SQUAIS fl. LOOKOUT MOUNTAIN CO.
stroys their validity, which I do not mean to affirm, that is a legal defense thereto. If there exists gronnd for equitable interference, it would rather be in favor of the bank than of the tax-payer. Counsel have presented other points in argument, but none which call for particular remark. I find no substalJtial ground calling for the issuance of the writs of injunction prayed for; and the motion therefor is overruled, and the restraining orders heretofore granted are set aside.
SQUAm '11. LoOKOUT MOUNTAIN
Co. et ale
(CirCWU Court, E. D. Tennessee, B. D. June 17, 1890.)
EQUITY PLEADING-SUITS AGAINST CORPORATIONS.
Under 'equity rule 94, which provides that every bill brought by one or more stockholders against a corporation and others, founded on rights which may properly be asserted by the corporation, must set forth with partiCUlarity the efforts of the plaintiff to secure such action as he desires on the part of the director8,and, if necessary, of the shareholders, and the causes of his failure to, obtain such action, the court has no jUrisdiction of a bill to enjoin the transfer o,f part of the stock the defendant to another corporation, which fails to set forth such effortll, though it allege that the directors of the one corporation are also directors of the other, that it would have been useless for plaintiff to demand that they would bring suit, and that plaintiff would have made such demand had he not known that they would ' refuse. Following Hawesv. ,Oakland, 104 U. S. 460.
On motion to dismiss the bill for want of jurisdiction.
KEY, J. The complainant lllleges that he is a stockholder in the Lookout Mountain Company; that said company was organized as 8 statutory real-estate and immigration corporation under the laws of Tennessee, with l.l.capital stock of $1,000,000, but that only $600,000 of said stock were subscribed for; that about 700 acres of land were purchased by the company upon the top and sides of Lookout mountain, valued at' $600,000. 'Books for the the subscription of stock were opened, and $600,000 ofthe stock only was authorized to be subscribed for and issued, but the remaining $400,000 of the stock has never been subscribed for or issued. It is further alleged that the individual defend· ants are seven of the nine directors of the company, and that they hold a majority of the stock of the company. Complainant avers that he is the owner of 143 shares of the stock of the company, each share being $100; that 133 of these shares were transferred to him July 14, 1887j that on the 28th of July, 1887, the other defendants, by some fraudulent and unauthorized scheme or contrivance, undertook to transfer and issue to the Chattanooga & Lookout Mountain Railway Company the $400,000 of stock in the Lookout Mountain Company which had not been subscribed fO,r. It is charged that thosedefendllnts intended at the time this stock was so issued and donated to become stockholders in theChattan90ga & Lookout Railway Company, and they did be-
come such, and become seven of the railway company's nine directors, so that this stock is now claimed by these defendants, who it is alleged constitute a majority of the directors, arid own a majority of the stock in both corporations. The Chattanooga & Lookout Mountain Railway Company is a Tennessee corporation, and the defendants are citizens of Tennessee. The com.plainant is a citizen of Ohio, and alleges that he had no notice of these transactions until May 28, 1890. The present matter for consideration is whether an injunction shall issue restraining any transfer or incumbrance of the stock. Defendants insist that this court has no jurisdiction of the cause, and that, so far from an injunction being awarded, the bill should be dismissed. The first question with which w,e are confronted does not arise upon the merits of the case made in the bill, but whether the allegations of the bill are sllch as are necessary to invest this court with jurisdiction the supreme Murtfor equity proof the case. Rule 94 prescribed ceedings in this court says:
"Every'billbrought by' one or morelltockholdersin a corporation against the corporation and other parties, 'founded on rights which may 'properly be asserted by the corporatiQn, must be vedfied, by oath,and must contain an allegation that theplaintitf was a shareholder at the time of the transaction of which he complainll,or that his share h'liddevolved on hitn since by operation 6f law, and thatthe, suit is not a collusive one, to 'confer on a court of ,the United States jurisdiction of a case of which it would not otherwise have cognizance. It musl;;alsoset forth witi)particnlaritythe efforts or the plaintiff to secure such action as he desires an the part 01 the managing directors or trustees, and, if necessary, of the shareholders, and the causes of his failure to obtliin;$uch action." '
In Hawes Y. Oakland, 104 U. S. 460, 461,
"To, enable a stockholder in a corporation to sustain in a court of equity, in lJis own name, a suit founded on a right of,action eXisting in the corporation itself, and in which the corporation itself is the app'ropriate plaintiff, there must exist,'as a foundation of the suit,some action or threatened action of the managing board of, directors or tr,Ulltees of the corporation, which is be;yond the authority conferred on them by their or other source of or, ganization; or such a fraudulent transaction completed orcontemplatlld by the acting managers in connection with some other party, or among themselves, or with other sllareholdei's, as will result in serious injury to the corporation. or to the interesLs of tbe :other shareholders; or where the board of directors or·a majority of them are acting for their own inter.estin a manner destructive of the corporation itself, or of tberightll of the other shareholders; or wherElthe majority of shareholders tbeIq8elves are, oppressively and illegally pursuing a course in the name of thecprporation which is in violation of the rights of the other shareholders. and Which can only'be restrained by ,the aid ofa court of equity. * · · But, in addition to the existence of grievances which call for this kind of relief, it is equally important that, before the sharebolder is permitted in his own name,to institute and conduct a litigation, which Ull,ually belongs to th-eqorpol'ation, he sl)ould show to the satisfaction of the Court that he has exhal,ll'lted all the within his reach to obtain within the corporation itself the redress of his grievances, 01' action in contormity to his Wishes. He must make an earnest, 'not a simulated, effort with the managing body of the corporation to'induce remedial action on their part, and this must be Dlade apparent to, thecoutt.lf time permits or has permitted, he
SQUAIR ". LOOKOUT MOUNTAIN':OO.
must show, if hefalls,wiLh the directors, that he has made an honest effort to obtain action by the stockholders as a body in tile matter of which he COIllplains. And he must show a case, if this is pot done, where it could be dona,or it was not reasonable to req nire it·. The efforts to induce such action as complainant desires· the part of the directors and of the shareholders, when that is necessary, and the cause of failure iu these efforts,'Shouldba stated with particularity...
The decision anll the rule predicated upon it are specific and mandatory in their requirements. The bill under consideration, lDakes no averment of any effort on complainant's part to secure theaqtion he desired of either the directors or stockholders. On the contrary, the bill shows that no such effort was Inade. On this point the bill says:
.. The board of directors of the Lookout MOil ntain Company is the same now, with one exception, as it was when these illegal and fraudulent acts were <lommitted by .them, and all them, except two, are the principal stockholders of the Chattanooga & Lookout Mountain Railway Compl;'ny, and the board Is under their control, and, of course, it would have been useless for him .to make a demand.on them to institute a suit to recover the stock; but he would bave made said application had he not known that they would refuse."
