City of Bridgeport v. Housatonuc Railroad

Cumscn, J. The Unusual practical importance of some of the questions involved in this case, and the zeal and ability With which they have been discussed, have demanded and — 493 — received from us an investigation as deliberate and mature as the performance of our other duties have enabled us to And the result has been, a clear opinion, that the documents offered by the original plaintiffs in the countv court, were , J , , , , ’ / that court properly admitted m evidence, as material upon the issue joined in the case. The action is brought to recover the interest upon a bond executed by the city of Bridgeport, with all the legal formalities and solemnities necessary to give validity to such an instrument. The agents of the city were duly appointed and empowered, and their signatures, with the seal of the corporation, have been affixed to the bond. The defendants have pleaded the general issue of non est factum, to the action f under which plea, unembarrassed, as we think, by any matter of estoppel, they have a right to contest and deny the power of the city to execute the bond and the coupon or certificate in suit. Whether it was incumbent upon the plaintiffs, after having proved the authority of the agent, and the execution of the bond, then to prove the right and power of the city to make the contract under consideration, we need not enquire; it was certainly competent for them, in this preliminary stage of the investigation, to make this proof; and the evidence objected to materially and directly conduced to prove this important part of the issue. There have been some questions discussed by counsel, which we have not supposed necessarily involved in the case; and some others, naturally enough suggesting themselves to us in the course of the investigation, which are not presented by this record: such as, whether the original charter of the city of Bridgeport gave authority, of itself, to the city, to execute this bond ; and in what manner a judgment and execution in favour of the plaintiffs may be enforced and collected. The essential questions arising here, we think, grow out of the resolution of the General Assembly of May, 1838. The most material facts necessary to a proper apprehension of the case, and appearing upon the bill of exceptions, are, that as early as March 2, 1837, the city of Bridgeport, at a legal meeting, voted, that it was expedient to aid in the construction of The Housatonuc Rail-Road, by subscribing — 494 — 100,000 dollars to its capital stock, and at the same time, ap- . \ , . . , an agent to make subscription. Agents were also . , „ , , appointed to procure funds necessary to pay the sum subscn-procuring loans of money, at interest not exceeding 6 per cent, per annum, with power to pledge the credit of the ....... * . city therefor, by issuing certificates, or by promissory notes, or by securities in any other form. The agents of the city accordingly did subscribe the sum required on the books of the Rail-Road Company; and this act was ratified and confirmed, by the city, at a legal meeting, ^on the 25th day of March, 1837. At this meeting, a further subscription of 50,000 dollars was authorized, and the agents directed, as before, to negotiate the funds required to meet it. Until this time, the city had probably believed, that their act of incorporation conferred sufficient powers to warrant its action in this matter. But either doubting it now, or from other precautionary motives, it, at this meeting, voted, that a petition should be presented to the legislature for the passage of an act necessary to give full force and validity to its former proceedings on this subject, and that such further powers might be conferred upon the city as should be necessary and proper to carry said proceedings into effect. The GeneraftAssem-bly accordingly, in May, 1838, granted the petition, and ratified, confirmed, established and made obligatory on said city, and the citizens thereof, all their former proceedings, in the same manner, and to the same extent, as if all the necessary powers for that purpose had been conferred by the charter of the city ; and also granted to the city full power and authority, at any legal meeting, specially warned for that purpose, to adopt such other measures, as, in the opinion of such meeting, might be necessary to carry into effect, in a manner most conducive to the interests of the city, all the former proceedings, and to provide for the payment of the subscriptions, and the issuing and negotiation of said loans, notes, cer. tífica tes, or scrip, or such other securities, as the city should authorize, order, or direct. This legislative act or resolve was afterwards duly accepted and approved, by the freemen of the city, in conformity with the proviso of the resolution. This city is a municipal corporation, an artificial body, capable of being invested with, and of exercising, powers of great extent; and if the powers conferred upon it, by the — 495 — resolution of 1838, had been created by its original act of incorporation, we could not have doubted their efficacy, nor- . , , ’ . . , , P the legal obligations incurred by a proper exercise ot them. And we have not been able, after a full