Court Opinion

ID: 7984016
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:23:39.656146+00
Date Added: 2024-06-11T16:35:08.409863
License: Public Domain

SlMEALL, J. :
This is a proceeding by mandamus, instituted by the plaintiff in error, a corporation created by act of the legislature *834of 1867, to compel the treasurer to approve the bonds of the president and directors, and to compel the auditor and treasurer to receive into the state treasury, five thousand dollars.
The answer of these officers, sets up that they declined to accept the money and approve the bonds, because the charter of the plaintiffs conferred upon them a franchise to conduct and carry on lottery schemes, and to deal in and sell tickets therein, which is prohibited by the revised constitu-ion, and also, by the act of the legislature of 1870. To the answer, the plaintiffs demurred. The court held that answer sufficient in law, and dismissed the petition.
The conditions precedent, which must be fulfilled before a right to utilize the franchise inures to the incorporators, are: The payment into the state treasury of five thousand dollars for the use of common schools, and the approval, by the treasurer, of the bonds of the president and directors.
An offer to pay the five thousand dollars into the treasury, was made the 18th of October, 1869; but at that time, no bonds were presented for approval. On the 2d of May, 1870, a letter was addressed, by the plaintiffs, to the auditor and treasurer, reciting the former tender of the money, and expressing a readiness then to comply with the conditions of the charter, by payment of the money and exhibition of bonds for approval, and proposing to comply with all the terms precedent to their right to begin business. No response was made to these proposals ; but, prior thereto, the constitutional prohibition, as well as the act of the legislature against drawing lotteries or selling tickets, had gone into effect, and annulled the lottery feature of the plaintiffs7 franchises, unless, as is contended in their behalf, it is void as to them, because it impairs the obligation of the contract between the state and themselves, as embodied in the charter.
It was settled in the case of Dartmouth College v. Woodward, 4 Wheat., that the “ contract ” which a state may not impair, may as well be contained in a charter granted by *835itself, or by the proper authority, during the collonial period as the private agreements of individuals with one another. As yet the judiciary have not been able to define any definite rule by which legislation impugned as conflicting with the constitutional prohibitation, may be tested. It may be impossible to do so. The constitution on this subject ought, in many cases, to be read and considered in connection with an ancient principle of the common law, which is thus stated, Brewster v. Kitchen, in 1698, reported in 1 Salk: “If A covenants not to do an act or thing, which ivas lawful to do, and an act of parliament comes in after, and compels him to do it; the statute repeals the covenant. So if a covenants to do a thing which is lawful, and an act of parliament comes in, and hinders him from doing it, the covenant is' repealed.” It would be safe to say that all legislation which’ has the effect of impairing the contract, is not obnoxious to the constitutional prohibition. If the operation of the statute be but incidentally to impair the contract, when it is passed with reference to a totally different subject, altogether diverso intuitu it may be upheld. To illustrate, if a contract should be made to erect a wooden structure, in a densely populated city, and a statute should come in, and forbid the building of such a house, it would be a case where the covenant would be discharged; this, by the policy of the law, would be to guard against conflagration by fire, and would manifestly be for the good police of the town. Yet incidentally, it destroyed the obligation of the contract.
So, too, if a contract were made to build a house upon a certain spot of ground, and afterwards the legislature or competent muicipal authority, should lay out a public road over the ground, here the public convenience must yield or this contract be annuled.-
If all legislation must fall under the condemnation of this constitutional prohibition, that might, and did incidentally, have the effect to impair the obligation of contracts, legislative control over internal police, and morals would be so hampered and circumscribed, as that its practical value would *836be seriously embarrassed. In Pres. Church v. City of New York, 8 Cow., 539, there was a covenant for quiet enjoyment, in a grant of the premises on the condition “ that a church should be erected thereon, or they should be used for a cemetery but never for private secular uses. Subsequently the city prohibited the use for a cemetery. It was held that the city ordinance, “ repealed the covenant.” The city had the right to ordain proper wholesome police regulations for the public health, and this private covenant, must yield to the paramount public good. It may not be inappropriately said, that individuals must be considered as making their covenants and contracts, subject to the contingent right in the state, within the just application of the principles we are discussing, of partial impairment, or entire abrogation.
