1. There is nothing in the Constitution of Michigan, established
A.D. 1850, and which ordains among other things that
"No person shall be deprived of property without due process of
law. The credit of the state shall not be granted in aid of any
person, association, or corporation. The state shall not be a party
to or interested in any work of internal improvement,"
which makes void the Act of the legislature of that state passed
March 22, 1869, and by which it was enacted
"That it shall be lawful for any township or city to pledge its
aid to any railroad company now chartered, organized, or that may
hereafter be organized under or by virtue of the laws of the State
of Michigan, in the construction of its road, by loan or donation,
with or without conditions, for such sum or sums, not exceeding 10
percentum of the assessed valuation then last made of the real and
personal property in such township or city, as a majority of the
electors of such township or city voting shall, at a meeting or
meetings to be called for that purpose, determine."
2. The decisions of the highest court of the state to the
contrary will not be respected by this Court when such decisions
are not satisfactory to the minds of the judges here and when the
matter in question is bonds issued in negotiable form by a township
of that state, and now in the hands of a citizen of another state
or a foreigner,
bona fide and for value paid.
3. Questions relating to bonds issued in a negotiable form under
such an act involve questions relating to commercial securities,
and whether under the constitution of the state such securities are
valid or void belongs to the domain of general jurisprudence.
4.
County of Otoe v. Railroad
Company, 16 Wall. 667, and
Alcott v.
Supervisors, 16 Wall. 678, affirmed.
Error to the Circuit Court for the Western District of Michigan,
in which court Talcott brought assumpsit against the Township of
Pine Grove, one of the municipalities of the State of Michigan, to
recover the amount of certain bonds issued by that township to aid
in the construction of a railroad running through the said township
from Kalamazoo to South Haven, both places being in Michigan.
The Constitution of Michigan (adopted A.D. 1850) thus
ordains:
"ARTICLE VI, § 32. No person shall be compelled in any
Page 86 U. S. 667
criminal case to be a witness against himself,
nor be
deprived of life, liberty, or
property without due process
of law."
"ARTICLE XIV, § 6. The credit of the state shall not be
granted to or in aid of any person, association, or
corporation."
"§ 8. The state shall not subscribe to or be interested in
the stock of any company, association, or corporation."
"§ 9. The state shall not be a party to or interested in
any work of internal improvement, nor engage in carrying on any
such work, except in the expenditure of grants to the state of land
or other property."
"§ 11. The legislature shall provide a uniform rule of
taxation, except as to property paying specific taxes. Taxes shall
be levied upon such property as shall be prescribed by law."
"ARTICLE XV, § 13. The legislature shall provide for the
incorporation and organization of cities and villages, and shall
restrict their powers of taxation, borrowing money, contracting
debts, and loaning their credit."
"ARTICLE XVIII, § 2. When private property is taken for the
use or benefit of the public, the necessity for using such property
and the just compensation to be made therefor (except when to be
made by the state) shall be ascertained by a jury of twelve
freeholders, residing in the vicinity of such property, or by not
less than three commissioners appointed by a court of record, as
shall be prescribed by law."
"§ 14. The property of no person shall be taken for public
use without just compensation therefor. Private roads may be opened
in the manner to be prescribed by law, but in every case the
necessities of the road and the amount of all damage to be
sustained by the opening thereof shall be first determined by a
jury of freeholders,"
&c.
These provisions of the constitution being in force, the
Legislature of Michigan, on the 22d of March, 1869, passed an act
entitled
"An act to enable any township, city, or village to pledge its
aid, by loan or donation, to any railroad company now chartered or
organized under and by virtue of the laws of the State of Michigan,
in the construction of its road."
The act enacted:
"That it shall be lawful for any township or city to pledge its
aid to any railroad company now chartered, organized, or that
Page 86 U. S. 668
may hereafter be organized, under and by virtue of the laws of
the State of Michigan, in the construction of its road by loan or
donation, with or without conditions, for such sum or sums, not
exceeding ten percentum of the assessed valuation then last made of
the real and personal property in such township or city, as a
majority of the electors of such township or city voting shall, at
a meeting or meetings called for that purpose, determine."
The manner in which the vote should be taken and the bonds
executed was provided for in subsequent sections.
Under this act, the bonds on which the suit was brought were
issued. The bonds, and the coupons attached to them, were made
"payable to bearer." It was not denied that the directions given in
the act were carried out.