The complainant seems to believe that a demand of the directors for suit is all that rule 94 requires. The language of the rule does not support in the slightest degree such an inference. It provides that "every bill brought by one or more stockholders in a corporation, against the. corporation and other parties, founded on rights which may properly be asserted by the corporation, * * * must set forth with particularity the efforts of the plaintiff to secure such action as he desires on the part of the managing directors or trustees, and, if necessary, of the shareholders, and the causes of his failure to obtain such action." As to the directors or trustees, the language is positive and mandatory. The nature of his efforts and the causes of his failure must be stated, as to them, with particularity,and, if necessary, he must show like efforts with the shareholders, and the causes of failure with them. The bill may show that tJ1ere was no necessity for efforts to be made with the shareholders, but not so as to the directorz3. The language of the rule and of the decision in the case of Hawes v. Oakland, supra, implies, indeed more than implies, that action of the directors and trustees, as well as 'shareholders, complained of must almost necessarily be the action of a majority of them. Justice MILLER, in the case referred to, groups in four classes the wrongs for which bills may be maintained: (1) Some action or threatened action of the managing board of directors or trustees which is beyond the scope of their powers. (2) Such fraudulent transaction completed or contemplated by the acting managers, in connection with some other party or among themselves, or :with other shareholders, as will result in serious injury to the corporation or its shareholders. (3) When the board of directors, or a majority of them, are acting for their own interests ina manner destructive of the corporation itself, or of the rights of the shareholders. (4) Where the majority of the shareholders are oppressively and illegally pursuing
a course in the name of the corporation iii violation of the rights of the other shareholders. ., . All these classes .eIllbtace action ofthe directors officially, and not individually, and necessarily action by all or a. majority of them, and classes 3 and 4 in ,positive terms embrace action by a majority of the directors and shareholders; and yet, in thefle cases, precisely similar to the one in hand, so far as some of them are concerned, the learned and great judge says the "should show to the satisfaction of the court that he has exhausted all the means within his reach to obtain, within the corporation itself,.the redress of his grievances, or action in conformity to his wishes. He must make an earnest, not a simulated, effort, with the managing body of the corporation, to induce remedial action on their part, and this must be made apparent to the court." 104 U. S. 460,461. Complainant attempts to excuse and justify his failure to do these things by maintaining that when a majority of the managing directors or of th'e stockholders of a corporation do, or undertake to do, an illegal, fraudulent, or corrupt act, itis unreasonable to suppose they will refrain from doing the act, or will revokeit, and restore the former and just condition of things,although every possible effort be made to induce ·them to do so, and therefore it is unnecessary to make any effort in this direction. There is nothing to support this position, but everything is against it. It will not do to permit complainant's judgment and opinion to nullify and abrogate the rule. DimpfeUv. Railroad, 110 U. S. 209, 211, 3 Sup. Ct. Rep. 573j Quincy v. Steel, 120 U. S.244, 248, 7 Sup. Ct. Rep. 520. But.ifall these things were out of the way, does complainant's bill make a case for the injunctive interposition of the court? . As the case stands, aU the allegliltions of the bill properly pleaded must be regarded as true. Cotnplainant says that he became the owner of all his stock but tenshareslJuly 14,1887; that two weeks after, the bargain or transaction pomplained of between the two corporations took place, but that he never heard of it until May 28, 1890. He,filed his bill June 9, 1890. Why and how he slept upon his rights for almost three years does not 'appear. A court, eilpecially here in Chattanooga, must know something of the history and geographical situation of the two corporations assailed by the bill. The bill avers that the property of the Lookout Mountain Company consists of Jands'upon the top and sides of Lookout mountain, and we know that they are upon the end of the mountain next to Chattanooga and the Tennessee river. We know that the chief value of thesee landsqepends upon their becoming a summer resort, and being purchaseda8 homes for the people during the heat of summer. To bling them in,to, profitable market, it is necessary to have easy, safe, and rapid access to and Agress from them. A railroad becomes. not only useful, but important, not to say necessary, in the successful disposition and usee of these,lands. Then,.:again, a railroad. running from the railways at the base of the m.ountain up to and along its top must depend for profitable business u,1>on the population upon the mountain. The. more the pea-
flQUAIR ". LOOKOUT MOUNT;\IN Co.
ple--tbe more numerous the homes upon the mountain-the greater the operations of the railroad. The interests of the. land company and the railroad company are so interdependent and blended as to become essentially the same, and the prosperity of one necessarily builds up and im pels the success of the other. Surrounded and attended by these con· sideratiol1s, it was the part of wisdom and successful enterprise on the part of the of the land company to aid and encourage byalllegitimatemeans the construction of'a railroad to and through the property of their corporation. Another thing a judge must know is something of the reputation and standing of those who are his neighbors, and reside in the same community with him. The directors who are sued in this case are among our leading business men, gentlemen of high and honorable character, whom the law, as well as their neighbors, presumes to be honest. When we hear that gentlemen of such high character for integrity and good business judgment have represented their corporation in a transaction of confessedly great importance in promoting the interests of their corporation, we should not hastily conclude that their action was corrupt and fraudulent, although some question might arise as to whether they had power to do the act complained of. The case made by/this bill shows 116t only the propriety, but the necessity, for rule 94. Here is a. complainant whose eyes and ears were closed during the whole period during which thiR railroad was being constructed; but after it is completed, and the property of his corporation has received, and is enjoying the benefits of its construction and operation, he wakes up, and, within 12 days after he hears of the transaction of which he complains, he files this bill. . Did not a sense ofjustice and fair dealing demandthat he should have called upon the directors, and asked for an explanation of the transaction? Then, if they failed to satisfy him of the good faith or the legality of the transaction, he should have made an earnest effort to induce them to do what he conceived to be just in and by his cor· poration ·. Failing in this, then he might have appealed to the courts. I regard it that it is not only clear that an injunction should not be granted', but 1 think the motion to dismiss the. bill because it fails to meet the requirements of rule 94, and of the decision in Hawes v. Oakland, 8l1pra, is weUtaken; and, unless complainant by the rule-day in July next, shallso amend his bill ssto obviate these defects and objections, his bill will be dismissed.
NORT1'1EltN PAC. R. CO. ". ROBERTS
(CmmUCourt, W. ;n.WiSconsin. AprU 00, 1soo.)
: , use of raih'Oll-d, ,thoug)} o,wned ,by a private corporation, fs, public to suob .'degree as to authorize taxation 'in it8llupport; and Laws c. 150, approv"g ratifying tbo ,ot Douglas couJltym conveying to a rauroad company to aid in the construction of the road through la!ids wblcb it held the county, is valid. . i ' " · ,
OoMP,A1\'I1I_MuNJOJPu., A.m-CON8TmmOl'UL LAW.,
L Q1JBTING TITLB-I'LnnJ1lfe-DBHURlt-., , ,A ,bill by a to aside deeds of variOUS tracts ot J.!I;nd previously conveyed to it, and to (jlliet the title, is not demurrable on the ground that com'plaina,nt is only in,actu,aI \',osse8lion, of a portion ot the landS,' and can,n,o,t mainfain the suit as to that portion of whicb it has no possession. The demuTrer goes to the entire bill, and doe. not lie if the billla maintainable .. to pan of the lands embraced m it. ';; , .
