Court Opinion

ID: 6643885
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:47:46.519928+00
Date Added: 2024-06-11T15:59:21.426410
License: Public Domain

Maxwell, J.,
dissenting.
I do not dissent from the statement of the law in the syllabus of this case, but in my view the question at issue is entirely different from that stated therein. It appears from the pleadings that in the winter of 1875-6, and since our present constitution took effect, the county commissioners of Dakota county submitted to the electors of that county a proposition to issue county bonds to the Covington, Columbus & Black Hills railroad company, in the amount of $95,000,- being fifteen per cent of the assessed valuation of the county. This proposition was submitted at one election, and received more than two-thirds of all the votes cast, and was declared carried, and the bonds were thereafter issued and placed in the hands of a trustee, and have been delivered to the railroad company or its assigns.
The election for these bonds was held under the provisions of section 2, article 12, of the constitution, which reads as follows: “ No city, county, town, precinct, municipality, or other subdivision of the state, shall ever make donations to any railroad or other works of internal improvements, unless a proposition so to do shall have been first submitted to the qualified electors thereof, at an election by authority of law. Provided, that such donations of a county, with the donations of such subdivisions, in the *284aggregate, shall not exceed, ten per cent of the assessed valuation of such property. Provided further, that any city or county may, by a two-thirds vote, increase such indebtedness five per cent, in addition to such ten per cent, and no bonds or evidences of indebtedness so issued shall be valid unless the same shall have endorsed thereon a certificate signed by the secretary and auditor of state, showing that the same is issued-pursuant to law.”
There is no statute in this state authorizing a county to issue its bonds in excess of ten per cent of the assessed valuation, and the constitutional provision above quoted does not confer the right to vote bonds, but merely places restrictions upon the power of the legislature, prohibiting it from ever authorizing the issue of such bonds in excess of fifteen per cent. The question here presented was before the court in the case of Reineman v. C., C. & B. H. R. R. Co., 7 Neb., 312, the opinion being written by the present chief justice, who, after copying the section above quoted, said: “It will not be claimed that, in the absence of any law, either statutory or constitutional, the electors of a county or municipality could impose an indebtedness of this sort that would be binding upon the inhabitants thereof. "Very clearly they could not. Neither will it be denied, we think, that in the absence of all constitutional restriction, the legislature could, by suitable enactment, authorize such aid in any amount which the people might see fit to vote. Indeed, until the adoption of our present constitution, this whole matter of municipal aid to works of internal improvement was within the sole control of the state legislature, and subject to no restraint other than such as that body in its wisdom saw fit to impose. This being so, the section of the constitution above quoted must be considered as restrictive only upon the exercise of legislative discretion in the authorization of county and municipal indebtedness, to aid in the construction of railroads and other works of internal improvement. It fixes the boun*285clary beyond which the legislature cannot go, but within which its authority is still supreme. The constitution does not, of its own force and independently of the legislature, assume to authorize the people to vote such aid, but, on the contrary, the necessity of legislative permission and direction is expressly recognized.”
Again, on page 313, he said: “We conclude, therefore, that until the legislature shall by suitable act change the existing statutory law so as to authorize it, there is no warrant for creating a county indebtedness in aid of internal improvements exceeding in the aggregate ten per cent of the assessed value of the taxable property within the county furnishing such aid. And further, that by the amendment of February 17th, 1875, such aid must have been authorized by at least two-thirds of all the votes cast on the proposition to extend such aid.” It was held that as the proposition was submitted as an entirety, and exceeded the statutory limit, the election was simply “ a void act, conferring no authority whatever upon the board of county commissioners to issue the bonds of the county in any amount whatever.”
The correctness of that decision has never, so far as I am aware, been questioned, nor can it be successfully. A county has no inherent right to issue commercial paper. It is a mere governing agency of the state, with certain powers distinctly specified in the statute. Now suppose such organization, without legislative authority, should issue its bonds to a railroad company to the amount of fifty per cent of its assessed valuation, would such bonds possess any validity? There would be a lack of power on the part of those executing the bonds that would render them invalid in whatever hands they might be found. The reason is, the county commissioners in issuing bonds act under a special power, and if they proceed without authority, their acts are simply void. Nor can it make any difference whether the bonds issued without authority of law *286amount to fifteen or fifty per cent of the assessed, valuation. In either case, being in excess of the powers conferred, they are nullities. In the case under consideration, the $95,000 issued by Dakota county in 1876, being five per cent in excess of the limit fixed by law, in the opinion of the writer are null and void. Yet it is proposed to issue funding bonds to the amount of $144,000 to replace such bonds, the rate of interest to be diminished to six per cent. And the mandamus applied for in this case is to compel the secretary of state and auditor to endorse on these bonds that they are issued pursuant to law. The object of the constitutional provision, so far as the writer is aware, was to prevent unprincipled persons from going into the unsettled counties of the state, and issuing fraudulent obligations in the names of such counties, and selling the same, and thus not only defraud the purchasers, but bring reproach upon the good name of the state. But the respondents are not judicial officers, nor is their certificate a guaranty on the part of such officers or of the state that the instruments are valid. Such officers may make a mistake as to the law, and so long as they act in good faith they are not personally liable for the same. Thus, the former auditor and secretary of state, evidently supposing that the constitution alone conferred authority to issue bonds to the extent of fifteen per cent of the assessed valuation, certified that the $95,000 bonds in question were issued pursuant to law. But this added nothing to their validity, and that question can be determined alone by the court. Where, however, these officers object to certifying certain bonds, upon the ground that they are illegal as in this case, the court, in order to compel them to act, must declare that the proposed bonds are legal. This court must in effect hold that the $95,000 of bonds issued in 1876 without authority of law, were and- are legal obligations of Dakota county. Such a decision breaks down all the barriers erected for the protection of tax-payers, and is fraught with evils the full import of *287which may not now be apparent. There are other questions in the case which cannot be considered without extending this opinion to too great length. The writ should be denied.