The declaration set forth in special counts the cause of action.
The township demurred on the sole ground that the law in question
was in conflict with the constitution of the state, and judgment
being given against the township, it brought the case here.
The act under which the bonds were issued had been the subject
of very full consideration by the Supreme Court of Michigan in
Bay City v. State Treasurer, [
Footnote 1] and an act of a similar character had been
previously considered by the same court in
People v.
Salem. [
Footnote 2] Both
acts were declared to be in conflict with the constitution, and
void.
In the former case (Graves, J., dissenting, and delivering an
opinion in dissent), the unconstitutionality of the law was placed
upon several distinct grounds, some of which were more fully
insisted on than others.
In the latter case it was held (Cooley, J., delivering on this
occasion, as he had done on the former, the opinion of the court),
that the statute was in conflict with Article VI, section
thirty-two, already quoted, which provides that no person shall be
deprived of his property without due process of law, and also with
the provisions of Article XIV, sections eight and nine, also
already quoted, which prohibit the
Page 86 U. S. 669
state from being a party to or interested in any works of
internal improvement.
The court observes that the state had, prior to 1850, when the
constitution was established, been engaged in works of the
description named and had owned some of the principal railroads in
the state. It refers to the history of the times in which the
constitution was adopted, and points out how previously to that
time the people had been fraudulently led into the creation of
debts for railroads of which they denied the moral obligation, and
in consequence of which their public credit had been impaired; and
how -- interpreting these provisions as effectually guarding them
against the like evils and dangers for the future -- the people
were induced more than by any other motive to adopt the
constitution. The court said:
"All these provisions were incorporated by the people in the
constitution as precautions against injudicious action by
themselves, if in another time of inflation and excitement they
should be tempted to incur the like burdensome taxation in order to
accomplish public improvement in cases where they were not content
to wait the result of private enterprise. The people meant to erect
such effectual barriers that if the temptation should return, the
means of inflicting the like injury upon the credit, reputation,
and prosperity of the state should not be within the reach of the
authorities. They believed these clauses of the constitution
accomplished this purpose perfectly; and none of its provisions had
more influence in recommending that instrument to the hearty
goodwill of the people."
"In process of time, however, a majority in the legislature were
found willing, against the solemn warning of the executive, to
resort again to the power of taxation in aid of internal
improvement. It was discovered that though 'the state' was
expressly inhibited from giving such aid in any form, except in the
disposition of grants made to it, the subdivisions of which the
state was composed were not under the like ban. Decisions in other
states were found which were supposed to sanction the doctrine that
under such circumstances, the state might do indirectly through its
subdivisions what directly it was forbidden to do. This a way was
opened by which the whole purpose of
Page 86 U. S. 670
the constitutional provisions quoted might be defeated. The
state could not aid a private corporation with its credit, but it
might require each of its townships, cities, and villages to do so.
The state could not load down its people with taxes for the
construction of a public improvement, but it might compel the
municipal authorities, which were its mere creatures, and which
held their whole authority and their whole life at its will, to
enforce such taxes, one by one, until the whole people were bent to
the burden."
"Now, whatever might be the just and proper construction of
similar provisions in the constitutions of states whose history has
not been the same with our own, the majority of this Court thought,
when the previous case was before us, and they still think, that
these provisions in our constitution do preclude the state from
loaning the public credit to private corporations, and from
imposing taxation upon its citizens, or any portion thereof, in aid
of the construction of railroads. So the people supposed when the
constitution was adopted. Constitutions do not change with the
varying tides of public opinion and desire; the will of the people
therein recorded is the same inflexible law until changed by their
own deliberate action; and it cannot be permissible to the courts
that, in order to aid evasions and circumventions, they shall
subject these instruments, which in the main only undertake to lay
down broad general principles, to a literal and technical
construction, as if they were great public enemies standing in the
way of progress, and the duty of every good citizen was, to get
around their provisions whenever practicable, and give them a
damaging thrust whenever convenient. They must construe them as the
people did in their adoption, if the means of arriving at that
construction are within their power. In these cases we thought we
could arrive at it from the public history of the times."
Notwithstanding these decisions, the court below gave judgment
against the township, and it, accordingly, brought the case
here.
Page 86 U. S. 672
MR. JUSTICE SWAYNE recapitulated the facts of the case, and
delivered the opinion of the Court.