In Equity. On demurrer. <htlin k Butler, for complainant. BaileYidor defendants. '
BUNN, J.. This action is brought by the oomplainantto Bet aside· two certain deeds of conveyance of a large quantity of lands lying in Douglas county, Wis., executed;by said county to the defendant Roberts,-one on the 6th day of July, 1888, and ,the other on the 7th day of March, to quiet the title to said lands in the complainant. There was a generalLdemurrer put in by the defendants to the bill ofcomplaint, and theCti.se has been argued and submitted on such de,muner. The essential facte, as appears by the bill, are as follows: That on the 7th day of September, 1880, the complainants had completed the line of road now known as the "Northern Pacific Railroad" as far eastward as the point :known as the ",Northem Pacific Junction," in the county of Carlton .aDd state of Minnesota; and, being about to hold a meeting of its board of directorsin New York to consider the extension of their line eastward from said injunction to some lpoint on Lake Superior, the board of supervisors of Douglas County,at a meeting of said board duly held, adopted a resolution, and caused it to be entered of record, the substance of which was that"Whereas, the prosperity of the county would be greatly influenced by the manner in which, and the route upon which. said road should be extended, that, in the opinion of the board, a line of road entering the state at some point between the St. Louis and Nemadji rivers, and running thence all the way in Wisconsin, between said rivers, to a point on the bay of Superior at or near the mouth of Nemadji river, and thence along said bay of Superior to Connor's point, with sufficient docks or piers suitable for the transfer of paslengers and freight from its cars to lake-going craft, and from said craft to said cam and depot at some point on said bay of Superior, between said Nemadji river and Connor's point, which said l'ailroad company may select, and aD eastern extension crossing the Nemadji river. at or near its mouth, at a point that will afford to said railroad company the best and most profitable ronte for ita business, and best develop the county of Douglas and ita re-
NORTHERN. PAC. R. CO. fl. ROBERTS.
sources, therefore, resolved, that it is the duty and true polley of this board, by every means in its power, to promote the constrnction of the N. P. Railroad, the main line thereof, or a connection therewith, upon substantiallY such route. and that in behalf of said county. in aid of or inducement to the construction of a railroad, at an ea,rly day, in the manner and upon the route indicated in the resolutions, said board offers to said N. P. Railroad, upon condition that it accepttbe,proposal within sixty days, and witbin the year 1881 construct and complete such railroad as above indicated, and make the connections therein set forth, the county of Douglas should, as soon as said roadsbould be completed, transfer, by sufficient deed or deeds, to said N. P. Railroad Co., all the available lands or lots belonging to said county of Douglas, which have been acqUired by deed, to which said county has held undisputed title during two years last past." That this proposition was accept by the railroad company, and the d railroad built and completed within the time, according to the contract with the board of supervisors. There were some other stipulations in the contract, but enough had been set out, perhaps, to present the questions for decision. There is ,no dispute but that the road, with allprop. er docks,piers, etc., was built and completed, and all the connections properly made, by the company,pursuantto the agreement,and has pver since been maintainw and operated by the complainant, and that the county board, by resolution, accepted the work, and made a convey. anee' of the to the miltoad company, pursuant to the resolution and oithe board, on January 20,1882, which deed of conveyance was duly recorded, and the legislature of the state of Wisconsin, in and by chapter 150 of the Laws of said state for the year 1883, apprpved and ratified the act of said Douglas county in so contmcting with the complainant, and in so cOll\'eying the lands of the county. .The bill further alleges that the complainant held such lands with. out question made of its right or title, paying large amounts of taxes thereon, from the time of such conveyance, in 1883, up to the month of July, 1888; that such lands were of no market value at the time of so enterinl!into such agreement with the company for the construction of its roadth,rough Douglas county, but afterwards, by reason of the construction of such road, became of great value, and are now worth more than$200,OOOj that, since said conveyance.ofsaid lands by the county complainant, complainant has sold and conveyed to divers persons purchasing the same in good faith, and paying value therefor, a large number of the parcels of land so conveyed to it by the county, and whose titlef;lthereto are based upon such conveyance by the county to the com· plainantjt.hat on or about July 6, 1888, the defendant Roberts, combin· ing, etc., with other persons, induced the. board of supervisors of said county to to·said Roberts, for thesu!tl of $335, all the said lapd so conveyed before to the complainant, and to make a quitclaim deed of the same, \Yhich was duly recorded, and constitutes a cloud upon complainant's title. That, said deed to Roberts omitting, as it did, several par· cds of so conveyedwthe complainant, a second deed was made by the county to Roberts of the remainingparcelsofland, which deed C9psiderationof $50, ,and was duly recorded. The bill also
alleges that the complainant company, upon the execution of the deed by the county to it,. took, and has since held, the actual possession of a large part of the landssb conveyed, and has occupied the same, and is still so Qccupying it, for righfof way, depot grounds, and .lIO forth, and that other }Jortions ofthe land are vacant, alid unoccupied by anybody. There are two groundiJof demurrer to the bill. The first is that, the complainant not being in. the actual. possession of the lands, it cannot maintain a suit to cancel the deeds to Roberts, and to qUiet the title. The-contention of the, complainant is that, being in actual possession of 30 pieces-of ,the land conveyed, and being entitled to maintain the action as to that portion, the court will retain the case, in order to do complete justice between the parties, and not turn the complaibantover to his action of ejectment to recover the land conveyed by the same· instruments, of which it does not have actual possession; that, to save a multiplicity OfS'l1itB, the court, obtaining jurisdiction by reason of the complainant's aQtual possession of It portion of the lands, will retain jurisdiction, and adjudicate the entire controversy in equity. The principle invoked by complainant is a familiar one, and may be properly .applicable to i this case. Whether it be so or not, I have not found it necessary to decide on this demurrer, as the demurrer goes to the entire bill; and, ifthe bill is maintainable as to part of the land, the demurrer will not lie.1.'his point, 'if a good one, can be taken advantage of by special plea or answer, or without either plea or answer, upon final hearing; the facts appearing Upoilthe face of the bill. The other ground of demurrer is that the county board of supervisors had no authority, and the legislature had not the power to confer authority upon such board,to make a conveyance oithe land belonging to the county, and which it held under tax-titles, to aid in the construction of a railroad through the county, and therefore the act of the legislature ratifying the act of the county board is unconstitutional and void. It has been assumed upon the argument that the question stands upon the same footing as that.determined :by the supreme court of Wisconsin, in 1870, in the case of Whitingv.Railroad Co., 25 Wis. 167; and I have no reason to doubt the correctness of this view. The land donated was a fund belonging to the county asa result of taxation, and making a donation of it to aid. in the construction of a railroad through the county would be the same, in principle, as levying a tax for the same purpose; and though the supreme court of the United States>, in the case of Okott v. Supervioors, 16 Wall. 678, coming up on writ of error to the United States circuit court for the eastern district of Wisconsin, and arising upon the same state of facts, reached a conclusion directly contrary to that reached by a majority of the court in Whiting v. Railroad 00., this court is now urged, for the sake of a uniformity of decision upon the same question in the state and federal cour.ts sitting in the same state, to disregard the decision of the supreme court of the United States, follow the decision of the court of last resort in the and to adopt And certainly.it would bell.. very desirable object to make the rule uniform in the two, jurisdictions, iiit could be done with propriety
NORTHERN PAC. R.
