Source: https://supreme.justia.com/cases/federal/us/112/261/
Timestamp: 2019-04-24 11:58:17+00:00

Document:
That construction of a statute should be adopted which, without doing violence to the fair meaning of the words used, brings it into harmony with the Constitution.
A municipal subscription to the stock of a railroad company, or in aid of the construction of a railroad, made without authority previously conferred, may be confirmed and legalized by subsequent legislative enactment, when legislation of that character is not prohibited by the Constitution and when that which was done would have been legal had it been done under legislative sanction previously given.
Suit upon county bonds. Judgment for plaintiff. Writ of error to reverse it. The facts are stated in the opinion.
"in pursuance of an act of the legislature of the State of Mississippi entitled 'An act to aid in the construction of the Grenada, Houston & Eastern Railroad,' now Vicksburg & Nashville Railroad, approved February 10, 1860, and of an act amendatory thereof, passed March 25, 1871, and in obedience to a vote of the people of said county at an election held in accordance with the provisions of said acts."
The county disputes its liability on the bonds or coupons, although the plaintiffs, who are defendants in error, became holders for value without notice of any defense except such as the law implies. The defense rests mainly on the ground that the subscription was made and the bonds issued without previous legislative authority conferred in conformity with the Constitution of Mississippi.
The history of the issue of these securities, as disclosed by legislative enactments, the proceedings of the board of supervisors of Grenada County, and the bill of exceptions, is substantially as will be now stated.
Alabama line, and with authority to connect or consolidate with any other company upon such terms as might be mutually agreed upon, not inconsistent with the laws of the state. Laws Miss. 1859, 1860, pp. 394, 402. By the Act approved February 10, 1860, the Boards of Police of Yallobusha, Calhoun, Chickasaw, and Monroe Counties were authorized for their respective counties to subscribe, upon such terms as they saw proper, to the capital stock of the company in an amount not exceeding $200,000 for any one county, to be paid by taxation, provided a majority of the qualified electors voting at an election held for that purpose, upon due notice, should first assent thereto, in which event it was made the duty of the board to make the subscription. Ib., 412.
"The legislature shall not authorize any county, city, or town to become a stockholder in or lend its credit to any company, association, or corporation, unless two-thirds of the qualified voters of such county, city, or town at a special election or regular election to be held therein, shall assent thereto."
On the 9th of May, 1870, the County of Grenada was created out of parts of Yallobusha, Tallahatchie, Carroll, and Choctaw Counties. Laws Miss. 1870, p. 124.
"all such elections when held shall be conducted in all things as required in the act of which this is amendatory, and of the Constitution and laws of this state in force at the time so held."
The fourth § authorizes the board of supervisors of any county voting the tax to issue bonds, maturing at such times, not beyond ten years, and for such sums, as the board deemed necessary, to pay off the subscriptions of said counties, respectively, for capital stock in the Grenada, Houston & Eastern Railroad, the bonds to be signed by the president of the board of supervisors issuing the same, and made payable to the company and their successors and assigns. The sixth section provides that bonds may be issued with interest coupons attached, and, when issued, paid over and delivered to the railroad company in satisfaction of the subscription to the extent of the principal of the bonds, the board taking from the company certificates of stock for the shares paid for, and the stock to be deemed the property of the municipality paying for it.
for and on behalf of Grenada County, to be met and paid by taxation as aforesaid,"
"for a long time previous to said vote, a scheme had been agitated in said county for such a railroad, with its termini at Vicksburg and Grenada, as well as for the construction of the Grenada, Houston & Eastern Railroad, . . . and on the 3d day of January, 1872, the projectors and managers of the railroad, so designated and intended in said vote, were incorporated by an act of the legislature entitled 'An act to incorporate the Vicksburg, Yazoo Valley & Grenada Railroad Company.'"
