Adams v. Jackson Electric Railway, Light & Power Co.

Calhoon, J., delivered the opinion of the court. From this record and the briefs of counsel on both sides, marked as these briefs are by signal- ability, two questions appear : 1. May money, the property of a city, the fruit of a forfeiture by one company of its contract to construct a street railway, etc., be donated by the board of mayor and aldermen to another company, on and after its completion of such work under a contract between it and the city, having no reference to that fund ? 2. May such money be recovered from such company so receiving such donation by the state revenue agent, for the use of such city? [894] After the most careful consideration, we answer the first question in the negative and the second in the affirmative. When the forfeiture occurred the money became the property of the city, although it was in the hands of its custodian. It belonged to the city, arising out of contract with it, because of breach of agreement with it to build the railway, etc., under the general municipal powers conferred by code, §§ 2931-2933. The deposit of the money was in lieu of bond for performance, and, oii the breach, the money became the city’s for general purposes, and subject to the legislative power of the municipality, as would any other public fund, occupying the same position when put in the municipal treasury as money had from taxes, sale of licenses, or any other source of public revenue. Upon its grant of the franchise to build a street railway, etc., the city might require a cash consideration, and this cash would be received in its governmental capacity. To secure performance in the instant case, the city required a cash deposit; and this, on forfeiture, fell under the power and control and disposition of the city, in the exercise of its governmental functions, just as any other matter pertaining to the general welfare of the whole population. The fund came, in fact, out of the exercise by the city of its governmental power over its public streets. The money, in contemplation of law, was in the city treasury, although in fact in the hands of a depository therefor. The resolution directing its donation to appellee was under, if under anything, code 1892, § 3003, which requires that “ all expenditures of money for any purpose whatever, shall be in pursuance of a specific appropriation made by order, and in no other manner. ’ ’ In the case at bar this was an appropriation of the money of the city to a corporation, and so in direct and palpable violation of section 183 of our constitution. Under this section no [895] distinction is made between the money of a city in it» public or private capacity. The inhibition is clear, distinct. Cities are positively forbidden to make appropriation in aid of corporations. It follows that the appropriation here was void and no title to the money passed to the. appellee, and, because the money was the money of the city, a cause of action accrued to the state revenue agent to recover it. Adams v. Railroad, 76 Miss., 714. Reversed, demurrer overruled and remanded.