Court Opinion

ID: 6564966
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:19:05.930418+00
Date Added: 2024-06-11T13:31:42.605600
License: Public Domain

BeNNett, J.
-The complainant in this action asks that the defendants, the treasurer of Yankton county and the county of Yankton and its agents, may be perpetually enjoined from collecting a certain tax levied to pay the interest on certain bonds, alleged to have been issued by the commissioners of said county to the Dakota Southern Railroad Company. To the complaint, defendants interpose a general demurrer, which was sustained by the court below, and plaintiff appeals. The questions presented by this appeal involve the validity and legality of the bonds, and the liability of the county of Yank-ton thereon.
I desire to state without enlarging on them, a'few elementary principles, which I regard as underlying the ultimate questions to be determined. A municipal corporation is de*248fined to be a public corporation, created by government for. political purposes, and having subordinate and local powers of legislation: e. g., a county, town, city, etc. (Bouvier’s Law Dic.)
A municipal corporation possesses, and can exercise, the following powers, and none others: First, those granted in express words; second, those necessarily implied, or necessarily incident to the powers expressly granted; third, those absolutely essential to the declared objects and purposes of the corporation — not simply convenient, but indispensable; and any fair doubt as to the existence of a power, is resolved, by the courts, against the corporation and the existence of the power. (Vincent v. Nantucket, 12 Cush., 103; Clark, Dodge & Co. v. Davenport, 14 Iowa, 494; Clark v. Des Moines, 19 Iowa, 199; Mintum, v. Larne, 23 Howard (U. S.) 435; Bunk v. Chillicothe, 7 Ohio St., 31; Sharp v. Spear, 4 Hill, 76.)
A county is strictly a political corporation — a granted power to a designated portion of the people, to aid and arrange the machinery of government of the whole state or territory. It is not designed for pecuniary profit, nor has it any powers but such as pertain to its strict municipal and public character. (Jefferson County v. Ford, et. al., 4 G. Green, 367.)
Agents and officers of a municipal corporation cannot bind the corporation by any act which transcends their lawful or legitimate powers. And this rule applies to the issue of negotiable as wellas unnegotiable evidences of debt. (Mayor of Albany v. Cunliff, 2 Coms’t, 165; Hodges v. Buffalo, 2 Denio, 110; Boyland v. The Mayor and Aldermen, 1 Sand’f, 27; Dill v. Wareman, 7 Metc, 438; Vincent v. Nantucket, supra; Wood v. Inhabitants of Lyon, 1 Allen, 108; Mitchell v. Rockland, 45 Me., 496; Western College v. Cleveland, 12 Ohio, 375; Commissioners v. Cox, 6 Ind., 403; Estep v. Keokuk County, 18 Iowa, 199; Clark v. The City of Des Moines, supra.)
The duties and powers of the officers of a municipal corporation are prescribed by the statute, and every person dealing with them as such, may know, and is charged with the knowledge of the nature of their duties and extent of their powers. (Delafleld v. State of Illinois, 2 Hill, 159; Supervisors v. Bates, *24917 N. Y., 242; Butterfield v. Inhabitants of Melrose, 6 Allen, 187; Zabriskie v. Cleveland, etc., Railroad Co., 23 Howard, 398; Clark v. The Chip of Des Moines, supra.)
We will save ourselves much confusion and unnecessary perplexity by bearing in mind the broad distinction between an irregular exercise of granted power, wherein a corporation acts within the range of its general authority, but fails to comply with some formality or regulation it should not have neglected, but which it has chosen to disregard, and the total absence or want of power.
The point on which the decision of this case, in my judgment, must turn, as presented by the record, is hot as to any irregularities in the exercise of an unquestioned power, but had the county of Yankton, a municipal corporation under the laws of the territory, power and authority to vote aid to the Dakota Southern Railroad Company, and issue its bonds therefor. If so, when and by what act was it conferred? Its existence cannot be presumed; it cannot be inferred as absolutely essential to the declared objects and purposes of county organization and government, which do not include the building of railroads. We can find it only, if it exists at all, in the so-called act of the Territorial Legislature, approved April 21,1871, and the act of Congress, entitled “An act in relation to the Dakota Southern Railroad Company,” approved May 27, 1872. It is not necessary for me to notice the question as to whether the Territorial Legislature or Congress has the power to authorize a municipal corporation of this Territory to vote aid and issue its bonds to a railroad company, but upon the theory that one or both has the power, has it been done in this case?
