The Kenosha telegraph. [volume] (Kenosha, Wis.) 1860-1888, 1867-06-13
Municipal Indebtedness.
Alonzo Campbell, Plaintiff IN error as. the c
of HenOS10

| - brought nave been frequently before this
Icourt for consideration, and there are very few
questions connected with them that have not
been decided. This cause involves the valid
lltY OF the bonds or Grip issued by the defend
an in aid of the Kenosha & Beloit railroad
Ic1mpany. In Wisconsin there is nothing in
| ne organic law restraining the legislature
| from comforting on municipal corporations the
| power to subscribe for stock in a railroad or
other work of public improvement, and the
| highest court of the state has sustained the
validity of securities given by towns and cities
| benefited by their construction where the
power to do so has been granted by the gene
| 'al moly.-(Clark VS.. city OF GAINESVILLE, 10
| Wis. 1856; Bushnell VS.. city of Beloit, 10 Wis
| 1851 But it is insisted, the bonds in contro-
versy were executed and issued without the
authority OF law, previously conferred, and
| therefore, the city of Kenosha must be relieved
| from their payment.
The question presented is an important one
| but in our opinion easily solved when the
whole legislation on The subject is taken into
consideration. On the 18th day OF March, 1858.
an act OF the legislature was passed, authoriz-
| ing the city, if a majority of the people voted
TO- it, to issue its corporate bonds, not exceed
Ing one hundred and fifty thousand dollars. TO
AID IN the construction OF the Kenosha and
| 6"I"it railroad, and to levy taxes to pay for
them, and provision was made that the rail
70 I'd company should secure the city by a lien
on It's properly, when the bonds were execu-
ted and delivered to them. This law confer.
IueDtednGSs (llmitCd in amOun0 for the pro-
motion of a work of internal Improvement, of
Icommon benefit to all its inhabitants ma
lJorIty of the people did vote 10 extend the re
lquired aid, and the city issued its obligations
and delivered them to the COMPANY taking in
Exchange certificates of stock, and indemnity
against loss The parties rested in the belief
that these proceedings were according to law
and the securities were negotiated in good
lalth, ana The city received the benefit of them
so far as the corporate authorities could yatify
them, they haVedOne il, by n series of unmistak
able acts-by voting to levy taxes redeemin q
"a portion of the scrip first issued and en-
lchlnging the residue for new ones: issuing
scrip in settlement ofunpad interest and SELF
ing the securities obtained from the comn4nv
by way ofindemnity.
The city, also, in pursuance of an ex. ,rcss
act OF the legislature, evidently passed to pro
tect the very interests created by its subscriD-
ton to the capital stock of the road elected
a commissioner to represent it in tn. meeting
OF the board of directors, vote for its share OF
stock, and exercise general oversight over
us affairs in connection with the road But it
Is insisted upon that The holders of these bonds
or scrip, which is the form the securities as
Sumed, cannot recover, because the common
council, in submitting to the legal voters the
question OF whether a tax of one hundred and
nifty thousand dollars should be levied and
collected to aid the Kcnosha and Beloit rail
DAD, declared by ordinance, that the question
| was SuDLlllic u Ill accordance with the nrOViS-
ions of section of IAN act to amend the char
ter OF the city," approved March %. 1858 and
section "A of "An act to incorporate the cifv,;
approved Feb. 8, 1850. It is unneccessorv TO
quote the latter named section, as the consid-
Grafton of the first one is alone material TO the
subject Of this inquiry.