of judicial dEjcorum. It is always to be deplored that residents and non· residents of lhe state should not be subject to the same rule of property in the federal and state courts sitting in the same state, and this court will go as far as judicial propriety can warrant to avoid such an anomaIons condition in the administration by two equal and co-ordinate jurisdictions. But I more than suspect it is not within the power of this court to remedy the evil, and that the supreme court of the state is the only body that can better the situation, and put all suitors in the two jurisdictions upon the same footing of right and remedy. The United State supreme court, in Olcott v. SwpervwfY(s, not satisfied with the conclusion reached in Whiting v. Railroad Co., refused to follow that decision upon two grounds: First. It was not a local question. It was not the determination of any question of local law. It was not a question where the construction of any state statute,' or any state constitutional provision, was in issue. On the contrary, it was one of general jurisprudence. It related' to the general powers of any state legislature, over the subject of taxation within the state, and might arise as well in one state as another. It was particularly a question whether the construction and maintenance of a railroad owned by a corporation isa matter of public concern. The taxing power of a state confessedly extended only to the raising of moneys for a public use. If a railroad was a private, as distinguished from a public, use, then the state had not authority to levy a tax for its support, or to authorize a municipality to tax itself; and this question was one of general It had as much reference to tbe constitution of any otber state as it bad to that of Wisconsin. Its solution, therefore, must be sougbt, not in the decision of any single state tribunal, but in general principles common to all courts. uses are public and what private, and the The nature of taxation, extent of unrestricted legislative power, were matters which, like questicns of commercial law. no state could conclusivelv determine for the federal courts. Second. The court had always held that if a contract, when made, was valid under the constitution and laws of a state as they had been previously expounded by its judicial tribunals, no su bsequent action of the legislature or tbe judiciary will be regarded as establishing its invalidity. Prior to the decision of Whiting v. Railroad Co., it seemed to have been well settled in Wisconsin, as elsewhere, that the construction of a railway was a matter of public concern, and not the less so because done by a private corporation. It was on this ground that the courts of the state had held that the power of eminent domain might be exercised by the state, and the citizen's land or house taken at the instance of a railroad corporation, for a right of way or for depot grounds, etc. See Pratt v. Brown, 3 Wis. 612; HaBbrouck v. Milwaukee, 13 Wis. 37; Robbins v. Railroad Co., 6 Wis. 641; Soens v. Racine, 10 Wis. 280; Brodhead v. Milwaukee, 19 Wis. 652. All tbese adjudications, declaring the construction of a railroad. to be a matter of public concern, and the use a public one, justifying the exercise of tbe taxing power and that [)f eminent domain, bad been made previous to 1870, and before the county bonds thEm in suit were issued. The court was not concluded v .421.... no. 13-47
then ,by a decision made in 1870, after the bonds were issued j that such pllblic,uf;les were not of a. nature to justify the imposition of taxes. As the trauaactions in this suit occurred long since the decision in Whiting v.Railroad 01. was announced,. the consideration is urged upon the court; that there is nQtthesame reason fQr not bound by the decision that there was in the case Of Olcott v. Supervisors, aodit is true that' theoontract was made with reference to the law as it stood in 1882; so that the only question, aside from the general merits of the controversy, is whether the United States court shQuld consider itself bound by the decision oUhe state tribunal upon a question of this character. But this question was conclusively determined by the United States supreme court,as has been seen in the case referred to, and as it has in many other adjudicated cases before and since,that time. So that this court is powerless to make.the,rule uniform, 80 long as an appeal lies from its deqisioueto the United States supreme court. On the contrary, the supreme court of the state, if the question should again come before it, may, with the utmost grace and propriety, put itself in line upon this question, not .only with the uniform cours.eof judicial decisions in the federal courts,. but with that of the decisions of all the state courts that have ipassed upon this question, with the single exception of the state of Michigan, and, I might say, with its. Qwn .decisions made previous to 1870. At the time Whiting v. Raurood 00. was decided, the supreme courtofthestate was constitnted of three judges, two of whom concurred in the, opinion, while Justice PAINE delivered a very able and vigorous dissenting opinion, in which he met 'and answered fully, to my mind, the position taken by the majority of the court. In the opening sentence of that opinion, he says:
"The siQgle question presented seems tome to have been already 80 thoroughly determined the other way that it ought no longer to be considered even an open ,one." '
If that could be said at,that time, it may, perhaps, with still greater reason, be said now, after the progress of 20 years of legislation and judicial opinion upon the subject, that the question should be considered settled and at rest, wha,tever may be thought by individuals upon the question of mnnicipal aid to railroadeas a mere question of public policy. The people will generally, in the end, have their own way upon questions of this character, and so they have in this case. They wanted to tax themselves to aid in the building of railroads for the improvement oflocalities, and the public acts of more than 20 states, enabling them to do sO,attest the public sentiment of the country upon the matter of policy. The highest courts in all these: states, with the exception of Michigan and Wisconsin, have held such laws constitutional; and the supreme court of Wisconsin, prior to the decision. in Whiting v. Rauroad Co., had gi\len no indication of dissent from the general current of opinion. The entire logic of the case in Whiting v.Rauroad Ch. had been repeatedly given away,by,previous decisions. In Hasbrouckv. MiJ,waukee, 13 Wis. 43, the ·chief justice, speaking for the court, said:
NORTHERN PAC. R. CO. V. R()BERTS.