consideration of the aforesaid resolution, produced, as it was, by the considerate application of the city itself, and adopted and ratified, as it has been, by the freemen of the city, at a meeting called especially for its consideration, to distinguish between the validity of acts done under its sanction, and acts which might have been performed, by virtue of the same authority contained in an original charter. Under the authority derived from this resolution, the bond in dispute has been executed with all the legal formalities, ordinarily sufficient to charge either one individual, or a corporation, with the obligation of its payment. Wherefore, then, should not the city of Bridgeport be adjudged liable to pay? Several reasons in opposition have been, with great force, urged upon us. 1. It is claimed, that aside from what is hereafter suggested as a constitutional infirmity of the resolution of 1838, it is necessarily inoperative as a confirmatory act, because, if the proceedings of the city and its agents previous to that resolve, were void, as the defendants suppose, from want of authority in the city to act, they could never be rendered effectual for any purpose, by any act of legislation; and we have been referred, in support of this position, to the principles of the common law applicable to deeds of confirmation inter paries. Although individuals may not have power to make good ab initio, that which was originally void, by subsequent deeds or acts of confirmation ; yet this cannot be true of acts of sovereignty — acts of legislation not conflicting with constitutional right. And in giving a construction to such an act, the only question can be, what was the intention of the legislature ? When this is ascertained, our duty is imperative to give to that intention its legal effect. In the present case, there exists no doubt on this point. The declared purpose of the city in asking legislative interference, was, to give validity to its previous votes, not to perpetuate their infirmity, if such infirmity there was. To comply with the request of the city was the object of the legislature in passing the resolve — not — 496 — to defeat and disappoint it. The end of all confirmatory , 1 1 . . laws, so far as they are intended to be retroactive, is to set 11 p and give original effect to acts before void or inoperative. Such was the object and such the effect of our statute of 1820» confirming void marriages, as declared by this court, in the case of Goshen v. Stonington, 4 Conn. R. 209. And such, also, for many years, has been annually true of the resolves of the General Assembly confirming the void acts of the assessors and boards of relief in making out the tax lists of the towns: and that this is the proper effect of such laws, was expressly adjudged, by the supreme court of the United States, in the case of Wilkinson v. Leland, 2 Peters, 662. 2. Again, it is said, that the resolution under consideration is retroactive, and opposed to the fundamental principles of legislation, and conflicts with natural justice ; and furthermore, that it is directly unconstitutional, and, for these reasons, void. The history of legislation and jurisprudence in this country of constitutions, both state and national, has spoken too frequently and too explicitly upon the character of retroactive laws, from the time of the decision of the case of Calder v. Bull, 3 Dallas, 386., to be disregarded at this day. Retrospective laws, whether they be public or private, not relating to crimes and punishments, but merely civil in their operation, are not void because they &re retroactive. Void they may be, to be sure ; and so may be, and so frequently are, laws of a prospective character. We concede, that retroác-tive laws generally have many, features of injustice, although intended to effect much good J but as the judiciary is not the guardian of the legislature, but is the weaker department of the government, possessing no veto power over acts of constitutional legislation, more properly belonging to the executive ; we cannot disregard a legislative enactment, because it is retroactive in its purpose and effect, whatever may be our opinion of the general policy of such laws. It belongs to us rather to settle questions of constitutional power, than questions of policy. Walker v. Bacon, 8 Mass. R. 468. Lock v. Dane, 9 Mass. R. 360. Foster v. Essex Bank, 16 Mass. R. 245. Goshen v. Stonington, 4 Conn. R. 209. Waterbury v. Clark, 4 Day, 198. Mather v. Chapman, 6 Conn. R. 54. Beach v. Walker, Id. 190. Booth v. Booth, 7 Conn. R. 350. Dash v. VanKleeck, 7 Johns. R. 506. — 497 — It certainly has been more than intimated — it has been de- / , clared — by judges and courts of the highest respectability and authority in this country, that retroactive and other statute provisions, which unjustly take away or impair vested or impose new duties in respect to past transactions, without r r . . just compensation, are to be treated in this respect as inoperative, either by a very liberal construction of the laws themselves, or as being essentially opposed to the spirit of the constitution, and the fancied social compact, although not within the letter of any constitutional prohibition. On the contrary, the names of distinguished jurists are not wanting» who deny to the judiciary any right to treat such laws as void. Vide authorities above cited ; also, Satterlee v. Matthewson, 2 Peters, 280. Osborne v. Huger, 1 Bay, 179. Fletcher v. Peck, 6 Cranch, 135. King v. Dedham Bank, 15 Mass. R. 447. Wales v. Stetson, 2 Mass. R. 143. Society for the propagation of the Gospel v. Wheeler, 2 Gallis. 