The Territorial Legislature is a creature of Congress; its powers, duties and sessions are defined and limited by the act organizing the territory, and the amendments thereto, and it derives no life or power from any other source. It is authorized to hold a biennial session of not to exceed forty days, and there is no provision empowering any one to call, or the members to meet in extra session, or to extend the session beyond the time specified.
*250This so-called act of the Territorial Legislature was passed at what was termed an extra session of that body, it formerly having convened in regular session, and remained in session during the limit of forty days, when it had adjourned, without day, and ceased to be a legislative body, and the so-called extra session was unauthorized and illegal: its acts and proceedings were void, a nullity, and of no more binding force and effect than the resolutions of a town meeting, or the pro ceedings of a territorial convention. Hence no power whatever was or could be conferred on the county of Yankton by any act that it might undertake or assume to pass. But the act of Congress of May 27, 1872, is claimed to be a curative or legalizing act. “ Legalizing a legislative enactment,” is a phrase that may strike most persons as strange and anomo. lous. I need not stop to consider whether Congress might not have legalized the call for, and convening of that body in extra session, and thereby have made it a legal legislature, for this it has not attempted to do. It therefore follows that if it was a self-constituted unauthorized body, possessing no legislative power, no authorized act by competent authority has since changed its character. ,
It is a general principle, that when an act, proceeding or transaction, is void, and not merely voidable on account of some formal defect, it cannot be cured by legislative action. (Sedgwick on Construction of Statutes, 143, (n.)
As we have seen, the acts of this assumed Territorial Legislature were not merely voidable by reason of some formal defect, but were absolutely void, and I apprehend that Congress does not possess sufficient power, which would have to be something approaching omnipotence, to breathe into them the spirit and life of law. It would be like breathing vitality into airy nothingness — giving form and being to that which in contemplation of law had no existence. But it may be insisted that Congress recognized this as a valid act of the Territorial Legislature, Admit that it did: can Congress by a simple recognition of that as a fact which is a falsehood— as a substance which is even less than a shadow, accomplish that which it could not by positive enactment? The proposition certainly needs no refutation.
*251But admitting the fullest power on the part of Congress to legalize the act of this illegal body, and to give to it the force and effect of law, the question arises, has it done it? There is no reference whatever in the act of Congress to any illegality in the supposed act of the Territorial Legislature, and no intimation whatever as to any illegality or want of power on the part of the body that passed it, but on the contrary it is treated throughout simply as an ordinary act of a regular Territorial Legislature. This appears more clearly from the very wording of the statute. The first sentence designates it as “ the act passed by the Legislative Assembly of the Territory of Dakota,” and again “ the provisions of the act of said Legislative Assembly,” and the first proviso in the section requires said railroad company to construct and complete its road * * “ in accordance with the laws of said territory, approved April 21, 1871.” Then what is the clear and obvious purpose and intent of Congress? 'Primarily to disapprove and annul that act, but providing that so far as the same authorized, and for the purpose of validating any vote of aid and subscription to the Dakota Southern Railroad Company, said act is declared to be and remain in full force, but no further, and for no other purpose whatsoever. What is that but simply annulling an act recognized to be valid, and saving its application to, and operation in, a particular, specified case? The saving clause was made necessary by the annulling provision.
Congress did not propose that this kind of legislation' in a Territory should stand, but did not desire to invalidate acts that had already been done under it, or that might thereafter be done with reference to that one particular project. What is there in this law of Congress that can possibly be construed as legalizing the unauthorized acts of that self-constituted body, or giving to that, the force and effect of law, which before was a mere nullity? I am certainly unable to so construe it, without doing violence to its letter and spirit, and to every known principle of construction. It left that so-called act just where it found it; if it was invalid before, it was invalid after.
*252It has been suggested that admitting the Territorial act to be a nullity and in- no sense a law, yet the act of Congress is alone sufficient to sustain the validity of the bonds, having conferred the necessary power on the county and authorized their issue. I regard this position as entirely untenable. Will any one pretend that that could have been the intent of Congress, as gathered from the wording of the statute? I think not. And further its provisions are wholly inadequate for so sweeping a purpose. It does not undertake to confer any power or authorize the issuance of bonds; it takes for granted that that had been done, but the supposed act which Congress regarded as having accomplished these purposes, having fallen to the ground, all the provisions in the act of Congress relating thereto must go with it.