The facts of the case are few and undisputed, and the legal
question presented has been settled by this Court.
On the 22d of March, 1869, the Legislature of Michigan passed an
act entitled
"An act to enable any township, city, or village to pledge its
aid, by loan or donation, to any railroad company now chartered or
organized under and by virtue of the laws of the State of Michigan,
in the construction of its road."
The plaintiff in error was the defendant in the court below. It
is a body corporate in the County of Van Buren, in Michigan. The
case made by the declaration is as follows:
The Kalamazoo & South Haven Railroad Company is a
corporation organized under the laws of Michigan, having for its
object the construction of a railroad from the Village of Kalamazoo
to the Village of South Haven in that state. The line of its
proposed route passed through the Township of Pine Grove. Pursuant
to the act of the legislature before mentioned, a meeting of the
electors of the township was called to vote upon the proposition
whether the township
Page 86 U. S. 673
should, in aid of the construction of the road, give to the
company its coupon bonds to the amount of $12,000, bearing interest
at the rate of ten percent per annum, one-sixth of the principal to
be payable at the end of each succeeding year, from March 1, 1870,
until the whole amount was paid, the interest to be payable
annually from that time. A majority voted for the proposition, and
the bonds were issued. They bore date June 1, 1869. The plaintiff,
Talcott, was the holder and owner of a part of the bonds and
coupons. They are described in the declaration, and were overdue.
The township filed a demurrer. It was overruled by the court, and
the township electing to stand by it, judgment was given for the
plaintiff. The township thereupon sued out this writ of error, and
has thus brought the case before this Court for review.
It is not alleged that the bonds were not issued in conformity
to the act, nor that there has been any want of good faith on the
part of the railroad company, nor that the plaintiff, Talcott, was
not a
bona fide
holder. But it has been argued that the act of the legislature
was void. This presents the only question in the case, and it is
fundamental. If the foundation fails, the entire superstructure
reared upon it must fall. It is said the act is in conflict with
the constitution of the state.
It is an axiom in American jurisprudence that a statute is not
to be pronounced void upon this ground, unless the repugnancy to
the constitution be clear, and the conclusion that it exists
inevitable. Every doubt is to be resolved in support of the
enactment. The particular clause of the constitution must be
specified and the act admit of no reasonable construction in
harmony with its meaning. The judicial function involving such a
result is one of delicacy, and to be exercised always with caution.
[
Footnote 3] It must be
admitted that the constitution here in question contains nothing
directly adverse upon the subject. But we have been referred in
Page 86 U. S. 674
this connection to the following provisions: the thirty-second
section of Article VI declares that
"No person in any
criminal case shall be compelled to
be a witness against himself
or be deprived of life, liberty,
or property without due process of law."
Here there is no imputation of crime. The clause is confined to
judicial proceedings. Article XIV, clauses six, eight, and nine,
provide that the credit of the state shall not be granted to, or in
aid of, any person, association, or corporation; that the state
shall not be interested in the stock of any corporation, and that
the state shall not subscribe to, or be interested in, any work of
internal improvement, or engage in carrying on any such work,
except in the expenditure of grants to the state of land or other
property. In this case, it is the township, and not the state, that
is concerned. The state has done nothing and is in nowise
liable.
The present constitution was adopted in the year 1850. Before
that time, numerous acts involving the same principle with the one
here in question had been passed by seventeen states. Congress, by
the Act of June 3, 1856, [
Footnote
4] granted a large quantity of land to Michigan to be used in
aid of the construction of railroads. This land was appropriated by
the state to several different companies pursuant to the provisions
of the act. Other companies were subsequently aided in the same
way. In 1863 began a series of special legislative acts authorizing
the municipal subdivisions of the state named therein to give their
aid respectively to the extent and in the manner prescribed.
Between that time and the year 1869, thirty such statutes were
enacted. In the latter year, the general law was passed under which
the bonds in question were issued. This summary shows the
understanding in the legislature, and out of it, in the state, that
there was no constitutional prohibition against such legislation.
It does not appear that its validity was ever in any instance
judicially denied until the year 1870.
The case as to the constitution is a proper one for the
application
Page 86 U. S. 675
of the maxim
expressio unius est exclusio alterius. The
instrument is drawn with ability, care, and fullness of details. If
those who framed it had intended to forbid the granting of such aid
by the municipal corporations of the state, as well as by the state
itself, it cannot be that they would not have explicitly said so.