105. Cochran v. Van Surlay, 20 Wend. 365. Senator Verplank’s opinion. Butler v. Palmer, 1 Hill, 324. Charles River Bridge v. Warren Bridge, 11 Peters, 420. American Jurist for October, 1833, p. 297. [Allen v. McKeen, 10 Amer. Jurist, 273 to 297.] Judge Iredell’s opinion in Calder v. Bull, 3 Dal. 398. Varick v. Smith, 5 Paige, Ch. R. 137. It has been intimated from respectable sources, that the test of the validity of retroactive laws, is, whether they be unjust in their operation, and if they are, that they should thus far, at least, be disregarded. If such laws clearly abrogate vested rights, if they take the estate of one man and transfer it to another, <&c., without reasonable cause, and are, therefore, palpably unjust; we should probably so consider them, if possible, as to avoid these effects, or in accordance with the expressed opinion of our own courts, consider them in this respect inoperative ; not, perhaps, because we might believe them in the abstract to be unjust, but rather because they stand opposed to the true spirit of the constitution ; and, therefore, are unconstitutional and void. There may not often be any great difficulty in determining what are the principles of natural justice, nor what would tend to undermine that which theorists may suppose to be the fundamental principles of the social compact, especially by those who acknowledge the precepts and obligations of — 498 — revea^ re%’on 5 yet these principles are not always of easy and undoubted application to the infinitely varied forms of human action. And we know of no other municipal power, w^ch can more safely make such application, than the legislature ; and as a court, although we might dissent from its concjusfonSj yet we disclaim any right to disregard them, for no other reason than that we might consider them unreasonable, impolitic, or unjust. Goshen v. Stonington, 4 Conn. R. 209. 1 Bl. Com. 91. Christian's notes. In the present case, however, all these considerations are rather hypothetical than relevant to the essential bearing of the facts disclosed by this bill of exceptions ; for we do not perceive any thing, either in the votes and proceedings of the city of Bridgeport, or of its agents, or in the resolution of the General Assembly, so far as it is necessary to consider it, in this case, so unusual, so dangerous or unjust, as to require of us such an extreme exercise of judicial power, as for such causes, to declare them void. We know, that much of the commercial prosperity of our cities and other business communities, depends upon the extent and facilities of their intercourse with the interior country, as well as with distant and foreign places. To promote this intercourse, by constructing and improving roads, canals, bridges, harbours, wharves, &c., has been a very frequent object of the enterprise of the inhabitants of such communities ; and American cities, in their corporate capacities, have frequently given aid to such improvements, without exciting alarm, or of being suspected of thus oppressing their citizens, or of invading unjustly any salutary principle of the social system. In the present instance^ the city of Bridgeport, acquainted, as we presume, with its own wants and resources, and what would best promote its prosperity, upon full and frequent deliberation, both before and after the resolution of 1838, decided, that the construction of the llousatonuc Rail-Road and its termination within the limits of the city “ would result in great advantages to the city and it was, therefore, desirous of aiding in its construction. The General Assembly of the state coincided in this opinion of the citizens of Bridgeport; and there is nothing apparent upon this record or elsewhere, which has convinced us, that either the city or the legislature was mistaken in the matter. It should be borne in mind, that it was neither the — 499 — declared nor the actual purpose of the city to deal or speculate in the stock of the Rail-Road Company, but solely to aid in the construction of what was believed to be a great public improvement, which would result in direct advantage to the city, by directing the business of the interior from other channels, and securing it to Bridgeport. A subscription to the stock was a means, and the only practicable means, of furnishing the intended aid, and effecting the primary objects. To subscribe, for this purpose, to the stock of the Rail-Road Company, was not an unusual transaction, but rather, according to the language of the day, a fair business operation. If, therefore, the city became directly a stockholder in a corporation, and its citizens indirectly interested in a rail-road, this was only an incidental result of their efforts to give aid to the construction of the road for the interest of the city and its citizens. The state itself is a stockholder in several banks ; and so are many of our