I, therefore, conclude that at the date of the transactions alleged in the complaint, no power had ever been conferred, either by Congress or the Territorial Legislature, upon counties or other municipal corporations of this Territory to aid in the construction of any railroad or issue its bonds to any company for that purpose; and in the absence of such grant of power, either express or by clear implication, it did not exist.
There being from this view of the case, as presented by the record, a total want of power on the part of Yankton county to extend, in any manner, aid to a railroad company, it follows that the election held in that county on the second day of September, 1871, at which the question of aiding the Dakota Southern Railroad Company was submitted and voted on, was unauthorized, illegal and a nullity, and all subsequent acts done and performed pursuant to that vote were void. The county possessing no power to contract that kind of an indebtedness, it is clear the commissioners could not bind the county by issuing what purported to be its bonds; and the county having no authority, originally, to authorize their issuance, it could not ratify the act after it was done; they are therefore void, even in the hands of innocent holders, and the collection of the tax levied to pay the interest thereon, should be perpetually enjoined.
*253With the question of good or bad faith on the part of the county, and the hardship to the innocent holders of these bonds, I have nothing to do. Were this a case in which the power in the county was unquestioned, and involved only irregularities in its proper exercise, such considerations could be urged with grpat propriety, and would be entitled to much weight. But that is not the case. It is certainly well that in this early period of the history of our Territorial jurisprudence, the limit of the power of municipal corporations should be carefully defined and guarded. That those who deal with them should understand that they are charged with the knowledge of the nature and extent of the powers and duties of these corporations and their officers; and that they need not expect to go upon the markets and purchase, blindly, what purports to be their bonds and other evidences of indebtedness, issued without authority of law, and find courts of justice ready to enforce their payment, on the ground simply that they are in the hands of innocent holders, and with the mad-dog cry against repudiation of spurious securities, which in contemplation of law, the corporation never issued.
Municipal corporations are the creatures of the statute; they have no powers except such as are conferred; they can do no act unless authorized. And any act done, which transcends their lawful or legitimate powers, or which they are not authorized to do, is simply not the act of the corporation, and there it ends; and against any legal proceedings instituted thereon, it may interpose the plea of ultra vires. The sooner these well settled principles are thoroughly understood and acted on, the better it will be, both for the corporations, and those dealing with them.
I desire to notice briefly one other point, which I deem sufficient in itself to warrant my conclusions in this case. Admitting that the act of Congress rendered valid the Territorial act, and legalized all proceedings had thereunder, did it not do more? The pretended Territorial act provided that aid might be extended to any railroad company, in one of three ways: 1st, by donation; 2d, by loan of credit; 3d, by subscription to capital stock.; It is alleged in the complaint *254that the voters of Yankton county, voting at the election held September 2, 1871, voted to extend the aid of the county to the Dakota Southern Railroad Company, by a donation or gift to the amount of two hundred thousand dollars, in the bonds of the county. Now the last proviso in the second section of the act of Congress, reads as follows: “That said Dakota Southern Railroad Company shall issue to the respective counties and townships, voting aid to said railroad, paid up certificates of stock in the same, in amounts equal to the sums voted by the respective counties and townships.” This provision clearly requires the company to issue paid up certificates of stock, and as clearly requires the county to receive and accept them, and by implication prohibits the extending of aid to railroad companies, by counties and townships, by way of donation or loan of credit. There is no pretense that Yankton county has ever voted to subscribe to the capital stock of said company. The bonds were issued after the passage of the act of Congress, and it no where appears from the record in this case, that the county has ever assented to the change made in its contract with the company, or ever ratified the acts of its commissioners. If the county can be bound at all it must be in manner provided by the act of April 21, 1871, and the only method therein pointed out, is by the voice of the people expressed through the ballot box; and after it has made its contract, as therein directed, I know of no earthly power that can change it, against the will of the county. It may be said that the change was in the interest of the county, but that matters not; parties to contracts must be the judges as to what is their interest and what not. The county may think very differently on this point. This provision if accepted made the county a stockholder in said company, with all the liabilities and responsibilities which attach under the provisions of the statute of the Territory, under which said company was organized and incorporated, and these may be of such a character that no county would desire or wish to assume them. This Yankton county virtually refused to do by voting aid by way of a gift or donation. There is just one wayNqf escaping the logical *255conclusions to winch, we are driven, and that is by holding that the people of a county are entitled to no voice in determining the nature, character and amount of the pecuniary liabilities with which they are to be burdened. When that point is reached, despotism will have displaced law, and arbitrary power will make and construe its own decrees.