Section OF the amended charterauthOriZes
the city council OF KenOsha to levy and col
lcct special taxes to an, amount, or for any
purpose, which may be considered essential to
n a ~ nGap =
city, and it is contcnded that it is in conflict
| with the third section of the eleventh article
OF the Wisconsin constitution and that the
pl oceedingS of the common council under if
cannot be sustained. The Wisconsin copsti-
tuition provides that the legislature in orran-
ling municipal corporations shall restrict
their power TO tax, assess, borrow money. con
tract debts, and loan their credit The pro.
vision was wise one, and has undoubtedly
TENDED to prevent abuses on the part of incor-
and raising money.
| The supreme court of the state in the inter
probation OF the foregoing provision of the
constitution, (Foster VS.. city of Kenosha. u
Wis, 6l6,) has declared that the legislature
lcould not confer on a municipal CORPORATION
unlimited power to levy taxes and raise mon
ey, beyond what was proper for purely mu-
nlclpal purposes and this was attempted TO
be done in section Of the amended charter of
the city of kenosha that the taxes levied un-
railroad
were unauthorized, and the city authorities
could be restrained from collecting them. AT
the instance of party interested This is the
lextent OF the decision. The learned court ey-
pressiy declined 10 decide whether the scrip
issued by the common council 10 aid he road
was valid or not.
In fact, the whole decision is based on the
unconstitutionaily of sec 8 above referred to
which, as Il purported 10 confer upon the city
unlimited powers to lew taxes and bOrror
money. of Z ho =
the state. The court say that ''the suit was by
Foster in his own behalf and in behalf of 9th
er land owners, to restrain the city of Keno
sna from collecting special tax of
$500, levied by the city upon the real estate
therein situated Tor the purpose OF paving a
debt originally contracted by the stock sub
scrlptlons OF the city, to the Kenosha and Be
lott railroad company" This is all that ap-
pears in the report of the case as to the char
dcter OF the suit. 1t is apparent that the spec.
ial act of the legislature authorizing the sinh
scrlptiOn, and the further amendment to the
charter OF the city substantially ratifyinU If
were not before the court They are NOT re-
TERED to IN the opinion oi the court, and the
lfar presumption is, that they were not re-
lferred to in the pleadings as the purpose
which the complainant had in view. did NOT
Irequire that they should be. We are therefore
unembarrassed by any adverse decision upon
the character OF the securities in suit, and the
lquestion of their validity is an open one for
discussion and decision.
1t Is manifest that the common council of
henosha did not attempt the exercise of the
unlimited power to raise money, conferred on
them, because they limited the amount to he
raised to the exact sum which the legislature
by an express act authorized. UNDER the pro.
visions OF this act, ample power was given to
accomplish the object which the CITY had in
yleW-aiding to build a railroad which would
bring trade and travel to it. By the very
terms of this act, the subscription of $3.50 OOD
could be made and taxes levied to pay for it,
If the people voted in favor of it. 1t is con
Iceded, If the submission had been made in
words under the special act, instead of the
amended charter, all controversy would be at
an end.
1t is argued, Notwithstanding there was
complete authority TO raise the money and
levy the taxes under valid law, yet, as the
common council IN taking the vote named Il
provision OF their charter, which is invalid, that
therefore not only the payment of the tax can
be avoided, but also the payment of the scrip
Whether this position is well taken or not
the necessities Of the case do not require to be
decided, for in our opinion, subsequent legs-
llation has cured all antecedent Irregularities
In 1857, after the scrip had been issued 30
the ralload company, under the proceedings
of the common council, the legislature passed
a revised charter for the city. Among other
things, provision was made for the election OF
a railroad commissioner, annually, as a city
officer There had been previous legislation in
relation to this officer, but his duties and DOW
ers by the revised charter were much enlarged
He was constituted, ex-oficio, member OF
the board of directors OF the Kenosha aud Be
lott railroad, with power of voting as an indi-
viduai stakeholder, and in addition was re-
| CURED to receive from the city treasurer all
moneys which were paid on account of the tax
Tor the road, and commanded to redeem all
scrip which had been issued to the company
as the same became due making such proyis
IONS Tor 1t, or recommending such measures to
the common council as he should deem nee
city. - NV
This is not in terms curative act, but if has
that effect by fair implication. 1t is not
doubted the legislature could by direct act
OF confirmation, legalize the issue of his scrin
Notwithstanding the submission of the cues
ton to the vote of the people, Was under the
wrong law. If by direct act eouaIIv ~, go