It is not to be supposed that such a gap was left in their work
from oversight or inadvertence.
The eleventh clause of the same article declares that the
legislature shall provide a uniform rule of taxation, except as to
property paying specific taxes, and that taxes shall be levied upon
such property as shall be prescribed by law. The object of this
provision was to prevent unjust discriminations. It prevents
property from being classified and taxed as classed, by different
rules. All kinds of property must be taxed uniformly or be entirely
exempt. The uniformity must be coextensive with the territory to
which the tax applies. If a state tax, it must be uniform all over
the state. If a county or city tax, it must be uniform throughout
such county or city. [
Footnote
5] But the rule does not require that taxes for the same
purposes shall be imposed in different territorial subdivisions at
the same time. If so, a county could not levy a tax to build a
courthouse, jail, or infirmary without rendering it necessary for
every other county in the state to do the same thing without
reference to the different circumstances of each one. So here, one
township through which the railroad was to pass, expecting to be
largely benefited by its construction, might give its bonds and
impose the tax requisite to meet the principal and interest, while
another township similarly situated might refuse to do so. The rule
would have no application to the latter.
The second and fourteenth clauses of Article XVIII prescribe
that when private property is taken for public use, just
compensation shall be made to the owner. These provisions relate to
the exercise of the right of eminent domain.
The thirteenth clause of Article XV declares that
"The
Page 86 U. S. 676
legislature shall provide for the incorporation and organization
of cities and villages, and shall restrict their powers of
taxation, borrowing money, contracting debts, and loaning their
credit."
The power here in question was exercised by a township. The
language of this clause clearly implies that the powers to be
restricted may be exercised; and what is implied is as effectual as
what is expressed. [
Footnote 6]
Congress can pass no laws but such as the federal Constitution
expressly, or by necessary intendment, permits.
The legislative power of a state extends to everything within
the sphere of such power except as it is restricted by the federal
Constitution or that of the state. In the present case, we have
found nothing that in our judgment warrants the conclusion that the
act in question is wanting in validity by reason of its
unconstitutionality.
But it has been argued that aside from any constitutional
prohibition the legislature had no power to authorize the
imposition of a tax for any other than a public purpose, and that
this act is not within that rule. Conceding for the purposes of
this opinion the soundness of the first proposition, the second can
by no means be admitted.
Though the corporation was private, its work was public, as much
so as if it were to be constructed by the state. Private property
can be taken for a public purpose only, and not for private gain or
benefit. Upon no other ground than that the purpose is public can
the exercise of the power of eminent domain in behalf of such
corporations be supported. This view of the subject has been taken
by the Supreme Court of Michigan. [
Footnote 7] But upon other grounds, we think the public
character of such works cannot be doubted. Where they go, they
animate the sources of prosperity, and minister to the growth of
the cities and towns within the sphere of their influence. Unless
prohibited from doing so, a municipal corporation has the same
power to aid in their construction as to procure water for its
waterworks, coal
Page 86 U. S. 677
for its gas works, or gravel for its streets from beyond its
territorial limits. [
Footnote
8] Under the limited powers conferred by the federal
Constitution, Congress has frequently given aid in such cases. The
Pacific railroads and the Louisville canal furnish instances of
such action by that body. The gift to the sufferers from the
overflow of the Mississippi, and prior acts of the kind, must also
be borne in mind. Cannot a state legislature do the same
things?
It does not belong to courts to interpolate constitutional
restrictions. Our duty is to apply the law, not to make it. All
power may be abused where no safeguards are provided. The remedy in
such cases lies with the people, and not with the judiciary.
We pass by without remark the point whether in cases like this,
the public or private character of the work is not a legislative,
rather than a judicial, question.
It is insisted that the invalidity of the statute has been
determined by two judgments of the Supreme Court of Michigan,
[
Footnote 9] and that we are
bound to follow those adjudications. We have examined those cases
with care. With all respect for the eminent tribunal by which the
judgments were pronounced, we must be permitted to say that they
are not satisfactory to our minds. We think the dissenting opinion
in the one first decided is unanswered. Similar laws have been
passed in twenty-one states. In all of them but two, it is believed
their validity has been sustained by the highest local courts. It
is not easy to resist the force of such a current of reason and
authority. The question before us belongs to the domain of general
jurisprudence. In this class of cases, this Court is not bound by
the judgment of the courts of the states where the cases arise. It
must hear and determine for itself. Here, commercial securities are
involved. When the bonds were issued, there had been no
authoritative intimation from any quarter that such statutes were
invalid. The legislature affirmed their validity in
Page 86 U. S. 678
every act by an implication equivalent in effect to an express
declaration. And during the period covered by their enactment,
neither of the other departments of the government of the state
lifted its voice against them. The acquiescence was universal.