The judgment of the court below, sustaining the demurrer, is reversed, and the cause remanded.
REVERSED.
Separate OPINION of Associate Justice BarNes:
I think the judgment sustaining the demurrer in the court below must be reversed and judgment entered for the plaintiff as demanded in the plaintiff’s complaint. I am entirely unable to'satisfy myself that Congress has the.power to authorize an organized county in a Territory to vote aid to a railroad corporation either by loan of its credit, by donation or by subscription to its capital stock, and then authorize the levy of a tax to pay the interest and ultimately the principal of the bonds issued to said railroad company. I am aware that this class of legislation, when exercised by a sovereign State, has been upheld both by,the State and Federal courts.
From an examination of the authorities bearing on this question, it will be found that the decisions are based upon the fact that the State being sovereign there is no limit to the power of taxation, except only that the tax must be intended for a public purpose, and except that the taxation must not be so enormous as substantially to amount to confiscation.
The sovereign State possessing this power of taxation, it is held that the question of the issuance of bonds, and the levy of a tax, may properly be submitted to the electors of the town, county or municipality particularly interested in fh.e proposed public improvements. (See Bridgeport v. Railroad Company, 15 Con., 475; 21 Penn. St., 148; Railroad Company v. Clinton County, 1 Ohio St., 77; Ryder v. Railroad Company, 13 Ills., 516; Radfield on Railways, 534; 10 Wis., 195 and 271; Whiting v. Sheboygan & Fon du Lac Railroad Company, 25 Wis., 167, and the numerous cases therein cited.)
*256The taxing power of a sovereign State, except as limited by the State or United States constitution, is limited in extent only by the will of the government itself. No limitation or restriction upon the exercise of this power can be raised by implication, but the intention to limit or abridge must be expressed in clear and unambiguous language. (Cooley on Taxation, 66; 7 Wall, 71.)
All definitions of taxation imply that it is to be imposed only for public purposes, and whatever difference of opinion may exist regarding the admissibility of taxation in particular cases, the fundamental requirement that the purpose shall be public will be conceded on all sides.
And upon an examination of the authorities above referred to, it will be seen, the unlimited and sovereign power of a State to levy tax for all public purposes, is conceded; but the troublesome question has been to find some substantial reason for holding that railroad corporations, owned by private persons, controlled and managed in the interest of private parties, were public improvements of that kind that authorizes the exercise of the taxing power of the State in taking the private property of individuals to aid in their construction.
I will not comment upon the serpentine process of reasoning by which this extraordinary taxation is upheld. It is sufficient to say this legislation is sustained by the courts, because not forbidden by State constitutions.
We now examine the Constitution of the United States, not to ascertain whether this class of legislation by Congress is prohibited by that Constitution, but to ascertain whether this power is expressly conferred by the people or the States, upon the general government; or, is this highest and sovereign power of extraordinary taxation plainly implied from any specific grant of power to the general government. Cooley on Constitutional Limitations, page 173, says: “ The government of the United States is one of enumerated powers; the governments of the several States are possessed of all general powers of legislation.” When a law of Congress is assailed as void, we look in the National Constitution to see if the grant of specified power is broad enough to embrace it; but when *257a State law is attacked on the same ground it is presumably valid in any case, and this presumption is a conclusive one, unless in the Constitution of the United States or of the State we are able to discover that it is prohibited. We look in the Constitution of the United States for grants of legislative power, but in the Constitution of the State to ascertain if any limitations have been imposed upon the complete power with which the legislative department of the State was vested in its creation. Congress can pass no laws but such as the Constitution authorizes, either expressly or by clear implication. While the State legislature has jurisdiction of all subjects on which its legislation is not prohibited.
The law-making power of the State recognizes no restraints, and is bound by none, except such as are imposed by the Constitution. (See 15 N. Y., 333; 27 Barber, 593; 4 Mich., 244; 17 Penn. St., 119; 52 Penn., 477; 17 Cal., 547.)
There must be distinct legislative authority for every tax that is levied. This is a principal that admits of no exception whatever. (Cooley on Taxation, 242; Morris v. Russell, 5 Cal., 449; 44 Ills., 85.)
Subdivision 3 of Article 4. of the Constitution of the United States, contains this provision: “The Congress shall have power to dispose of, and make all needful rules and regulations respecting the territory or other property belonging to the United States.”
Section 2, Article 2, contains this provision: “The President shall have power by and with the consent of the Senate to make treaties, provided two-thirds of the Senators present concur.”
Section 8, Article 1, contains this provision: “That Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense, and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States.”
The foregoing is the only express grant of power to Congress, to levy and collect taxes, and I think it will not be claimed that this provision of the Constitution would authorize the levy *258of a special tax to aid in the building of a railroad, should the same be voted by the electors in one of the organized counties in an organized Territory.
While there may be a question whether the provision of section 3, of article 4, above referred to applies to territory acquired by treaty, subsequent to the adoption of the Constitution, I do not think it necessary to inquire. That the territories of the United States belong to the people of the United States, is a proposition so plain that no argument in support of it is necessary.
The general government hold these territories of the United States, whether acquired by treaty or otherwise, in trust for the people, whom the general government represent and act for, just so far as the general government is expressly or by clear and unmistakable implication authorized to represent the will and protect the interests of the people. Here, then, is sufficient power to authorize Congress to provide a territorial government for the people of the Territory, with usual and ordinary powers of legislation, not exceeding the powers delegated by the people to Congress. Congress acting in the interest of the people, has the power to prescribe needful rules and regulations for the government and settlement of the territories, and the disposition of the public lands in these territories. These territories are governed and must be governed in the interest and for the benefit of the sovereign people. Acting upon this authority, public lands have been surveyed, sold and conveyed to private persons. The purchasers and owners of these lands are entitled to the same protection, and hold substantially the same relation to the taxing power, that they would if these lands were embraced within the boundaries of a sovereign State. These lands have been sold by the government, representing the people, and the government has no more interest in or control over these conveyed lands than the lands of any individual in a State; and I am entirely unable to discover any theory upon which we can uphold the law of Congress authorizing the electors of Yankton county to vote aid by subscription, or otherwise, to aid in the building of the Southern Dakota railroad, and *259authorize the levy of a tax to pay the subscription, unless we are prepared to go to the full extent of holding, that the government of the United States is not a government possessing no powers except such as are delegated or granted by the people or the States, but is in fact a government of unlimited and sovereign power; and because a government of unlimited and sovereign power, may authorize the taking of private property to aid in any and all public enterprises, without limit or restriction, so long as the tax is not so excessive as to amount to confiscation.
It is well to observe here that this law of Congress in no way acts upon, or affects, the public lands in this same county. This is not general legislation for the people of the United States, nor is it legislation with reference to the property or rights of the United States, nor is it general legislation ih the interest of the Territory of Dakota. It is a class of legislation that has greatly troubled legislators and courts, properly to name or define. It is legislation authorizing the taking of private property of taxpayers in certain counties, and delivering it over to a corporation to expend in the building of a railroad owned by private parties, exclusively, the use of which the public may enjoy by paying full compensation. This is the exercise of the highest and probably the most dangerous sovereign power, only upheld where there is no limit upon the taxing power, except that the purpose shall be public. It is reversing the order of Congressional legislation as heretofore exercised.
