Goodwin v. Town of East Hartford

Andrews, C. J. The plaintiff is a citizen and tax-payer of the town of East Hartford. The judgment of the Superior Court enjoined that town, perpetually, from paying four certain orders of like tenor with the one recited in the sixteenth paragraph of the defendants’ answer. If the law is so that the town is, in no event, lawfully under obligation to pay those orders, then the demurrer was properly sustained and the judgment is correct. It will simplify the discussion if we keep distinctly in mind from the outset, that the town is not liable as the maker or drawer of the orders. An inspection of the order so recited shows that no agent of the town, as such, took part in the making of it. The obligation of the town to pay those orders, if it exists at all, must arise from one of the three, or possibly four, following conditions: First, because the said highway board had authority by law to issue orders for the purpose for which it appears by the record these orders were issued, and so to make them binding on the town; or, second, assuming that the orders were invalid when issued, because the town has ratified them; or third, because the orders were negotiable, and so their validity cannot be questioned in the hands of the present holders. The possible fourth condition is the acceptance of the bonds by the town treasurer. But this may be wholly disregarded. A town treasurer has no authority to bind a town by his acceptance of an illegal order. Let us, then, first inquire as to the authority of the said board. At its January session in the year 1887, the legisla — 36 — ture passed an Act entitled, “ An Act to establish Free Public Highways across the Connecticut River in Hartford County,”—by subsequent legislation made to apply only to the Hartford Bridge,—by which it was provided that the State’s Attorney in Hartford county should bring a complaint to the Superior Court in that county ag’ainst the proprietors of the said Hartford bridge, then being a toll bridge; that said court, upon such complaint, should appoint commissioners who should lay out and establish a highway across the Connecticut river where the said toll bridge was, and along and across the causeway and approaches appurtenant to and connected therewith, and should appraise the damages and benefits; that “ said highway when laid out and established as herein provided, shall be a free public highway; ” that said commissioners should determine what towns were specially benefited by the layout and establishment of said highway, and should assess to them such benefits as they should find equitable. The said Act, in its seventh section, then provided that “ when said highway, so established as aforesaid, shall have become a free public highway as aforesaid, the same shall thereafter be maintained by the said towns so assessed in proportion to the assessment upon said towns as hereinafter provided. The first selectmen of the said several towns shall meet on the second Monday after said highway shall have become a free highway as aforesaid, at the office of the selectmen in Hartford, and annually thereafter and at such other times as they shall deem necessary, and said several first selectmen shall constitute a board for the care, maintenance, and control of said highway. Said board shall appoint a- chairman, secretary, and treasurer, and said board shall apportion the expense of repairing and maintaining said highway upon the said several towns in proportion to the assessment against said towns as aforesaid, and said chairman shall draw his order on the respective treasurers of said towns to the order of the treasurer of said board for the proportional amount payable by said towns as aforesaid for such repairs and maintenance. Any damages resulting from the defective condition of said highway or the bridges upon the — 37 — same shall be paid by said towns in proportion to the said assessment. For the purpose embraced in this section the said board shall be a body politic and corporate by the name of The Board for the Care of Highways and Bridges across the Connecticut River in Hartford County, and actions may be brought against said board by service upon its secretary, and any judgment recovered therein shall be paid by said towns in said proportions and in the same maimer as herein provided for the payment of the expenses of repairs and maintenance as aforesaid. Said board shall annually report to said several towns the expenses incurred and paid by them during the preceding year.” Pursuant to the provisions of that Act the State’s Attorney for Hartford county brought a complaint to the Superior Court in that county at its October term, 1887, and thereupon commissioners were appointed and such proceedings were had, that said Superior Court by its decree laid out and established a free public highway across the Connecticut River at the place where the toll bridge of the Hartford Bridge Company then was, and along and across the causeways and approaches appurtenant to and connected therewith, and found that the towns of Hartford, East Hartford, Glastonbury, South Windsor and Manchester were especially benefited by said layout, and assessed the benefits to each, the proportion of said expense imposed on the town of East Hartford being eleven thirty-fifths of the entire expense; so that the said town of East Hartford became and was liable to pay in the manner set forth in the said Act, eleven thirty-fifths of the expense of repairing and maintaining said free public highway, and eleven thirty-fifths of any damage resulting from the defective condition of said free public highway or the bridges thereon; and so far as the terms of said Act express, for no other expense whatever. Afterwards, in September, 1889, the first selectmen of the said towns met, as is provided in said Act, and organized the corporation therein created, by the name of “The Board for the Care of Highways and Bridges across the Connecticut River in Hartford County,” by electing George W. Fowler, — 38 — then the first selectman of Hartford, its chairman, and John S. Risley, then the first selectman of Manchester, as its treasurer ; and said corporation, so organized, immediately assumed the care and control of said free public highway, repairing and maintaining the same until the 29th day of June, 1893. On said last mentioned day, as it is alleged in the tenth paragraph of the