By an Act approved January 27, 1872, the Grenada, Houston & Eastern Railroad Company was authorized to extend their road from Grenada via Yazoo City to Vicksburg, thus enabling it to cover the route proposed to be occupied by the so-called Vicksburg & Grenada Railroad, or the Vicksburg, Yazoo Valley & Grenada Railroad. By the same act, the name of the Grenada, Houston & Eastern Railroad Company was changed to that of the Vicksburg & Nashville Railroad Company, giving the company all the rights by the latter name which it had under its old name.
of the Vicksburg & Nashville Railroad, the extension specified in this act from Grenada to Vicksburg, and when, after such acceptance and adoption, the said so-called Vicksburg & Grenada Railroad shall form and constitute a part and portion of the Vicksburg & Nashville Railroad, and shall be constructed, owned, and held by the Vicksburg & Nashville Railroad Company, and it shall be lawful for, and it is hereby made the duty of, the board of supervisors of Grenada County, through the president of said board, upon the application of the president or other authorized agent of the Vicksburg & Nashville Railroad Company, to subscribe for fifty thousand dollars of the capital stock of the Vicksburg & Nashville Railroad Company, based upon the submission to and the approval of the vote of two-thirds of the qualified voters of said county, which is hereby ratified and confirmed to the Vicksburg & Nashville Railroad Company so heretofore had on behalf of the Vicksburg & Grenada Railroad as aforesaid, and bonds of said county to secure the payment of said subscription for the stock and interest thereon, and also certificates of stock in said company shall be used as in other cases provided for in this act."
On the 5th of March, 1872, the Vicksburg, Yazoo Valley & Grenada Railroad Company was consolidated with the Vicksburg & Nashville Railroad Company, the articles of consolidation binding the consolidated company -- which retained the name of the Vicksburg & Nashville Railroad Company -- among other things, to construct the contemplated road from Vicksburg to Grenada.
stockholders' meetings of the company, and voted a stock subscription of $100,000. There has been no meeting of stockholders since 1874, nor of the directors since July 6, 1875. About five miles of the Vicksburg & Nashville Railroad westward from Okolona was graded and ironed. The iron so laid was purchased from plaintiffs, and they received in payment the bonds in suit.
Under the acts in question, assuming them to be constitutional, the county had authority, upon certain conditions, to make a subscription to the capital stock of the Grenada, Houston & Eastern Railroad Company, now the Vicksburg & Nashville Railroad Company, and its board of supervisors was invested with power to determine whether those conditions were performed, and, upon their being performed, to issue bonds in payment of such subscription. According to the settled doctrines of this Court, the county is estopped, as against the plaintiffs, to say that the conditions were not duly performed; for the recitals in the bonds import that they were issued in pursuance of the acts of 1860 and 1871, and in obedience to a vote at an election held in accordance with the provisions of said acts. Coloma v. Eaves, 92 U. S. 484; Buchanan v. Litchfield, 102 U. S. 278; Northern Bank v. Porter Township, 110 U. S. 608, 110 U. S. 617; Otoe Co. v. Baldwin, 111 U. S. 1. Upon this general question, there seems to be no disagreement between this Court and the Supreme Court of Mississippi. City of Vicksburg v. Lombard, 51 Miss. 126; Cutler v. Board of Supervisors, 56 Miss. 123.
existence after the Constitution of 1869 went into operation, it could not, even under legislative sanction, make a valid subscription to the stock of a corporation unless two-thirds of its qualified voters at a special or general election, assented thereto. That the legislature, when passing the act of 1871, had in mind the constitutional provision relating to municipal subscriptions to the stock of corporations, is plain from the second section of the act, which authorizes certain incorporated towns, including the Town of Grenada, to subscribe to the stock of the Grenada, Houston & Eastern Railroad Company, when such subscription should be approved by "a constitutional majority of two-thirds of the votes polled at an election regularly held" -- a provision which this Court adjudged, in Carroll County v. Smith, 111 U. S. 556, to be consistent with the Constitution of Mississippi. It cannot be supposed that the legislature intended to invest the Town of Grenada with power to make a subscription when assented to by two-thirds of the electors voting, and, in the same act, to invest the county with authority to subscribe upon the assent of a bare majority of the electors voting. And yet the argument imputes such diverse purposes to the legislature of the state, if the act of 1871 be construed as authorizing, in violation of the state constitution, a county subscription upon the assent of a bare majority of the electors voting. The act of 1860 required twenty days' notice of the election, of the amount proposed to be subscribed, and in what number of installments to be paid. These provisions were left untouched by the act of 1871. But the requirement in the latter act of conformity, in all things, to the Constitution and laws in force when the election was held implies that the legislature did not intend to authorize a municipal subscription upon the vote of a bare majority, but only upon the condition prescribed in the constitution -- namely a two-thirds majority of the electors of the county.