Congress has made frequent grants of public lands, and in various ways aided in the construction of railroads through public lands in-the territories, and thus benefiting citizens settling upon these lands; but in this instance Congress is attempting to place this burden upon private parties, and thus •enhance the value of public lands in these same counties. By this process, and if this kind of taxation can be sustained, a burden before unheard of can be forced upon the pioneers who happen to be so unfortunate as to have purchased government lands. The evils resulting from this kind of legislation in the States have been so great that I regard it fortunate *260that Congress has not the power to repeat it in the territories. It requires very little discernment to see .that long before the new States could be admitted into the Union, almost every organized county would be bonded to such an extent, in their efforts to procure the building of railroads, that the payment of their bonds would be an utter impossibility. For the purpose of examining the questions presented in this case, and that only, I will now assume that Congress has the power, and that a Territorial Legislature has the power, to authorize a town or county to vote aid to a railroad company, that being so, was there any authority for the vote of aid in this case? Was there any law authorizing the vote, or authorizing the subscription? It is conceded, upon the argument, that the pretended act of the pretended Legislature, approved April 21, 1871, was absolutely void, and the only force or validity now claimed for it, is the validity given to it by an act of Congress, approved May 27, 1872, about eleven months after the passage of the pretended Territorial act. It is admitted that the only vote taken, to determine the wish of Yankton county, was the vote of September 2d, 1871, some six months before the passage of the law by Congress, attempting to validate the vote of aid to the railroad company. It is conceded likewise that at the time of taking the vote there was no law authorizing it to be done.
Here, then, we have to meet the distinct question: can a legislative body pass a retroactive law, and thus make valid that which before was void, that which before had no legal existence? I think not. If the law of Congress of May 27, 1872, made valid the vote of September 2d, 1871, then Congress could make valid the subscription of Yankton county, without submitting the question to the voters of that county at anytime. The board of county commissioners had no authority to make an order for holding the election. They had no authority, nor had any official in the county, to receive a vote or certify the result. There was no authority to administer an oath to a voter challenged; in fact, every act pertaining to the taking of that vote, was without authority and void. And if a proceeding of this kind can be upheld, it will *261be going but a little farther to sustain a subscription without law and without even an attempt to ascertain the wishes of the voters on the question.
In the case of Hasbrouck v. The City of Milwaukee, the city authorities were authorized to make a contract for the improvement of the harbor of Milwaukee, at a sum not exceeding §50,000, to be paid by the issuance of the bonds of the city for that sum; the bonds not to be issued unless a majority of the electors should vote for the contemplated harbor improvement. The voters of the city declared in favor of the improvement, and the work was put under contract. The contract was first made with one Howley, by him assigned to Barton, and after the decease of Barton, by his representatives, to the plaintiff. By subsequent legislation the voters of the city were authorized to increase the amount to §100,000. The contract was changed from time to time, which added materially to the expense, till at the time of its completion by the plaintiff, the amount claimed by the plaintiff was $70,-000 in excess of the amount that the city was authorized to pay, by the various acts of the Legislature as sanctioned by a vote of the taxpayers. Subsequent to the completion of the contract the Legislature passed a law making the contract valid for the full amount, and authorizing the city to pay such sum as the plaintiff claimed over and above the amount the city was authorized to expend for the improvement of the harbor. The city authorities refused to pay any sum whatever in excess of the amount to which they were limited by the former acts of the legislature; in other words, tfiey refused to recognize the validity of this retroactive law of the legislature. The right of the plaintiff to recover depended upon the validity of this retroactive law. The opinion of the court is by Dickson, Chief Justice. The Court say: “It is claimed by the plaintiff, that if under the two previous statutes the city was only authorized to enter into a contract for the construction of a harbor, the expense of which should not exceed §100,000, and that the municipal authorities were not at the time they attempted to do so, empowered to make an agreement or bind the corporation for the payment of a *262greater sum, the defect is cured by the operation of the act of February 23, 1857., and that from and after the passage of this act the agreement for the excess became valid and binding upon the city. In the first place it will be observed and should be borne in mind, that the subject with which we are dealing is not one of public policy merely, but of corporate power, and that the inquiry, where the supposed contract of a public corporation is absolutely void for want of capacity to enter into it, a subsequent legislative ratification or recognition of it, is sufficient, without any evidence, that such ratification was procured at the instance, or with the intent on the part of the city, to give such contract life and vitality, could make it obligatory upon the corporation. I do not understand that the city, by any appropriate action, petitioned or asked for the passage of this act. On the contrary, I infer from this proceeding, that it has refused to be bound by it. Under these circumstances the question is, can the Legislature, by recognizing the existence of a previous void contract, and authorizing its discharge by the city, or in any other way, force the city into á performance of it? It follows, from what I have already said, that in my opinion, it cannot. This is not a defect which can be reached by the retroactive power of the Legislature. It cannot, because, in so doing, the Legislature would interfere with vested or fixed rights. It would, of its own mere motion, create an obligation, where, by law, none before existed. It would impose a liability against the will, and without the consent of the party, to be charged thereby. This the Legislature cannot do. It can only act retrospectively for the purpose of furnishing a remedy for the removing an impediment in the way of the enforcement of some pre-existing legal or equitable right or duty, and not for the purpose of creating such right or duty. And this distinction will be found to prevail in all the cases.”