"The power of municipal corporations, when authorized by the legislature. to engage in works of improvements. such as the of railroads, canals, harbors. and the like, or to loan their credit in aid thel'<"of,and to defray the expenses of su.;:r improvements, and make good their pledges, by an exerCise of the power of taxing the persons property of their citizens. has always been sllstained on the ground that such works, although they are in general operated and controlled by private corporations, are, nevertheless, by reason of the facilities which they afford for trade, commerce, and intercommunication between different and distant portions 01 the country, indispensable to the public interests and public functions. It was originally supand subsequent experience has demonstrated that posed thattbey would they bave added. vastly and almost immeasurably to the business. the commercial prosperity. and the pecuniary resources of the inhabitants of the cities. towns, villages. and rural districts through which they pass, and with which they are connected. It is in view of these results, the public good tlms produced, and the benefits thus conferred upon the persons and property of all the individuals composing the communitJ. that courts have been able to pronounce them matters of pUblic concern, fOl' the accomplishment of which the taxing power might laWfully be called into action. II
all the decisions. state and federal, on this question, rest, could hardly
A clearer or more forcible statement of the grounds upon which nearly
be made, and it is entirely in accord with the great weight of reason and authority upon the subject; and yet in Whiting v. Railroad Co. the law authorizing municipal aid to a railroad was held unconstitutional on the ground that a railroad corporation is a private concern, and the court also distinguish between cases whE're the municipality is allowed to take stock in a railroad corporation, and lay a tax topay for the shares, and one where this precious privilege is not provided for,-a distinction which, so far as my researches have extended, is nowhere elso made by any court. The waste of intellectual energy required for any court to maintain itself upon so narrow a basis of reason is something sad to contemplate, for anyone who has any proper regard for a just conservation of these forces. If the use of a railroad is public, as had before been repeatedly held by the court, and by all other courts, and in such a degree as to warrant the exercise of the power of eminent domain, of what moment was it that the property itself, and the business, was owned by a private corporation? Was the use any the less public for that reason? If the use is a public use for the purpose of invoking the state's power of eminent domain, though the business is carried on by the agency of a private corporation, why is it not a public use for the purpose of invoking the power of taxation? The lands or houses of one person cannot be taken away, and given to a private corporation, if the business of the corporation is private. It is on the ground that the use is public, and only on that ground, that this extraordinary reserved power of eminent domain can be called into requisition; and that the use of a railroad is public seems too evident to any ordinary capacity to require argument to sustain it. And by the course of legislation and judicial· opinion in the last 20 years, since Whiting v. Railroad Co. was decided, that use seems to have become more and more emphatically public, aDd railroads brought more and more under public control and regulation. The
doctrine has become, by repeated decisions of the state and federal courts, and by a long course of legislation, as firmly established as any doctrine can be, that, though the property and business of a railroad are private, its use, touching the public interests, as it does, at all points, is a matter of pUblic concern, to such a degree as to give the states and general government a strong regulating and supervisory control, almost unlimited i)lextent. short of impairing the obligation of contracts, and the confiscation of private property. The state, within reasonable limits, may regulate freights, not by arbitrary enactment without regard to the question whether the sums allowed will leave a reasonable profit upon the' bUSiness, because such a law would amount to confiscation, but in l\ reasonable manner, to conserve the interest of the railroad and the pub. lic.I:t may require the track to be fenced, and necessary guards placed. It may regulate the rate of speed, the building of extra or double tracks, the raising or lowering of grades at certain places, in the public interest, and a great many other things which the public good may require,-all on the ground that the incorporators have brought their property in connection with a public use, and therefore are subject to public control. Every state has its railroad commission, and now the government has taken under control the regulation of all lines connected with the interstate commerce of the country. Railroads are the great public highways of the country, anq are more emphatically public than any other, unless it be ocean highways. They constitute the most important agency in carrying on the trade and commerce of the world that exists, and do more to stimulate, develop, and uphold the industries of the country, reward the labors of husbandmen and manufacturers, and add to the general comforts of modern civilized life, than any other material agency ,-if, ,indeed" aQ ,agency may be called wholly material which attracts and draws, its circle of activities the ablest and best minds of the country. As is said by the supreme court ofIllinois in Railroad Co. v. Smith, 62 Ill. 268: "The benefits resulting to the people of the state from our system of rail· roads are, ,untold and incalculable. The mind can scarcely grasp them. Hailroads have almost superseded all other means of intercommunication between the several parts of our extensi ve and growing state. They ha ve become an absolute necessity, indispensable to our increased growth, and to the removal of our immense surplus, They have added millions to our taxable property, given augmented facilities to evel'y department of trade, enriched the mass of the people, largely enhanced the value of our lands, built up manufactures, and brought us into close proximity with the best markets of the country. All share in. the blessings flowing from them. Railroads are in truth the people's highways for pleasure and business and commerce. Without them, our internal trade would languish and die, and our corn and wheat rot in our granaries." In Brodhcarl v. Milwaukee, 19 Wis. 658, which was a case under the state Jaw for the raising of taxes to pay bounties to volunteers, the court ' held that"To justify a cpurt in declaring a tax void, and arresting proceedings for its collection, the absence of. aUpossibJe public in terest in tbe purposes for wbich
NORTHERN PAC. R. CO. fl. ROBERTS.
the funds are raised must be so clear and palpable as to be immediately perceptible to every mind."
But assuming that to be the rule, though, perhaps, too strongly put, how can any court so shut its eyes and ears to things known to the commonest observation as to say that, in the construction of a line of railway, there is such absence of all' possible public interest as to make the fact immediately perceptible to every mind at first blush? . Again, how does it add anything to the character of a railroad, as be,. ing of a public or private use, for a municipality to take stock in it? It is admitted that, if a county take stock in a railroad, it may then be empowered by the legislature to levy a tax in its aid, though the courtintimate in one case (Phillip8 v. Town of Albany, 28 Wis. 357) that, if they had it to decide over again, the ruling might be different. But it is quite evident that the power of the legislature to raise taxes cannot rest upon any such trivial circumstance. It is not a question of a propel' consideration for a contract, or, if it were, the building of the road would constitute a consideration; but it is a question of legislative power under the constitution, and the right to tax does not require that any consideration or inducement should be paid or held out to the tax-payer. In this respect the power to tax is more far-reaching, pervasive, and arbitrary than that of eminent domain, where a compensation must be paid. In Railroad Co. v. McDonald, 53 Miss. 245, the supreme court of Mississippi lays down what I have no doubt is the correct rule, as follows: "There is rio just distinction between a donation and a subscription for
stock in such an enterprise. To recognize such a distinction is to disregard the fundamental theory of aid to railroads. That is not to make the municipality a stockholder for divid·ends on stock, or direct returns from an invest" ment for profit, but to aid the enterprise for expected benefits to result to the public from its success. The end to be accomplis bed, and not the means of its accomplisbment, by assistance from the municipality, is the matter to be considered. "
The liability to taxation is one of the concessions and sacrifices for the general good which every citizen is required io make when he becomes a member of the body politic. Again, if the question turned upon the matter of taking stock, it would follow that a city or county would be authorized to take stock in any private enterprise, like farming, insurance, or manufacture, and tax the people tQ pay for the same. But no court would ever hold that this could be done. The purpose must be a public purpose, and the use a public use, in order to invoke the taxing power. It is of the very essence of a tax that the money should be raised for a public purpose, and be laid according to some rule of uniformity; otherwise, it would be an arbitrary exaction amounting to confiscation. Equality of taxation means equality of sacrifice, and is required for the same reason that it ought to be in all affairs of government, which should make no distinction of perBons or classes. Mills, Pol. Econ. (5th Ed.) 296. But if the purpose be public, and the rule uniform, it was never held that there must be any other compensation than the supposed general benefit arising out of
the public use to which the money is a.ppropriated.' If the use is: public, there is no need that the county should become an owner in the corto support taxation. If. not public, the taking of stock, and 'bMotning part owner, would do riothing towards the support of such '1'he distinction is too and unsubstll,ntial for any court to . stand upon. The supreme courtof could well afford to stand a:lonetipon this question, if it basis of reason and argumeQt to, support it. But,. iIi ,locjking through tp;ecajles that have 'taken that side of the q,uestion, l' cannot avoid the;cqnviction that the conclusions reached have been founded quite as much upon.what might be regarded as' a wholesome distrust of the legislative discretion as upon any solid legal basis.. But this power of taxation must be lodged somewhere. . It is properly a legislative power, and who can say that the people have erred in intrusting it, under, the constit\ltion, to the legislativewill? And the decision of the question as to what is a public use, in such a degree as to authorize taxation .in its support, would seem to be,6ne as properly to be left to the politician and statesman as to a judge On the bench. There is. no patented monopoly on political wisdom; and, 'if it is the duty of the legislature to keep within constitutional limits, iti-is no less the duty of the ju(liCiary to do the same thing. Both are liable to err, but each should do its utmost to keep within its own pro'per'jurisdiction. Ifthe legislature abuses its discretion, as is liable to be the case, the people have it in their power, always,to correct the evil, either by choosing representatives to carry out t11eir w-ill, or by amending the organic a.ct, as has been done in some of the states, so as to either limit the power of taxation for railroad. purposes, or abolish it altogether. But in a 'majority of the states the powel: is still in force, a,nd, though it may have been abused in some instances, possibly the advancement of the public interest has been as well attained and conserved under such legislation as it would have been without. it; and at . any rate, whatever we may think of the policy, after so many millions and money have been given away by congress,and by the peoof ple of the states, it would seem almost too late now to question the authority. The power of legislation on the part of the states is general, and not specially delegated. It is broader than that of congress; and yet it is settled beyond question, by the highest authority, that the various acts of congress donating the public lands to aid in the construction of railroads are constitutional and valid laws. n may be noted that the chief justice, in the opinion in WMting v. Railroad Co., refers to the case of Hamon v. Vernon, then an unreported case, by the supreme court of Iowa, since reported in 27· Iowa, 28, as allstaining the arrived at by the majority of the court in the Wisconsin case; and so it did, indeed. But after that decision the legislature of Iowa. re-enacted the same statute with amendments, but not changing the principle of the law in any respect; and the supreme court, fA a very well considered opinion, held the law valid, disregarding their prev-iousdecisionin Ha,nson v. Vernon, See Stewart v. Polk Co., 30 Iowa, 9. . The act in Iowa provided" that it shall be lawful for any township,
NORTHERN PAC. R. CO. ti. ROBERTS.
