Drake v. Phillips

Mr. Chief Justice Walker delivered the opinion of the Court: It appears from this record that at a town meeting in the town of Delevan, in April, 1865, it was resolved by the citizens of the town to levy a tax of three per cent, for town purposes. It also appears that the fifteen cents on the one hundred dollars of the valuation of the property in the town was all that was required for town purposes; that the remainder of the tax so levied, was designed for the purpose of refunding moneys already paid by individuals residing in the town, to raise volunteers for the army; that the tax was levied in pursuance to the resolution, and was extended, against the tax payers of the town on the collector’s books, which were placed in his hands, and that he was about to proceed to collect the same. This bill was thereupon filed to restrain its collection. A temporary injunction was granted to stay the collection of the tax levied for that purpose. On a hearing, the injunction was made perpetual as to all but fifteen cents on each one hundred dollars of valuation of the property in the town. The cause is brought to this court to reverse that decree. It is first objected, that while the tax enjoined from being collected was about eleven thousand dollars, the bond required by the judge who granted the order, was in a penalty of but one thousand. While the sum which shall be required as a penalty in such eases, was under the British practice a matter of discretion, long and it is believed uniform practice in our State requires that the penalty of the bond should be in a sum sufficiently large to cover all loss that might accrue. It is very unusual, when the value of the tax or other indebtedness is enjoined, to fix the penalty of the injunction bond at less than the sum enjoined, with all costs which are likely to accrue; or, when the judge granting the injunction can see what damage would be sustained by the wrongful suing out of the writ, he should fix the sum large enough to cover such loss. Such is believed to have been the practice, and we think that it should be strictly adhered to in awarding the writ. But when the writ has been properly granted, the error, if it be one, does not injure the party against whom the writ is allowed, and the decree will not be reversed for that reason. It is insisted that the court below had no jurisdiction to hear the cause and decree a perpetual injunction, staying the collection of a tax, levied by a body of persons acting as officers of the law and in their legal corporate capacity. These towns are corporate bodies, and as such are endowed with power, under specified circumstances and for some purposes, to impose taxes. When persons authorized to lay a tax exercise the power for a purpose authorized by law, courts of equity refuse to take jurisdiction, simply because some formality or legal requirement in making the levy is wanting, if it is laid for an authorized purpose and by the persons designated by law. In such a case, if wrong ensue, the party injured has a complete remedy at law. But when officers or individuals have no legal authority to lay a tax, and they assume the right; or when persons are vested with legal authority to lay a tax for a specified purpose, but instead of exercising that power they proceed to impose a tax which the law has not authorized, or lay it for fraudulent or unauthorized purposes,—then a court of equity will interpose to afford preventive relief, by restraining the exercise of powers perverted to fraudulent or oppressive purposes. We have decided at the present term of this court, in the case of Taylor v. Thompson, that the legislature can authorize a town to levy a tax for the purpose of paying bounties to volunteers, and thereby avoiding a draft. But this record presents a different case. Here there has been no act of the legislature authorizing this tax, and it was levied not to avoid a draft, but to refund to certain individuals money which had been voluntarily contributed by them for the purpose of avoiding the draft. It is alleged that the money was advanced by them with a general expectation that it would be refunded by the town, but it is not pretended that the town had sought in any way to bind itself to refund the money, even if it could have done so in the absence of express legislative authority. But can the town in the absence of any express authority from the general assembly, levy and collect a tax for the benefit of these individuals, by whose generosity the town has profited ? It is one of the most firmly established rules of law, that corporations can exercise no power but such as is delegated to them. These towns are quasi corporations, and exercise the powers conferred by the legislature. It is alone from that source that they derive power to lay and collect taxes, and in doing so, their action must conform to the legislative grant of the power both as to the amount and the purposes specified. If they either exceed the per cent, authorized, or impose a tax for unauthorized purposes, their acts will be void. The township organization law specifies certain purposes for which taxes may be levied, and then adds: “ Or for any other purpose they may deem necessary.” It is claimed that the tax in question can be levied under this general clause. But that clause must be construed as authorizing taxation only for purposes of the same general scope and character with those already enumerated, and to enable towns to carry into execution the powers granted to them by the legislature. It cannot be contended that under this general language, a town can levy a tax for the benefit of individuals, and it is very doubtful whether, under this clause, a town could lay a tax in order to avoid a draft; but until that question is presented we shall refrain from expressing an opinion. Certainly no such power was in the mind of the legislature which enacted this law, and the numerous special acts authorizing the towns named in them to levy taxes for this purpose, clearly show that a power of this kind has not been claimed under the general law. But even if it could be held, that this general clause conferred the power to lay a tax to secure exemption from the draft, in this case the tax was not levied for that purpose, but wholly for the benefit of individuals. And it appears by the record, that a part of the fund subscribed by the individuals who expected to receive the benefit of this tax, had been lost, wasted or misapplied. Yet the resolutions direct the toi to be levied and paid over to the subscribers to the recruiting fund, without reference to the extent to which the funds had been applied in relieving the town from the draft. We cannot think that this power is to be found in the general township organization law, and if the legislature should by special act, authorize a tax to be levied to refund the subscribers, it would undoubtedly direct the town authori ties first to ascertain to what extent the money had been paid in, and actually appropriated to the relief of the town from the draft. But inasmuch as the collector has done no act for which he should be compelled to pay costs, he should not be decreed to pay such as had accrued in this proceeding. He was simply the ministerial officer of the town to whom the warrant was directed, regular on its face, and which he was to collect or not at his peril. Until he enforced collection under his warrant he had done no act injurious to the tax payers of the town. The decree of the court below making the injunction perpetual is affirmed, as well as that portion of the decree which requires the costs to be taxed against the town; but it is modified so as to relieve the collector from the payment of costs. Decree modified.