(See 23 Wis., 362): This action is to recover bounty money, alleged to have been voted by the defendant, the town of Liberty, in 1864, for volunteers and drafted men. The complaint also set forth a special act of the Legislature of 1866, legalizing the proceedings of said town taken in 1864, and authorizing the *263levy of a tax to pay the bounties then voted, at the rate of $200 for each person drafted. The defendant demurred. The demurrer was overruled and defendant appealed. Dickson, Chief Justice: “ The order overruling the demurrer must be reversed for the reason that at the time the town meeting was held and the vote taken, there was no law authorizing the towns of this State to raise money by taxation to pay bounties to drafted men. The statutes then in force only authorized the payment of bounties to volunteers, and the raising of money for the purpose of giving aid to the families of volunteers and drafted men. The raising of money to be paid to drafted men, as bounties, or in consideration of these entering the military service, was not authorized by any act of the Legislature. This being so, it is clear that the voters or inhabitants of the town cpuld levy no tax for the purpose of raising money to be paid to drafted men; and if they could not levy a tax, it is equally clear that they could not make a promioe or enter into a contract binding a town to such payment — the vote was simply null and void, and being so there existed no obligation on the part of the town to pay the plaintiff and those whose claims he represented, who were drafted men prior to the passage of the act of March 21,-1866. Does that act help the case of the plaintiff? We shall enter no argument to show that if there was no obligation on the part of the town, before the passage of the act, the Legislature could not, without the concurrence of the inhabitants, or proper authorities of the town, originate one upon which an action at law, as upon a promise, may be maintained against the town. If the act be valid for any purpose, and we do not desire it to be invalid, and if the plaintiff has a remedy under it, it must be by some proceeding, to compel the levy and collection of the tax. By an examination of chapter 142, Local Laws of 1866, it will be seen that it first legalizes the proceedings of the town meeting, for the purpose of paying bounties to volunteers and drafted men — and that law further provides for the levy and collection of a tax to pay drafted men and volunteers in the military' service; and, therefore, while the court holds that the Legislature could not validate *264the void law, it may well be questioned whether the provision was not broad enough to compel the town authorities, in a proper proceeding, to levy and collect the tax to discharge this moral and equitable liability of the town to the drafted men and volunteers.”
In discussing this question of retroactive legislation, a very marked distinction must be kept in mind between that class of legislation which cures defects, and legislation validating-void proceedings; whether the purpose to be accomplished is the collection of ordinary revenues for the support of government, or ordinary taxes for municipal purposes, which do not require a vote of the taxpayers, or electors, to authorize the levy of the tax, and retroactive legislation to validate void proceedings, which were unauthorized in the first instance, unless sanctioned by vote of the electors.
I think the decisions are uniform in holding that the. payment of ordinary taxes for the support of government, whether’ State or local municipalities, is one of the most sacred duties devolving upon the taxpayer. He is protected in every respect by the State, and in return for this protection he has pledged his all for the support of that government which protects him. And if the law which authorizes the collection of the proper tax or revenue, is void, and is so declared by the courts, a fresh or subsequent law may be passed by the Legislature, retroactive in its terms, validating the invalid proceedings, and thus furnishing the means or process for collecting that tax which the taxpayer was under the most sacred obligation to have paid. And I think the decisions are just as uniform that a legislative body cannot pass a retroactive law, validating void proceedings against the will of the voters and taxpayers, which alone was authorized to make the act valid in the first instance.
Taxation in the case at bar, is taxation in a special proceeding and that for which a special enabling act was required, and not taxation for purely public purposes over which this unlimited power of legislation prevails. It is a species of taxation which it has been held the Legislature may authorize, subject to the ratification or consent of the *265proper local authorities, or of the people of the particular municipality, but not without such ratification or consent.
In 58 Maine, 597, the Chief Justice says: “ It requires the contract or “ consensual act ” of such local authorities, or of the people, to give it, validity and effect.”