incorporated town, or city to aid in the construction of any projected railroad in this state, as hereinafter provided." Laws 1870, c. 102, § 1. The act did not provide for the taking of any stock, or any special compensation to the towns and cities to be taxed. The court, in a wellopinion by MILLER, J., held that the taxing power is one of the sovereign powers vested in the general assembly, and not being limited, either expressly or by clear implication, by the constitution, to the condition of making compensation, the judicial power possesses no authority to thus limit it. So that about all the aid and comfort, so far as authority goes, which the courts of Wisconsin can rely upon, are the decisions in Michigan. The decisions there have been pronounced .by a very able judge, and rest upon somewhat more consistent, iLnot broader, grounds, as they make no distinction between aid with and without subscription for stock. But Judge COOLEY, in the leading case OD the subject, (People v. Township Board of Salem, 20 Mich; 452,) finally rests the case upon the fact that the policy of 'the state in respect to building railroads bad changed. He says: " "Our policy in that respect has changed. Railroads are no longer public works, but private property. II< ... ... It was at one time, in this state, deemed true policy that the government should supply railroad facilities to the traveling and commercial public; and while that policy prevailed the right of taxation for the purpose was unquestionable." , To my mind, tbis admission gives away the entire' argument, so far as the question of constitutional power is concerned. How a constitu-+, tion could be changed by a change of policy, without changing the constitutionitself, is not so easy to see; and how the policy was changed so long as the legislature, in plain terms and by express enactment, still continued to provide for aid by the several towns and counties of the is also not very apparent. Indeed, the dimensions of such an argument, "to any thick sight, are invincible." I had supposed, to render a law'unconstitutional, it must contravene some express provision of the constitution, and not some supposed general policy not manifested by express terms, (Pattison v. Supervisors, 13 Cal. 175,) and o.lsothat if an act of the legislature may be valid or not, according to circumstances, a court would be bound to presume that such circumstances ex-' isted as would render it valid, (Talbot v. Hudson, 16 Gray, 417.) The learned judge, in his invaluable work upon Constitutional Limitations,: teaches us a safer and better doctrine. He says, using the language of Judge BALDWIN, of the supreme court of the United States: "The rule of law upon this snbject appears to be that, except where the constitution bas imposed limits upon the legislative power, it must be considered as practically absolute, whether it operate according to natural jllstice or' Dj)t, in any particular case. The courts are not the guardians of the rights of the people of the state, except as those rights are secured by some constitutional provisioDwhich comes within the jUdicial cognizance. The protection, against unwise or oppressive legislation, within constitutional bounds. is by an appeal to the justice and patriotism of' the representatives of the peop'e,' If this fail, the people, in their sovereign capacity, can correct the eVil; but'
cou,rtllcannot assume their rights." v,, Boggs, Baldw. 74.
Cooley" Const. Lim. (5th Ed.) 201r
Again: "Nor are the courts at liberty to declare an act void because, in their opinion, it is opposed to a spirit supposed to pervade the constitution, uut not expressed in words. ** * '!tis difficult,' says Mr. 8enator Verplanck, , upon any general principles, to limittbe omnipotence of the sovereign legislative power by interposition, except so far as the express wurds of a written constitution give that authority.'" Cooley, Canst. Lim. 205; People v. Fisher, 24 Wend. 215. ' Still again, Judge Cooley says: "The legislatme is to make laws for the public good, and not for the bene-' fit of individuals. It ,has contl'Ol of the public moneys, and shoull! provide fordisbqrsing them only for public pmposes. Taxes should only be levied for thosepul'poses which properly constitute a pUbl1c burden. But what is for the, Pl,lblic good, and'Yhat are puulic purposes, IIncl what does properly constitute a pnblic burden, are questions which the legislature must decide upon its own judgment, and in respect to which it is vested with a large discration, which caBnot be controlled by the courts, except, perhaps, where its MUon is. clearly evasive, and whel'e, under pretense of a lawful authority, it has asSumed to exercise one that is unlawful. Where the power which is ex· ercised'ialegislative In Its character, the courts can enforce only those tions which the constitution imposes, and nut those implied restrictions which, resting in theory only, the people have been salis/jed to leave to the judgment, patriotism, and sense of justice of their representati ves. " Const. . Lim. *129. . Now, Que would suppose that it would require but a cursory view of tb,is quastion upon its merits, allowing that there were no precedents on the and the question was n.ow to be considered de novo, to see that there is absolutely no limitation upon this power in the state constitution. I have always learned, and have never heard it questioned, that the geneial assembly of a state may lawfully exercise all the legislative power that any free state possesses, except so far as it is limited by the state, or !:?y the United States, constitution. All sovereignty originally inheres in the people, and the people have divided it into three great govern men 411. divisions,-legislative, execu tive,and judicial. It is quite different in that country from whence we derive our laws. In Great Britain, the parliament, and, as we might with propriety say, the house of commons, in these later times, has grown to the stature of a supreme executive as wen as legislative council, besides wielding no small modicum of judicial authority. See Bryce, Amer. Com. (1st Ed.) 278. 'fhe English people are ruled by the house of commons. Bageh. Eng. Const. 2M. He would be a bold judge, indeed, in England, who should refuse to enforce a statute passed by the parliament,because contrary to the English constitution, and in doing so would but marshal the way for his own 'impeachment. . A 1tl.;W in England which changes the constitution is still a law, and be enforced by the coQris. Lord Coke has aaid: .
NORTHERN PAC. R. CO. V. ROBERTS.