"General words in the act should not be so construed as to give an effect to it beyond the legislative power, and thereby render the act unconstitutional. But, if possible, a construction should be given to it that will render it free from constitutional objection, and the presumption must be that the legislature intended to grant such rights as are legitimately within its power."
"It ought never to be assumed that the lawmaking department of the government intended to usurp or assume power prohibited to it. And such construction (if the words will admit of it) ought to be put on its legislation as will make it consistent with the supreme law."
It is worthy of observation that the board of supervisors of Grenada County understood the act of 1871 as requiring conformity to the Constitution, for they were careful to make a record of the fact that the proposed subscriptions had been sustained by "a constitutional majority of two-thirds of the legal and registered voters of said county."
It results that in respect of such of the bonds in suit as, according to the evidence, were issued in payment of the subscription to the stock of the Grenada, Houston & Eastern Railroad Company, that there was valid legislative authority as well for the subscription as for the issue of the bonds; consequently the county is liable upon them.
that when that subscription was voted there was no such corporation as the Vicksburg & Grenada Railroad Company, but that the vote had reference to an organization or scheme, the managers of which proposed to construct a railroad connecting the cities of Grenada and Vicksburg; that these managers were shortly thereafter incorporated as the Vicksburg, Yazoo Valley & Grenada Railroad Company, which was subsequently, and before the bonds were issued, merged in the Vicksburg & Nashville Railroad Company. We have also seen that the Vicksburg & Nashville Railroad Company was empowered to construct a railroad from Grenada to Vicksburg, and by the term of the consolidation agreement with the Vicksburg, Yazoo City & Grenada Railroad Company obligated itself to do so.
"that the legislature may authorize a county or town to aid a railroad. That power was held to exist under the former constitution, and the present Constitution distinctly recognized it. "
"If it were not for the constitutional restriction, the legislature could authorize a county, city, or town to aid, in any of these modes, railroads, or other public enterprises, without the assent of the qualified voters."
"the measure of its power was the Constitution of December, 1869, and it could not ratify an act previously done, if at the date it professed to do so, it could not confer power to do it in the first instance. It could authorize a municipal loan conditionally. In order to ratify and legalize a loan previously made, it was bound by the constitutional limitation of its power."
given. Such statute is of the same import as original authority. . . . If the constitution had altogether denied to the legislature the delegation of such power to counties, cities, and towns, it is manifest that it could not vitalize and legalize a subscription made before its adoption, and without authority of law. If that be so, it follows that, in dealing with the subject at all, it is bound by the limitation of section 14 of article 12 of the Constitution."
"This is far from being an effort to impose a debt on the county without its consent. The agreement of the people of the county to incur the debt, in the precise shape which it assumed, has been expressed. Their representatives, the county authorities, in execution of that will, have delivered the bonds, and the legislature afterwards affirmed. If there has been any departure from the letter of the original authority, it acquiesces in such deviation, cures the irregularity, and makes valid the bonds. The principles announced in Supervisors v. Schenck, 5 Wall. 772, 72 U. S. 776, 72 U. S. 789, fully support these views."
These doctrines are in accord with the views of this Court as indicated in several cases. Ritchie v. Franklin, 22 Wall. 167; Thompson v. Lee County, 3 Wall. 327; City of Lamson, 9 Wall. 477, 76 U. S. 485; St. Joseph v. Rogers, 16 Wall. 644, 83 U. S. 663; Campbell v. City of Kenosha, 5 Wall. 194.
which the county can escape liability upon them to the plaintiffs, who are bona fide holders for value. Indeed, there is nothing of substance in the defense made by the county, beyond the question of legislative authority for the subscriptions, in payment of which the bonds in suit were issued, and passed to the plaintiffs for iron used on one of the proposed roads.
Other questions of minor importance are discussed in the very able brief of counsel for the county. But they do not, in our opinion, affect the right of plaintiffs to judgment, and need not be noticed.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.