corporations, both civil, charitable, and ecclesiactieal. In all this we see nothing to alarm. But it was said in argument, and herein rested a strong ground of the defendants’ claim, that this resolve was unjust, and opposed to the fundamental principles of the social compact, and an infringement of the vested rights of the citizens of Bridgeport, because it authorized a majority of the citizens to compel a minority to contribute to objects which they disapproved and opposed, and to tax them against their will for objects foreign to the original purposes of the city charter. We have no official knowledge of the existence of a minority upon any subject now in controversy, appearing either as remonstrants before the legislature, or acting in any corporate meetings of the city. But if we had, we cannot regard their complaints, under the present form of proceeding. And here we take occasion once more to remark, that our present business is, to determine whether the bond in suit is obligatory upon the corporation, and not whether the individual estate of the citizens may be taken to satisfy a judgment against the corporation, either by the common law of the state, or by force of the resolution we are considering, The objection we are discussing, we think not only too broad, but too late. It would lie with equal reason against every act of the legislature creating a public municipal cor — 500 — poration in opposition to the will of any who could be made ,. . . -. . J , . . , _ to its action. It is a fundamental principle of all our , . . . , , . , 1 t * popular institutions, both sovereign and corporate, tnat ma-jor*ties must govern, and minorities must submit, in every case where the body does not transcend its constitutional cjjartere(j p0werS- The practical effects of this principle, it is confessed, is often not only injurious to the majorities themselves, but unjust to others ; but this consequence is only the lesser evil, and the price paid for the greater good. If minorities exist, the acts of majorities are of necessity opposed to what such minorities may believe to be their interests and their rights. The levying and collecting of taxes, is always a compulsory act of the majority, and generally very ungraciously submitted to, by the minority. , The present case is not unlike most others in this respect. Such of the citizens of Bridgeport, as were opposed to the projects of the city, and believed they were inconsistent with legitimate city powers, and subversive of the rights of the minority, have had frequent opportunities of being heard, as well by the legislature as the courts. Minorities are not so merged and absorbed in the corporate body, as to have no rights, and be entitled to no protection. But if there has been injustice, either in the proceedings of the legislature or the city, by holding such proceedings void, we should only transfer the bearing of the injustice, from the citizens of Bridgeport, who would gladly have availed themselves of the expected favourable result, to third persons, who have confided in the good faith of such citizens. Whether the resolution of the legislature was void, depends Upon its real character, and its necessary tendency and effect, and not upon the result of an experiment. Most of the reasoning of the defendants, in this part of the case, as we have seen, is grounded upon the assumption, that this resolution is altogether retrospective, and that it should be subjected to the common odium attached to retroactive laws. This is a mistaken construction. It is prospective also ; and sufficiently so to legalize these bonds. It is an enabling act, and authorizes the city “ to adopt such other measures as should be thought necessary to carry into effect the former proceedings of the city, and to provide for the payment of subscriptions, &c., by issuing scrip or other secu — 501 — rities, as said city should authorize, order or direct.” Under this power, the corporation again acted, and, m effect, as it de novo, enacted every thing which had before been done, and consummated every thing necessary to be done “ to secure the object contemplated by said subscription.” If such power had been conferred, by the original charter, and such had been the action of the city under it, as we have before remarked, no one would have doubted its legality. We have been referred to no express constitutional provision, with which the resolution under consideration is supposed to conflict, except it be art. 1. s. II. of the constitution of this state. “ The property of no person shall be taken for public use, without just compensation therefor.” This resolution, in conferring power upon the city of Bridgeport to make subscription to the stock of the Rail-Road Company, and to issue its bonds or other scrip, and borrow money, &e,, confers no power of taking private property for public use not found in the original charter. The power of taxation, which is the only one savouring of this interest, is to be found there, not here. The authority of city legislation is, to be sure, extended to new subjects; and therefore, taxes may be increased, as the objects of taxation are multiplied, and in this way, indirectly, private property is demanded for public use ; but this does