"The English parliament may do anything which is not naturally impossi. ble to be done. It may alter the succession of the crown, as it hilS done in more than one instance. or change the constitution. But'it cannot prevent earthquakes, nor alter the course of the seasons."
Except in a few particular in!jtances, such as passing upon the qualifications of its own members, punishing for contempt, and the exercise of the power of impeachment, and trial thereon) a state legislature cannot exercise either executive or judicial power. But in respect to purely legislative authority the legislature is omnipotent, unless restrained and limited by constitutional enactment; and it is not necessary) "in liP.;' case, to look into the constitution, as we must into the United States constitution to ascertain the power of congress, to find the authority for legislative action. It may exercise all that grand residuum of legislative power that belonged originally to the people, and h3,s, not been conferr¢ by them upon nor prohibited to the legislature by provisiop ,of the st,ate constitution. We look into the constitution of the United States for grants of legislative power, but into the constitution of the staw to !lscertain if any limitations have been imposed upon the complete power with which the legislative department of the8tate was vested in its creation,. pooley, Canst. Lim. 207. No doubt 'the severest limitation upon the legislative power comes through this strict division of th,o governmental powers of the state. Many things which parliament migb,t do, a state legislature could not, on account of this written A court, by its judgment and execution founded on due process of law, may take the land or money ofone person, and hand it over to another, tho1,lgh. the purpose be not public at all. But this is a judicial pqwer, and cannot be exercised by the legislature. Now; it seems quite clear that as the legislature has the general authority to raise taxes, in its own discretion, although the power to tax includes the power to destroy,-as said by Chief Justice MAHsHALL,-there being no limit upon the powe,r except what comes, if at all, through this division of the powers of the state into legislative, executive, and judicial,-the courts ought to exercise great caution, and proceed upon no uncertain ground, in adjudging a. law to be unconstitutional, and therefore void) which by its very enactment has been pronounced constitutional and valid by' two equal and · co-ordinate departments of the government. And such is the rule laid down by the courts. No law should be pronounced unconstitutional unless it is clearly so. If there is reasonable doubt, the legislative and executive departments of the state having pronounced it constitutional', and the presumption being always in favor of its constitutionality, tne court should enforce the law, unless clearly convinced that the legislature has transcended its powers. The court of errors of New York, in Olark v.People, 26 Wend. 599, says: co The courts ought not, except in cases admitting of no doubt,to take
tht>mselv6S,tosay that the legislature has exceeded its powers."
In Santo v. State,2 Iowa, 208, the court said:
vol. 42., :
thepoweris univerMllyadmiUed, exert;:weris considered ot anil responsible natUre, and is not resorted to,unless the case be , Similar language is used by the 'court in Mot'1"Ul6nV:. Springtrr, 15 Iowa, 304. lr- Perry 56 N. 530, a case where the authority of the 'legislature to empower towns. to ttlx themselves to aid in the construetionf,M railroads was under'-'eview by the court, JUdge LADD, speaking fot' cottrt, said;', ' ... " , " , "In one view', the duty o,f the court is extremely plain and simple. In an'other,,lt'is very deli(\a'te. and not free from difficulty. We, have not to inquire into tlie.p.olicr'Of'the'law, or, if the purpose be admittedti> be pUblic, whether the.suppOSed pllblicgood to be attained was sufficient to justify the legislature :in C10nfernng upon two-thirds of ,tlle, legal voter-s (,If a town the power to de,vote, only their property, bl.lttbat of the ,un Willing other third, to .. 4.11 me,re questionll qf expediency, and all questions respectingthe jl1stoperation'of the law. Within the limits prescribed by the constituti0A. were settlE'd by thl' legislature when it was enacted. 1 The courthave onlY'tb pla.ce 'the statlite aM the (:onstitution side by side, 'undsay whether t'lrere is: suell a conflict between .tbetwo that they can not stand .together. If. there appearqto be a <'Onflict. ant;!. the COlltliCt is so pl\lpablel'8, no that the legislature hav,e undertaltent9do thl!y were p.rohibited, from doing by the constitution, tlie',court cannot avOid high, unwelcome. duty of l1eclaring the 'statute beclLuse the cdnsti,tution,' and not the statlite. iethe para,mount 'law; and the coutt must interpret and administer'lIll the laws alike." ',' The court Of'Vermont,; Same question before it, ,has sliid':' .' i . ' , , , ! 'l'It in 'dealing W;lth this question ot' power, that the preSl\mptions are all in favor of thevaMity Of the action called in question : and, 'if we find'invalidity at aU. it must be upon clear and :irrefragable evidence: !that, theactioncballenged is in conflict with some exprovisioD of tbe.'Qrganic lawlor)ts nec6/>sary implications." Town 0/ Benninqton v, Park,5,Q Vt.191. .,.4,lso. to the same effect, Lane v· Dorman, S'Scam.238 ; Foster v.Bank,16 Mass. 245: Bartj'01'd Bridge Co. v. Union FerrY 00., 29 Conn. 221. ". . , view Wll.ytl1ke of the case; the use is a public one; and an Q.Ccqmull;\tion of views,ifthere were spacelllld need for such riUustration, to light On the question. The owners(Jf common, ,carriers. ' .They cannot'distinguieh' betweoen, different pers()D.s;They nlust carry for all that come, and for controijable.by the public. If they refuse· to receive that}s offereQ.] thllY are liaqle to an action in damages; and, in!:leed, in, such case the aggrieved Pttrty would not confined to the elow renledy by action, butro,ight S1;le out a mandamu8 to compel the corpocarry his' gQo,ds. Th,eymust provide adequate and sufficient 'rolling stock to do the business' offered, and cannot excuse themselves for not receiving freight or rassengers on the ground of the lack of any is in their power to provide. Apply any of these to a' corpdration. the use of whose property is private, and the distinction between a pri'Vate;,8Jld, P\lQ!,i:c11fJea.a apparent. ,Now), the
l'ORTHERN PAC. R. CO.
