns and townships on the line of said road,’ passed March 20,1849; and said act shall, in all respects, be applied to all subscriptions made by virtue of this act, and to all acts done, or to be done by virtue hereof, and to all officer’s acting under the provisions of this act, and to all taxes to be levied for the payment of principal and interest of all subscriptions made, moneys borrowed, or securities given therefor, so far as the same applies to this act.”
    By said act of March. 20,1849, (47 L.L. 179,) it is provided as follows:
    “ Sec. 1. That the town council of any incorporated town, and the trustees of any township through which the Bellefontaine and Indiana Railroad Company may be located, are hereby authorized to subscribe any sum not exceeding fifteen thousand dollars to the capital stock of said company; and for the payment thereof the town council and the township trustees of any town or township which may subscribe stock as aforesaid, are hereby authorized to borrow money or issue bonds or orders at a rate of interest not exceeding seven per cent, per annum on the credit of such town or township ;• they shall levy and collect, annually, such taxes as, together with the dividends arising from said stock, will pay the interest of such loan, bonds or orders, and incidental charges; and at the end of five years they may levy and collect taxes sufficient, together with the dividends aforesaid, to pay one-half of the principal of said loan, bonds or orders, and at the end of ten years a tax sufficient to pay the remainder thereof.”
    
      “ Sec. 2. That no subscription shall be made by any town or township, without the assent of the people of such town or township, which assent shall be obtained as follows: The council of such town and the trustees of such township, shall give at least' thirty days notice previous to the next annual election in such towns and townships for town and township officers, or at any special election which such town council and township trustees may and are hereby •authorized to call for that purpose, that a vote will be taken at such annual or special election, as the case may be, on the question of making such subscription as aforesaid, which notice shall be published in some newspaper, if any such shall be published in the town or township, and by written advertisements, posted in three of the most public places in such towns and townships, and the qualified electors of said towns and townships shall, at said elections, vote by ballot, ‘ for subscription/ or ‘ against subscription.’ ”
    “ Sec. 3. The judges of the election in said several towns and townships, shall transmit certified returns of said ballotings, in said towns and townships, to the auditor of their respective counties, within two days after such election; and if it shall appear that a majority of the ballots cast in any of said towns or townships is in favor of such subscription as aforesaid, such subscription may be made in the manner aforesaid, in behalf of each of said towns and townships voting therefor as aforesaid,” etc.
    
      “ Sec. 4. All taxes levied under this act, shall bo certified to the county auditor of the proper county, and by him be placed on the county duplicate, and be collected by the county ^treasurer, in the same manner as state and county taxes, and by such treasurer paid out on the order of the proper authorities of the town or township entitled thereto, for the purpose aforesaid, and for no other.”
    Sec. 5 provides for assessing and collecting taxes sufficient to pay tbe principal and interest wbick may become past due on bonds, etc.
    “ Sec. 7. It shall be the duty of the county treasurer to pay the said orders, bonds, or evidences of indebtedness of towns or townships over due, in the same order in which they shall be presented, as fast as the money collected will enable him so to do,” etc.
    On tbe 2d day of July, 1853, a special election was held in Union township, and a vote taken by the qualified electors of the township for and against “ subscription” to the capital stock of the Dayton, Xenia and Belpre Railroad Company, and resulted in 247 votes for, and 41 against “ subscription,” as appears from a copy of the poll-book duly certified to the county auditor.
    'Whereupon the trustees of the township, on the 10th day of September, 1853, on behalf of the township, subscribed fifteen thousand dollars to the capital stock of said company; and for the payment thereof, issued, on the credit of the township, their thirty bonds, of five hundred dollars each, payable to said company or order, with interest thereon at the rate of seven per cent, per annum, payable on tbe presentation of the proper coupons therefor, at the office of the Ohio Life Insurance and Trust Company, in the city of New York, on the first days of July and January in each year, until the payment of the principal sum, on January 1st, 1864.
    The bonds state, upon their face, that they were issued by virtue of said act of February 19, 1851.
    The bonds were delivered to the company; and for them the township received a certificate of stock in the company for the amount of the subscription.
    The relators are bona fide holders, for value, of twenty of these bonds.
    For the payment of the interest on the bonds, a tax was levied and paid by the township for each of the years 1854,1855,1856,1857, to the treasurer of the county. The treasurer, upon the order of the trustees of the township, paid to the holders of the bonds the two installments of interest for 1854, when due, but refused, and refuses to pay the interest over due, though properly demanded, for the reason that he has not only received no order from the ti’ustees so to do, but that, on the contrary, they have ordered him not to pay such interest.
    The trustees claim to be justified in refusing to order the payment of the ovex’-due interest on the bonds, on the ground that the acts of assembly under which they wex’e issued, were superseded by the constitution of 1851, before they were issued; and if not so superseded, that in the proceedings preliminary to the issuing of the bonds, the provisions of said acts were not complied with, in various particulars, as to the notice of the election, and the survey and location of the road, etc.
    But as the decision of the case does not depend upon the facts in regard to these preliminary proceedings, they axo omitted; the general finding in regard thereto, appearing in the opinion of the court.
    