[
Footnote 10]
The general understanding of the legal profession throughout the
country is believed to have been that they were valid. The National
Constitution forbids the states to pass laws impairing the
obligation of contracts. In cases properly brought before us that
end can be accomplished unwarrantably no more by judicial decisions
than by legislation. Were we to yield in cases like this to the
authority of the decisions of the courts of the respective states,
we should abdicate the performance of one of the most important
duties with which this tribunal is charged and disappoint the wise
and salutary policy of the framers of the Constitution in providing
for the creation of an independent federal judiciary. The exercise
of our appellate jurisdiction would be but a solemn mockery.
[
Footnote 11]
The question here under consideration was fully considered by
this Court in
Railroad Company v. County of Otoe,
[
Footnote 12] and in
Olcott v. Supervisors. [
Footnote 13] We have no disposition to qualify anything
said in those cases. They are conclusive in the case before us.
In Sedgwick on Statutory and Constitutional Law, [
Footnote 14] it is said:
"It must be further borne in mind that the invalidity of
contracts made in violation of statutes is subject to the equitable
exception, that although a corporation in making a contract acts in
disagreement with its charter, where it is a simple question of
capacity or authority to contract arising either on a question of
regularity of organization or of power conferred by the charter, a
party who has had the benefit of the agreement cannot be permitted
in an action founded on it to question its validity. It would be in
the highest degree inequitable and unjust to permit the defendant
to repudiate
Page 86 U. S. 679
a contract the fruits of which he retains. And the principle of
this exception has been extended to other cases. So a person who
has borrowed money of a savings institution upon his promissory
note, secured by a pledge of bank stock, is not entitled to an
injunction to prevent the prosecution of the note upon the ground
that the savings bank was prohibited by its charter from making
loans of that description."
The authorities referred to sustain the text. [
Footnote 15] But it is not necessary to
place our judgment upon this ground. We rest it upon the other
views which have been expressed, and the authority of our own
preceding adjudications.
Judgment affirmed.
THE CHIEF JUSTICE did not sit in this case, and took no part in
its decision.
JUSTICES MILLER and DAVIS dissented.
[
Footnote 1]
23 Mich. 499, 504.
[
Footnote 2]
20
id. 452.
[
Footnote 3]
Twitchell v. Blodgett, 13 Mich. 127;
Tyler v.
People, 8
id. 320;
People v. Mahany, 13
id. 482.
[
Footnote 4]
11 Stat. at Large 21.
[
Footnote 5]
Gilman v. City of
Sheboygan, 2 Black 514.
[
Footnote 6]
United States v.
Babbit, 1 Black 61.
[
Footnote 7]
Swan v. Williams, 2 Mich. 427.
[
Footnote 8]
Meyer v.
Muscatine, 1 Wall. 389.
[
Footnote 9]
People v. Salem, 20 Mich. 452;
Bay City v. State
Treasurer, 23
id. 499.
[
Footnote 10]
Gelpcke v.
Dubuque, 1 Wall. 175.
[
Footnote 11]
Butz v.
Muscatine, 8 Wall. 579.
[
Footnote 12]
83 U. S. 16 Wall.
667.
[
Footnote 13]
83 U. S. 16 Wall.
678.
[
Footnote 14]
Page 90.
[
Footnote 15]
Palmer v. Lawrence, 3 Sandford's S.C. 162;
Steam
Navigation Co. v. Weed, 17 Barbour 378;
Chester Glass Co.
v. Dewey, 16 Mass. 94;
Steamboat Co. v. McCutcheon,
13 Pa.St. 13;
Potter v. Bank of Ithaca, 5 Hill 490;
Suydam v. Morris Canal & Banking Co., ib. 491;
Sacket's Harbor Bank v. Lewis County Bank, 11 Barbour 213;
Mott v. United States Trust Co., 19
id. 568.