question presents itself something in this shape: Is itclear, beyond any' reasonable, doubt, and, by evidence irrefragable. that the use of a railroad' is not a public use? If the use is strictly private,then the legislature' cannot authorize taxation in its aid, because it cannot take the property or money of one person, and hand it over to another, with or without compensation, for a mere private purpose. But, if the use be a public use, then it isadmitted that the legislature may levy a tax to aid in the construction. It seems almost a self-evident proposition that the use of a railroad is public. It is so as a matter of common knowledge. It has been so adjudged by the United States supreme court, and by the highest courts in every state in the Union, for the purpose of invoking' the power of eminent dOl1ui.inin the condemnation of real estate for right of way, depot grounds, round-houses, freight-yards, etc. Indeed, this power was thoroughly settled in the leading case of Beekman v. Railroad Co., 3 Paige, 45, and has never questioned since. Under the stitution of this state, and, 1 apprehend, all the states, this power cannot be exercised by the legislature except for a publio use. and upon payment of a just compensation; and this great power the state might no doubt exercise without compensati6n awarded, ,but for such constitutionallimitation. Allowing this to be the, true doctrine in this and all of the states, who will say, that the use of a railroad, although owned by a private corporation, is so clearly and universally a public use where the question arises as to the lawful exercise of the power of eminent domain, but that, when the kindred question of taxatien is raised, iti8 just as clearly, and beyond reasonable doubt, not a pl1blic, but a private, use? One would think it were not in the power of dialectics to maintain such a proposition, and that the Socrates of Plato would quail at the task; and, after reading and re-reading the opinions of Chief Justice DIXON and of Judge COOLEY, where this Herculean labor is undertaken, ' I find it quite impossible to call to mind the reasoning by which they severally ,arrive at their conclusions. One would suppose, if a reason could be given forSl1ch a distinction, it might be stated in few words, and in Q form to be appreciable to the understanding. But-j after reading through pages and folios, there is not much to remember but words, which seem all the more difficult to fix in the mind on account of the lack of matter which attends them. The question is well stated by the supreme court of New Hampshire! in Perrifv; Keene, us follows:
"The argument then admits that the use is public, but holds that it is not' suffici..ntlypubIIc, or is not puLJlic in the particular way, to bring ft 'within the category ot objects for whIch taxes may be illlposet!. Either in degree or kind, thl' pnblic quality it confessedly possesses falls short of that requirl'd by the constitution to justify an exercise of the taxing power. Itis incumbpttt on those who und'rtake to maintain this distinction to poin.t out. elearly the differences on which it rests. ,Anassertion that it does exist is notenough; the argument advanced by a repetition of such assertion, even though madeinconfil1ent and emphatiCterms. What is the rU,le where7 with we are ,to determine whena given public useis of a'charactet to rant the of one power, and not the other? What. is the principle .t().
be applied? No one will contend that the power of eminent domain, and the taxing .power, though simi.lar, are in all respects identical; but all agree that neithereanbe exercised exceptfor a pul:llic erid. Which is the higher power; or, in other words, which requires the greater public eXigency to call it forth? What is the nature of those Objects wbich lie on one side of the line. and what of those upon the otber side? Where is the line to be drawn, and what are the reasons that determine its location? These are some of the questions not to be evaded or met with mt(rh speech and ingenious ratiocination, but to be answered fairly and clearly. before a court can say that the If'gislature hal'e, beyond all reasonable doubt. transcended their constitutional powers in declaring that a use which ill of such character-that is, public in such sense that pl'ivllte property may be taken and appropriated in its behalf-is also public in such a' sense that taxes may be levied in its behalf. In those cases to which we have been referred by plaintiff's counsel, where an attempt to do. this is. made. it does appear to me the failure has been renl;!ered only more conspicuous by the eminent ability of those who have undertaken the task; most carefl\1 examination of those cases, if we were told that a and. railroad. being a 'for which the lands of individual!! may be taken against their consent, is not a pUblic.purpose for which taxes may be imposed, ], should be tltterly at a loss what .sound to give fori the distinction. or terms to frame a rule to govern the future action 'of the legislature in in casesof,'l descriptioll. Unless th,e are to stand between the people :representatives,atid declare when the latter have misjudged in their deliberatiqns, and setup ,limits to the legislative POWPrll of the general court not found In the organic law of the state; it is clear to my mind that this law cannot· be annulled bya judicial sentence or decree." 56N. H. 540. . The always .exercised the authority to tax the people to build and hignways, and theautnority is not questioned. It may do So itSlelf,;or,throttgh individuals qr: corporations, and authorize the establishment of toll-gates. It may build a road through the state, or any part of it. It may authorize a town or county to build a town or county, road, and tax its people for its).ponstruction and maintenance. This power has been recognized and Pil'l!-qticed from very ancient days, and from the first dawn pf civilized life. It was common in the times of the Roman empire, and has come down to us from immemorial days. and through immemorial usage. It has always been exercised in this conntry from .the first settlement of the colonies. The practice and the principle are older than the common law, or the present nations of the world, and have been transmitted to us from a period now darkened to view by time and distance. Laying aside, then, the question of public policy, 'of which the state must judge, why should the naked authority be now questioned simpl>' because the necessities of civilization have demanded a more commodious method .of travel than the old common high,¥ay could afford ? The following are some of the leading cases on the subject: v. Railroad (Jo., 3 Paige, 45; Brocawv. Gibson Co., nInd. 543; Allisemv. Railway (Jo., 10 Bush, 1; Town of Bennington v. Park, 50 Vt. 192; .Perry·v. Kee:ne,56 N. H. 514; Walker v. City of Oincinnati, 21 Ohio St. 14; Shatpless v. Mayoro! PhiJ..adelphia,21 Pat St. 147; Railroad C<J. V. Smith, 82 Ill. 268; HaUe:nbeck v. Hah.n, 2 Neb. 377; Ex parte Sehna kG. R. Co., 45 Ala. 696,; David$onv. Commissioners, 18 Minn. 482. (G;il. 482 i) Railrqdd 00. N;eDonald, 53 Miss. 240; feorle v. MitcheU, 35 N. Y.
GLOBE ROLLING-MILL CO. II. BALLOU.
551; ffi"bbonBv.Railroad 00.,36 Ala. 410; 'J!hornJJOn V. Lee 00.,3 Wan. 327; Bloodgood v. Railroad 00., 18 Wend. 10; Worcester v. Railroad Corp., 4 Mete. 564; St.ewartv. Polk 00.,30 Iowa, 9; Town of QueenBburyv. Culver, 19 Wall. 83; Railroad v. Oountyof Otoe, 16 Wall. 667; Oleott v. Supertnsors, Id. 678; LouiBvilk v. Bank, 104 U. S. 469; Fairfield v. County oj GaUatin, 100 U. S. 47; Oounty of v. Fairfrld, 105 U. S. 370; St. Joseph 7». v. Rogers, 16 Wall. 664; Rogers v. Burlington, 3 Wall. 664; Mitchell v. Burlington, 4 Wall. 270. The demurrer is overruled. and defendants iiven 30 days in which to answer the bill of complaint.
WALLACE, J. The demurrer to the bill must be sustained, upon the authority of the previous decisions of this court in Ctaflin v. Mc[)errTUJtt, 12 Fed. Rep. 375, and Walser v. Seligman, 13 Fed. Rep. 415. As those cases were decided by me, I feel free to say that I doubt whether they do not adopt a" too technical view of the right of a creditor whose judgment has been obtained against his debtor at the place of his domicile, and whose execution has been issued there, and returned unsatisfied, to maintain a creditors' bill in a court of another state; and I may be permitted to express the hope that the present case may be taken to the supreme court for review. . .
t1. BALWU d
(Ci7'cI£« Coun. B. D. New YqrJc. lIa)' &, 1890.)
Judgment against an iDso!vent corporation lD the state of Ita orgaDbatlon, ad return of execution UDsatisfied. will not authorize a bill by the judgment creditor In another state, where no judgment has been reoovered lIalnlt It. to enforce pay. ment of a subscription to ita .took.
In Equity. On demurrer. J. D. BranflOn, for plaintiff. 77wmaa ThaihtJr, Cor defendants. SHIPMAN, J. This is a demurrer to the platntift"11 bm in equity.. The bill that the defendant subscribed to the capitAl1stockoCan Ohio railroad corporation, which 8ubscriptions never. paid, andthilt he