But courts should carefully guard against pushing the doctrine beyond its reason. The prohibition is addressed to the state, and applies to all the forms that the state may employ as law-giver, whether in convention framing organic law, or in its ordinary legislative capacity passing statutes.
If this charter rvere granted exclusively to subserve some public purpose, as to raise means to promote common schools? it would not, Avithin the intent of the constitution, create a contract between the corporators and the state. But the legislative power would be complete, either to amend or abolish. The corporation would be but the instrumentality to accomplish a policy. Although the first section declares that the object of the charter is for the benefit of common schools, there is coupled with it a right to make private gain. The $5,000 00, and one-half of one per cent, on the sale of tickets, to be paid into the state treasury for common schools, is the consideration upon which the corporation is permitted to draw lottery schemes, they retaining all else as their share of the profits. The mere enactment of the charter, does not constitute a contract. The state says in the charter to the corporators,,- “ organize by the election of officers, execute the bonds to comply with its injunctions, pay into the state treasury the *837$5,000 00 for the schools, and then you may begin business and use your lottery franchise. ” Upon compliance with these terms, a contract between the state and the corporators would have been consummated. Until complied with, there is no restriction upon the legislature resuming the franchises or forbidding their use.
The state may take away by statute what has been given by statute, unless rights under it have vested. If the legislature delegate authority, it can revoke it if nothing has been done under it which creates a vested right.
A pointed illustration is found in the C. & L. Railroad Company v. Kenton county, 12 B. Monroe, 148. The legislature had authorized Kenton county to subscribe to the stock of the company, upon an approving vote of its electors. A vote in favor of subscription and to impose the tax was had, but the county court refused to subscribe and levy the tax. The company applied for a mandamus, which was refused. An appeal was taken. Pending the appeal the law was repealed. The court held, that upon the condition of facts before the inferior court, the mandamus ought to have been granted. But inasmuch as the county court had not made the subscription, and levied the tax, no right had absolutely vested in the company before the law was repealed. Its judgment was affirmed.
If that doctrine is sound, as applied to a corporation., created to develop wealth, and advance civilization, a fortiori'' must it be approved when invoked to shield the community from a project which is only evil, and that continually. Also McQueen v. Jones, com’r, 6 Wisconsin, 334.
The authorities are abundant that the legislature may re - peal a lottery grant, unless contracts, have been made, or rights vested, as between the grantees and other parties, which would be infringed by the repealing law. Gregory’s executors v. Trustees of Shelby College, 2 Metcalf (Ky.) R., 598; State v. Hawthorn, 19 Missouri R., 391; State v. Freleigh, 8 Missouri R., 614.
There seems to be no disagreement in the authorities, that *838if no money or other consideration is paid for the license or grant, it is open to repeal by subsequent statute.
There are authorities that assert the doctrine that the prohibitory clause of the constitution does not affect the power of the state to enact general police regulations for the preservation of the public health and morals. It was said by Marshall C. J., in Dartmouth College v. Woodward, “ that the framers of the constitution did not intend to restrain the states in the regulation of their civil institutions adopted for internal government.”
On the ground, therefore, that lotteries were of pernicious and demoralizing influence in the community, some of the . courts, without regard to the fact that the grantee had' paid a bonus- to the state, have supported the validity of repealing legislation. 3 Parson on Cont., 556 and notes.
But it is not necessary that we should go this far. In determining constitutional questions, the proper, and we think it the safer practice, is to confine ourselves strictly to the questions of law that arise on the facts of each case.
If the plaintiff had made a formal tender of the five thousand dollars to the treasurer, and had presented for his approval unimpeachable bounds, before the repealing laws took effect, these laws would have swept away his franchise; for it would not be predicated that a contract had been perfected before the business was made unlawful.
But the facts are by no means as full and strong as these. Before the prohibition of the constitution and statute, the plaintiff had done no more than make his tender of the money in 1869. It was after the adoption of the constitution and prohibitory statute that the bonds and money were offered. Both the payment of the money and the execution of the bonds, were conditions precedent to the enjoyment of the franchise.
The prohibitory laws have deprived the plaintiff of no vested right, nor impaired the obligation of a contract.
Wherefore the judgment of the circuit, court denying a per-emptery mandamus, is affirmed.