      N. H. Swayne, and N. Hush, for the relators.
    
      
      Briggs $ Maynard, and R. A. Harrison, for defendants.
   Sutliff, J.

The fact that the election, and subscription of stock by the trustees, and their issue of the bonds, were subsequent to the adoption of the constitution of 1851, presents, substantially, the same question decided in the case of Cass v. Dillon, 2 Ohio St. Rep. 607.

In that case the decision turned upon the question, whether the act of assembly of March 24, 1851, authorizing a subscription of stock in the Cincinnati, Wilmington and Zanesville Railroad Company (49 O. L. Laws 539), was abrogated by the new constitution. That act was for a similar purpose, and contained provisions similar to the acts of assembly of February 19,1851, and of March 20, 1849, presented for consideration in this case.

Although the question, as an original one, when presented in that case, seemed to be one not free from embarrassments and doubt, the majority of the court held that the acts of. the assembly, passed under the constitution of 1802, authorizing subscriptions and issuing of bonds, was not abrogated by the new constitution; an opinion with which we are well satisfied.

The provision of the new constitution, by which, it is said, these laws were abrogated, is contained in sec. 6 of art. 8, and is in these words:

The general assembly shall never authorize any county, town, or township, by vote of its citizens or otherwise, to become a stockholder in any joint stock company, corporation or association whatsoever, or to raise money for, or loan its credit to, or in aid of any such company or corporation, or association.”

This provision, it will be observed, does not inhibit such subscription, or issuing of bonds, by virtue of existing laws. It only prohibits the general assembly from passing such laws in future, after the adoption of the new constitution. It is therefore evident that the subscription and issuing of the bonds, not being forbidden by the constitution, the same were valid by force of the acts under which issued, unless those acts of assembly were abrogated by that or some other provision of the new constitution. But the section referred to is the only one particularly relating to this subject; and if those acts of the general assembly are repealed by this provision of the constitution, it must be by implication merely, as no such intention is expressed.

Sec. 1 of the schedule in the new constitution, provides that “ all laws of this state in force on the first day of September, 1851, not inconsistent with this constitution, shall continue in force until amended or repealed.”

Unless, therefore, the acts of assembly in question are such as cannot consist with the provision of section 6 of art. 8, the constitution does not require their abrogation, but expressly requires that they shall continue in force.

It is a well settled rule of law, that repeals by implication are never favored. And this rule applies, as well to the constitution and previously existing statutes, as it does to old statutes and new. If any reasonable construction may be given to each, so that both may stand, such construction must be given. If it cannot be, but the two are evidently irreconcilable and cannot reasonably coexist, the former statute must of necessity give way, and be considered as abrogated or repealed by implication.

In the case of Evans v. Dudley, 1 Ohio St. Rep. 441, Judge Ranney, in remarking upon this subject, uses the following lafiguage: “ As repeals by implication are not favored, the repugnancy between the provisions of two statutes must be clear, and so contrary to each other that they cannot be reconciled, in order to make the latter operate a repeal of the former.”

But in this case there is no inconsistency in the language of the acts of assembly, and the provision of the constitution under consideration. The provision of the constitution is prospective in its terms. There are many other provisions of the constitution likewise prospective in their terms, and which inhibit, in future, such legislation and laws as the constitution found existing, and evidently contempla ted. leaving unimpaired and in full force. Such is the provision in sec. 1, art. 18, that “ the general assembly shall pass no special act conferring corporate powers.” Section 7 of the same article provides that, “ no act of the general assembly authorizing associations with banking powers shall take effect until it shall be submitted to the people at the general election next succeeding the passage thereof, and be approved by a majority of all the electors voting at such election.” And there are numerous provisions in the new constitution prohibiting the passing, in future, such laws as are to be found, and in full force, here and there throughout our statute book. But no lawyer has ever supposed the fact of an inhibition by the new constitution upon a future legislature passing similar laws, is by necessary implication a repeal of such existing acts passed under the old constitution, and in accordance with its provisions.

