Rumsey v. Sauk Centre Town

Mitchell, J. This action was originally brought against the town of Sauk Centre alone, but subsequently, on motion of the town, neither the plaintiff nor the city objecting, the city of Sauk Centre was made a party defendant, and plaintiff amended his complaint accordingly. The defendant city demurred to the complaint, on the ground that it did not state a cause of action. From an order overruling this demurrer the city appealed. [320] Stated in chronological order, the allegations of the complaint are as follows: The town of Sauk Centre was a duly-organized township in the county of Stearns. The village of Sauk Centre, situated within the town, was organized as an incorporated village under Laws 1875, ch. 139, and Sp. Laws 1876, ch. 16, and so continued until the incorporation of the city of Sauk Centre, in 1889. In December, 1882, the town, in pursuance of the provisions of Sp. Laws 1879, ch. 143, issued to the Little Falls & Dakota Railroad Company its bonds to the amount of $12,000, which were afterwards sold and transferred to the plaintiff, and upon which he brings this action. In 1885 the legislature passed an act (Sp. Laws 1885, ch. 296) entitled “An act to provide for the payment of the bonded indebtedness of the town of Sauk Centre incurred by said town'by the issue of its bonds prior to the year 1883 and to apportion said indebtedness between the present town of Sauk Centre and the village of Sauk Centre.” The provisions of this act were that the bonded indebtedness of the town incurred by the issue of its bonds prior to 1883 should be apportioned and made chargeable to and payable by the town as then constituted, and by the village pro rata in the proportion that the valuation of taxable property of the town and village, respectively, shall bear to the entire valuation of the taxable property of the town and village collectively, said valuation to be determined by the general tax assessment list last preceding the time when the several installments of principal and interest upon such bonds become due and payable; and that the payment of such proportionate shares thereby apportioned should be provided for, and paid by, and be recoverable against, the town and village, respectively, as they become due, in the same manner as other debts of the town and village, respectively, were by law provided for, made payable and recoverable. In March, 1889, the city of Sauk Centre was incorporated by Sp. Laws 1889, ch. 4. The city included the whole of the village, and 880 acres which were outside the village, but within the town. This act provided that upon the election and qualification of the city officers in April, 1889, the village corporation should cease, and thereupon the city should succeed to, and become vested with [321] and the owner of, all the property and rights of action which belonged to the village, and should be: and become liable for all the debts, obligations, and liabilities then existing against the village for any cause or consideration whatever, in the same manner and to the same extent as if originally contracted or incurred by the city. 1. The allegations of the complaint are full to the effect that the bonds were duly issued by the town by virtue of and in accordance with the provisions of Sp. Laws-1879, ch. 143. Whether, in case these allegations are untrue, the recitals in the bonds are sufficient to estop the town or 'city from asserting the fact against a bona fide purchaser for value and before maturity, is a question not here involved, and hence need not be considered. 2. An examination of the acts under which the village was organized will show that, according to the repeated decisions of this court in similar cases, it remained a part of the town for all purposes, except the village purposes provided for in the acts. The property within the village was subject to taxation for the payment of these bonds in the same manner and to the same extent as any other property in the town. Bradish v. Lucken, 38 Minn. 186, (36 N. W. 454.) 3. Inasmuch as this condition of things still continued, it is not apparent what was the particular necessity for the enactment of the law of 1885. But the meaning and effect of that act are quite clear. It did not and could not affect or change the rights of the holders of the bonds against the town. But, as between themselves, it practically made the village and the remainder of the town two separate and distinct districts as respects liability for and the payment of all outstanding bonds of the village issued prior to 1883, and apportioned this indebtedness between the two in the ratio of the taxable property within their respective limits. Under this act, the village would be liable to the holders of the bonds to the extent of the amount apportioned to it; and, if the town (outside of the village limits) was compelled to pay more than its share, it could have recovered it back from the village. The power of the legislature to do this is undoubted. The village was a part of the town which issued the bonds. All the property within its limits was liable to taxation for their pay [322] ment. The part apportioned to the village did not impose any materially greater burden of taxation upon the property within its limits than it was already subject to. The right of the legislature, in all cases not within any constitutional inhibition, to create, alter, divide, or abolish all municipal corporations, and to make such division and apportionment of the corporate property and debts of old corporations, in case of a division of their territory, as the legislature may deem equitable, is well settled. State ex rel. v. City of Lake City, 25 Minn. 404; City of Winona v. School Dist. No. 82, 40 Minn. 13, (41 N. W. 539.) And it can make no difference whether the legislature divides the old corporation only for a particular purpose or for all purposes. The intention of the act of 1885 to make the village, as a municipal corporation, liable for the designated proportion of the town bonds, is very clear; and, as we construe its provisions, there is no ground for the contention that the holders of the bonds could not recover against the village, but that it would only be liable over to the town. The fact that the city includes 880 acres more than the village neither alters the law of the case, nor involves any practical difficulty. The liability of the village being established, the liability of the city, as its successor, unde; the act of 1889, is too clear to require argument. In case the plaintiff establishes his cause of action, he will be entitled to judgment against the town by virtue of its contract for the full amount of the bonds, — and against the city, by virtue of the acts of 1885 and 1889, to the extent of its proportionate share, as fixed by the act of 1S85. There is nothing in the point that the act of 1885 violated the Constitution, Art. 4, § 27. Neither is there anything in the objection that it is a legislative exercise of judicial power. It does not assume to pass upon the validity of any outstanding bonds of the town. If there are any such which were not a valid indebtedness of the town, that defense is still available to both the town and the city. Order affirmed. (-rTT.TrTTiT.AN, C. J., absent on account of sickness; took no part. (Opinion published 01 N. W. 330.)