(See Mills v. Charlton County Treas., 29 Wis., 400): If the Legislature in the first instance has no compulsory power of taxation for the purpose indicated, and can only by proper enabling act, submit the matter to the action of the local officers or the people of the municipality, it would seem to follow that it has no power to cure defects, or to waive, or supply omissions in past proceedings, against the will of the party to be charged. Dixon, Chief Justice, says “ the Legislature may, in its discretion, authorize a minor to mortgage Ms land in a particular manner, and for a particular purpose, but if in the supposed execution of the power, the minor should proceed in a different way, or to mortgage for a different purpose, the instrument would be void. Could the Legislature by retroactive measures obviate the defect and declare that a valid contract, which before was void, agairstthe will of the person whose estate was to be charged? This Court is of the opinion that it could not.”
(See Orton v. U. S. Neunon, 23 Wis., 102): In this case the action was to recover the possession of a piece of land conveyed by a tax deed to the plaintiff. It appears that the land was not properly described in the tax deed. The Legislature passes a law for the purpose of curing the defect, and making valid the deed. The Court say, “ the act has no influence upon the question, for the reason that the Legislature has, under the Constitution, no power to declare a deed valid which by law was void at the time of the passage of the act.”
It was suggested upon the argument that the commissioners in issuing the bonds to the railroad company might have sanctioned, approved or assented to, the validating act of Congress. I do not think any act of theirs could have that effect, for the reason that it was not the assent of the commissioners that was necessary to authorize the issuing of the bonds, but the express assent of a majority of the electors *266was necessary. The retroactive law validating an invalid law, before it can bécome operative and binding, must be accepted and sanctioned by the same party or persons, whose assent was necessary in the first instance.
It will be observed that in the discussion of the questions presented in this case thus far, I have assumed that, notwithstanding general powers of legislation are, by the Organic act, conferred upon the Territorial Legislature, yet Congress still retains the right, and may at will, legislate for the Territory. Of the soundness of this proposition, however, I have grave doubt. Congress may make all needful rules and regulations for the government of the Territories, and Congress acting under this authority has given to the Territory of Dakota an Organic act. And it is aptly and well said by Chief Justice Miller: “ The Organic act of a Territory is its Constitution. Congress having given to the Territory its charter or Constitution, by the provisions of which general powers of legislation are conferred upon the Territorial Legislature, is not the power of Congress to legislate for the Territory at an end? or may Congress and the Territorial Legislature, each, in its own way and time, legislate for the Territory? If Congress may still legislate for. the Territory as to important matter, then it may as to trivial or unimportant matters. If it may grant charters to railroad corporations, or authorize municipalities to make donations to railroad companies in the Territory, it may grant city and village charters. It may provide criminal or civil codes and regulate all commercial transactions: It is unnecessary, however, to discuss this question, and we do not now undertake to decide it.”
It. will be inferred from what I have said that in my opinion a Territorial Legislature cannot authorize a county, by a vote of the taxpayers, to aid in the building of a railroad, and then levy a tax upon the taxable property in the county to raise money to discharge that liability. This power rests only with the Legislature of a sovereign State, whereby the fundamental law of the State, which springs directly from the will of a sovereign people, is unlimited and unrestricted as to this kind of legislation. The legislative power in a Territory *267is not brought into existence by the authority or will of a sovereign people. Its life, power and perpetuity are subject to the will of Congress. When the population in a Territory is sufficient-to entitle it to representation in Congress, and to justify the formation and organization of a new State, then the sovereign people act, an^ in their sovereign capacity take the necessary action for the formation of a State constitution; the people then limit the legislative power or not, as they deem most wise.
In examining a law passed by a Territorial Legislature we are governed by the same rules that apply to the examination of an act of Congress, that is to say, we must ascertain whether the power has been delegated or granted to the Territorial Legislature to enact the law under consideration. Tested by the rules above indicated I come to the conclusion that neither Congress nor the Territorial Legislature, nor both combined, could authorize or empower the county of Yankton to make the donation or subscription to the capital stock of a railroad, corporation. I will repeat as in substance I have before remarked — the Organic act of a Territory is its Constitution.This Constitution provides for one session of forty days, and no longer, biennially. A session of the Legislature extending beyond this limit, is not only not authorized but it is in violation an disregard of the fundamental and supreme law of the Territory.