It is, however, upon this point of the case sufficient to .say, that we fully assent to the reasoning and conclusions of the majority of the court in the case of Cass v. Dillon, as expressed by the able and learned opinion delivered by Judge Thurman in that case. This court has had occasion, at different times heretofore, to carefully consider various objections urged to the constitutionality of statutes similar to those under consideration, and their constitutionality has been unifoi’mly affirmed by the court. The validity of the acts of assembly referred to, can, therefore, no longer be regarded by the court as doubtful. See C. W. Z. R. R. Co. v. Comm’rs of Clinton Co., 1 Ohio St. Rep. 77; S. & I. R. R. Co. v. Trustees of North Township, Ib. 105; Citizens’ Bank v. Wright, 6 Ohio St. Rep. 518; State ex rel. Garrett v. Van Horn, 7 Ohio St. Rep. 327.

It is further insisted, that even if the acts of assembly be regarded as in full force, their provisions have not been so complied with as to render the bonds obligatory.

The proofs in the case, with the agreed statement of facts, show that a survey of the road had been made before the election; that the election was held and conducted substantially in accordance with the requirements of the statute; and that the survey and location of the line of the road was made within the required distance.

In the case of The State ex rel. Garrett et al. v. Van Horn, 7 Ohio St. Rep. 827, this court held that, in such a case as the one under consideration, where the tax payers had, without protest or interference, suffered the election to take place, and authorized the subscription to be made and the bonds to be negotiated, they could not afterwards, as against innocent bond holders, deny their recognition of the acts of their agents, on the ground that the railroad was not located until after the election and subscription.

"We are well satisfied with the correctness of this doctrine, and its reasonable application as expressed in that case; and if the proof left any similar question in this case in doubt, we could not withhold the application of the same rule. To withhold such application would certainly be in disregard of the most wholesome application of the doctrine of estoppel in an appropriate case for its exercise. The case is simply this: The inhabitants and tax payei’s of Union township, under the statutes referred to, call an election, and by a vote of 247 to 41, assert their right to subscribe for, and become owners of, $15,000 of the stock of the road, and to pay for the same by negotiating their bonds to that amount; and, by their vote, they instruct their agents^ the trustees, to subscribe for the stock, and to issue and negotiate the bonds. Under this instruction, and, at least the tacit assent of the 41 voters, the trustees subscribe for the stock, and issue the bonds and negotiate them, and thereby pay for the stock as requested. Third persons, reposing in full confidence upon the bona fide character of the transaction on the part of the township, purchase the bonds; no individual in the township protesting or even making any objection to the subscription, or the issuing and negotiation of the bonds. • And, as if to give to third persons still stronger confidence in the bonds, the township has continued year after year for a number of years to assess and pay a tax to meet the annual interest upon those securities. Under these circumstances it is, that the township, while still retaining the pi-ice axxd proceeds of the bonds, proposes to set up as a defense to their payment, that the township had not in fact proceeded in all respects strictly in conformity with the statute in issuing said bonds; and that, therefore, they are void.

We hold that the township, as to third persons, holding in good faith these securities, is estopped to aver a matter in defense so evidently inconsistent with its previous conduct and representations in the premises.

It is urged, however, on the part of the defense, that, notwithstanding the bonds contain words of negotiability, and were transferred to the relators for value-before due, it appears upon their face that they were issued by vii’tue of the authority conferred upon the trustees by said acts of the general assembly, and the election held in pursuance thex’eof. But to give this argument any force, the fact of issuing the bonds must have been an independent act of a third party. When taken in connection with the fact that the trustees in issuing the same were acting under the direction, and in fact as the agents of the township, the recitals of the bonds become those of the principal, and would seem rather to estop the trustees to allege any thing contrary to such recitals.

Indeed the defense proposed to be set up, that in issuing these securities the township had not been careful in all x-espects to comply with the provisions of the statutes under which the proceedings were had, would seem to savor too xnuch of taking advantage of ones own wrong to meet much favor in a court of justice. It would cex’tainly be counter to the spirit of the maxim, nemo ex suo delicto meliorem snam conditionemf acere potest.

This is not such a case as that where an officer, acting independently upon his own mistaken construction of a law, places himself without its provisions, so that his acts cease to be official and obligatory upon others. The trustees in this case not only acted officially, hut they acted under the instructions as well as with the actual assent of the tax payers and voters, whose agents they in fact were, in making the subscription, and issuing the bonds. The township has also, as before remarked, received and still holds the price and fruit of the bonds, negotiated at their direction. The township cannot, therefore, in such case be permitted to repudiate the acts of its agents, the trustees, who negotiated the bonds.

Ve think, therefore, that the township authorities ought to pay the over due interest.

Peremptory mandamus awarded.

Swan, Brinkerhobi' and Scott, JJ., concurred.