not fall within this prohibition of the constitution: if it did, then all charters of incorporation conferring a power of taxation, would be unconstitutional. At any rate, so far as the taxing power is given, if this is embraced in the foregoing constitutional provision, it is not a forced construction of it, to say, that the compensation secured by the constitution is provided, by the overbalancing advantages and benefits, which both the citizens of Bridgeport and the legislature supposed would be conferred, by the construction of the rail-road. 3. It remains only to consider whether the authority given by the legislature, by the resolution of 1838, has been pursued, and whether the powers conferred upon the corporation, have been executed by the city and its agents ? And in doing this, we admit, that in this country, all corporations, whether public or private, derive their powers from legislative grant, and can do no act for which authority is not expressly given, or may not be reasonably inferred. But if we were to say, that — 502 — they can do nothing for which a warrant could not be found the language of their charters, we should deny to them, m some cases, the power of self-preservation, as well as many means necessary to effect the essential objects of their incorporation. And therefore, it has long been an established pr¡nc¡p¡e jn the law of corporations, that they may exercise all the powers within the fair intent and purpose of their creation, which are reasonably proper to give effect t,o powers expressly granted. In doing this, they must have a choice of means adapted to ends, and are not to be confined to any one mode of operation. The city of Bridgeport, by its votes, directed loans to be effected, as a means of paying its subscriptions. This the legislature authorized and approved. And now it is claimed, that, by virtue of this authority, the city was not empowered to issue its bonds to the Rail-Road Company, instead of money procured by such loans. If the same object was accomplished, by issuing the bonds, as would have been, by borrowing and paying the money, it would be very much like trifling with the law to hold that the legal consequences are essentially different. The Rail-Road Corporation thus became the creditor of the city, instead of some other persons, and received the bonds as cash, in payment of subscriptions. There can hardly be said, in this respect, to have been a departure from the literal terms of the city votes ; and if there had been, the present objection, coming from the city itself, after it had received the full, contemplated consideration for its bonds, and after having carried its entire purpose into effect, by this mode of operation, ought not to receive our countenance or favour. Bank of Northern Liberties v. Cresson, 12 Serg. & Rawle 306. Buckley v. The Derby Fishing Company, 2 Conn. R. 254. Witté v. The Same, Id. 260. 4. Very nearly of the same nature were other objections to the acts of the city agents; such as that the subscriptions were paid in advance, — and that the interest upon the bonds was made payable semi-annually. It was one of the regulations of the Rail-Road Company, that the subscriptions to its stock should be paid by instal-ments ; but this was intended as a privilege to stockholders, which they might waive, if they pleased. The city acted in furtherance of its supposed interests in issuing its bonds in — 503 — full of its subscription in advance. And this act, when con* r neeted with the object of the Rail-Road Company to pay the city semi-annual interest upon the amount of subscriptions, not payable by the general terms of the subscription, could result in no loss to the city, if such obligation should be fulfilled. It is true, the city agents were only authorized to negotiate loans at an interest not exceeding six per cent, per annum. They did not go beyond this power, by issuing bonds at that rate of interest, payable semi-annually. The rate per cent. was prescribed by the vote, but the period for its payment was left to the discretion of the agents. They exercised this discretion prudently, and only conformed to the usual course of business of this character. It is notorious, that all stocks, as well those of the United States, the individual states and the stocks of municipal and private corporations, are created and issued upon the same terms; and none others could find favour in the market. Upon a careful review of the proceedings of the city of Bridgeport, and the conduct of its agents, we cannot doubt but every thing has been done in reasonable, if not in literal, conformity with the powers conferred by the legislature ; and especially, that the bond in question, approved, as it has been, not in substance alone, but in form also, by the freemen of the city, in a deliberate meeting, carried out the entire purpose, as well of the corporation as of the legislature, and is of full and perfect obligation upon the city. Such are the most prominent reasons for the opinion we have expressed in this case, and such as have convinced us, that there is nothing erroneous in the judgment of the county court; and we shall, therefore, advise that it be affirmed. In this opinion the other Judges concurred. Judgment affirmed.