complaint, the General Assembly, being then in session, passed an Act which was made to take effect on its passage, by which the said Act of 1887 was repealed, and the State itself assumed and undertook the duty of repairing and maintaining thereafter the said free public highway. The purposes for which the said orders were issued, is set forth in the nineteenth paragraph of the defendants’ answer, as follows:— “ The said orders were made, accepted, endorsed, and negotiated in payment for services of persons' employed and expenses incurred by said first selectman and town agent of the defendant town, and by said ‘ Board for the Care of Highways and Bridges across the Connecticut River in Hartford County,’ to relieve and absolve the defendant town from obligation and liability respecting the said highway and bridge, and the care, repair, and maintenance thereof; and said services and expenses were, in part, rendered and expended in respect to, and in the preparation of, the Act of the General Assembly refereed to in the tenth paragraph of the amended complaint, and in respect to the proceedings before the committee of the General Assembly in respect to said legislation.” We have already seen that the said orders on their face indicate that the first selectman and town agent of the defendant town did not, as such, take any part in the making or drawing of the orders. The first selectman and town agent of the defendant town was a member of said board. He took no part in the making or issuing the orders as such member. If said board might lawfully issue the said orders in the payment of such employment and expenses, and so make them a charge on the town, then the orders should be paid, but otherwise not. And this brings us directly to the question of whether or not the said “ Board for the Care of — 39 — Highways and Bridges across the Connecticut River in Hartford County” could lawfully issue these orders for such purposes and mate them, obligatory on the town of East Hartford. It has been noticed that the terms of the Act which created the board made it the duty of said board to care for, maintain and control the said highways, and gave it authority to apportion the expense of repairing and maintaining the same, as well as any damages resulting from the defective condition of the said highway and bridge, upon the several towns named in the decree of the Superior Court. The terms of the Act give that board no power to impose on the towns the expense of anything else. The terms of the Act gave that board no authority to employ agents to appear before the legislature, for any purpose whatever; least of all to employ agents to procure legislation which would terminate its own existence. And it seems to us that said board did not have such power by implication. If we regard the board simply as a device to enable the representatives of the five towns to perform a municipal duty imposed on the town jointly with the other towns, it is clear that the powers of such a board should not be extended by implication beyond the performance of the joint municipal duty which made some such device necessary. If, on the other hand, we regard the board as a municipal corporation, it is one with very limited powers, created for a specified duty only, and must be judged by the rule applicable to such a corporation. Public or municipal corporations are not associations, but are sub-divisions of the State. The charter of such a corporation is not a contract between the corporation and the State, nor between the corporators themselves. The effect of an Act of the legislature incorporating a municipality is to invest the governing authorities of the municipality— either a majority of the voters, or such officers as are prescribed—with the power of local government over the inhabitants of that district. Such an Act, strictly speaking, confers powers which did not exist before; it confers on the governing authority the power of laying taxes, and passing local laws for the purposes named in the Act, without the — 40 — previous consent of the people of the district. The governing authorities possess no powers or faculties not conferred upon them either expressly or by fair implication by the law which creates them, or by other statutes applicable to them. Dillon on Mun. Corp. § 21; Morawetz on Corp. §§24, 649, 1046; Coler v. Cleburne, 131 U. S. 162. A municipal corporation has no power by implication, unless it is one that may be necessary to the successful carrying out of those powers which are expressly given. It is more reasonable to suppose that the legislature, in creating a corporation, intended that it should succeed rather than that it should fail. Hence the courts hold that such necessary powers were really intended to be granted. If the powers expressly given can be exercised without aid from implication, then nothing can be implied. And there can be no implication of a power existing in a corporation inconsistent with those which are expressly granted. Obviously a power destructive of those expressly granted, cannot be implied. Perpetual continuance is ordinarily an essential ingredient in the idea of a corporation. A corporation cannot put an end to its own existence; it certainly cannot unless the power to do so is expressly given to it. The said board had no power to make the orders in question obligatory on the defendant town, unless it had the implied power to employ agents to appear before the legislature to procure legislation to terminate its own existence. Such an implication cannot be admitted. A large part of the defendants’ argument is devoted to the claim that the town of East Hartford might —■ as could any other town in the State—lawfully employ counsel or agents to appear before the legislature to procure any legislation in which the town conceives itself to be interested. They cite Farrel v. Derby, 58 Conn. 234. That case, however, goes no further than to hold that a town may lawfully expend money it has raised by taxation, to protect its corporate integrity, privileges, or property, from adverse legislation. The doctrine of that case is one that is not to be carried further. It cannot be stretched into an authority justifying a town to — 41 — embark in legislative attacks on other corporations, because the town might think itself benefited thereby. In one aspect of this case it is entirely immaterial whether the town has or has not power to employ agents to appear before the legislature. If the town of East Hartford has power to employ agents or attorneys for that purpose, it has not done so in this case. In another aspect of the case the question of the power of the town to employ agents for such purpose, is material, and that is on the claim of a ratification. The defendants say that the town of East Hartford has ratified these orders. The averments in the pleadings from which ratification is claimed, are these: In the eighteenth paragraph of the complaint it is alleged that “ the said defendants, the said town of East Hartford and the said Merriman as treasurer of said town of East Hartford, intend to pay the said four illegal orders amounting to the sum of $5,000 now outstanding and unpaid as hereinbefore set forth.” And in the eighteenth paragraph of the answer it is alleged as follows : “ In the annual report of the selectmen and treasurer and other officers of said town of East Hartford to the town of East Hartford, in the year ending September 11th, 1889, and in other such reports, there was contained, as a liability, a statement that said orders were still outstanding as an immediate liability to the amount of $5,000, bearing interest at the rate of 5 per cent., and said report, with said statement of said orders as liabilities, was accepted by said town of East Hartford.” The claim as stated is like this: The town itself might have employed the agents and attorneys to appear before the legislature to procure the legislation by which it was released from contributing towards the expense of the free highway; the said board did employ attorneys who went before the legislature and procured such legislation and which benefited the town; in payment for the services so rendered the board issued the orders in question, and now the town, by the action so above alleged, has ratified those orders; and as there can be no ratification of a contract unless there was power to enter into that contract originally, the question of — 42 — the power of a town to employ agents to appear before the legislature might be material. It would be material, if the disposition of this case depended on it. We have no occasion, however, to pass upon that question, for the reason that the allegations of the pleadings do not show a ratification. There is no ratification unless the party has full knowledge of all the facts, nor unless there is the intent to ratify. Dibble v. New Haven, 56 Conn. 199, 202; Stanton v. New York & H. R. Co., 59 id. 272, 281; Ansonia v. Cooper, 64 id. 536, 544. The allegations here fail to show that the town had full knowledge, and fail to show that there was an intent to ratify. We think there was no ratification. The orders were not negotiable so as to estop the plaintiff or the town of East Hartford from showing their illegality in the hands of the present holders. Municipal orders or bonds are not ordinarily negotiable. The orders in this case are similar to, and in effect precisely like, the orders discussed by the Supreme Court of the United States in the case of Mayor v. Ray, 19 Wall. 468, 477,-a case in which the city of Nashville, Tenn., had issued orders for the payment of money borrowed by the city. There was no express authority in its charter for the city to borrow money for any purpose. Mr. Justice Bradley, in giving the opinion of the court, said: “Vouchers for money due, certificates of indebtedness for services rendered or for property furnished for the use of the city, orders or drafts drawn by one city officer upon another, or any other device of the kind, used for liquidating the amounts legitimately due to public creditors, are of course necessary instruments for carrying on the machinery of municipal administration, and for anticipating the collection of taxes. But to invest such documents with the character and incidents of commercial paper, so as to render them in the hands of bona fide holders absolute obligations to pay, however irregularly or fraudulently issued, is an abuse of their true character and purpose. It has the effect of’ converting a municipal organization into a trading company, and puts it into the power of corrupt officials to involve a political community in irretrievable bankruptcy. — 43 — No such power ought to exist, and in our opinion no such power does legally exist, unless conferred by legislative enactment, either express or clearly implied. . . . But where the power has not been given, parties must take municipal orders, drafts, certificates, and other documents of the sort, at their peril. Custom and usage may have so far assimilated them to regular commercial paper as to made them negotiable, that is, transferable by delivery or indorsement. This quality renders them more convenient for the purposes of the holder, and has, undoubtedly, led to the idea so frequently, but, as we think, erroneously, entertained, that they are invested with that other characteristic of commercial paper—freedom from all legal and equitable defenses in the hands of a bona ■tide holder. But every holder of a city order or certificate knows, that to be valid and genuine at all, it must have been issued as a voucher for city indebtedness. It , could not be lawfully issued for any other purpose. He must take it, therefore, subject to the risk that it was lawfully and properly issued. His claim to be a bona fide holder will always be subject to this qualification. The face of the paper itself is notice to him that its validity depends upon the regularity of its issue. The officers of the city have no authority to issue it for any illegal or improper purpose, and their acts cannot create an estoppel against the city itself, its taxpayers, or people. Persons receiving it from them know whether it is issued, and whether they receive it, for a proper ptupose and a proper consideration. Of course they are affected by the absence of these essential ingredients; and all subsequent holders take cum onere, and are affected by the same defect.” It was holden that the order was invalid and that there could be no recovery against the city. These considerations exactly apply to the present case, and show that the orders enjoined against were not negotiable. 1 Daniel on Neg. Inst. p. 324, §427; Cooley on Const. Lim. (6th ed.), 269; Dillon on Mun. Corp. §§122, 406, 457, 733; Beach on Public Corp. § 195. There is no error. In this opinion the other judges concurred.