Ridings v. Hall

Currier, Judge, delivered the opinion of the court. September 18, 1851, the county of Johnson subscribed for $100,000 of the stock of the Pacific Railroad, to be paid for according to the subscription contract, in six per cent, county bonds at ten, fifteen and twenty years. No bonds of that particular description were issued ; but the County Court, in lieu of these, in December, 1865, issued to the railroad company seven per cent, county bonds, payable in equal installments in five, six, seven, eight and nine years. By a subsequent arrangement between the county and the railroad, $47,000 of the bonds were surrendered to the county [104] for cancellation, and a corresponding amount of tbe stock subscription was released to tin? railroad, leaving but $58,000 of the stock to be issued, and a like amount of the bonds to be paid. These bonds have since been taken up and satisfied with the proceeds of special taxes levied and collected by the county for that purpose; receipts for the money paid in settlement of the taxes being issued to the tax-payers for the amounts paid by them respectively. Notwithstanding the payment of the bonds, it appears that the stock has never been issued to the county, or to any one else, the .railroad company being in doubt as to the title of the respective claimants. The relator claims the stock in virtue of a purchase of it from the county, while the defendants, Hall and Jones, claim in virtue of tax receipts held by them. The real contest, therefore, is between the title of the county and the title of the tax-payers, the result depending upon the construction to be given to the different statutes which are supposed to have a bearing upon the question. By the act incorporating the Pacific Railroad (Sess. Acts 184&, p. 222, § 14), the respective counties in which the railroad should be located were authorized to subscribe for the stock of the company, and to invest the funds of the county therein. The counties were also authorized to issue county bonds to raise funds to pay for the stock, and to take all proper steps to protect the interest and credit of the respective counties interested in the subject. The County Courts were also authorized to appoint agents to represent their respective counties, to vote upon the county stock, and collect the dividends thereon. In a word, the stock was to be held, owned and treated as county property. That is clearly what this section contemplates. The Pacific Railroad was located in part in Johnson eouniy, and the stock subscription above mentioned was made by the County Court under the authority of the fourteenth section of the act incorporating the company. The substance of that section has already been given. It is not claimed that this act contemplates the vesting of the title to stock in the tax-payers. The [105] stock, as' already remarked, was to be county property ; and the stock subscribed by Johnson county belonged to and is owned by that county, unless the county has become divested of title by acts and transactions subsequent to the original subscription. It is nevertheless urged that the act incorporating the Pacific Railroad did not authorize Johnson county to levy a special tax for railroad objects, and that the stock taken by the county was paid through the medium of special taxation, as provided for in the act of February, 1858, authorizing the formation of railroad associations. (Sess. Acts 1853, p. 121.) It is thence argued that the title to the stock thus paid for should pass to and be vested in the tax-payers, according to the provisions of the thirty-first section of the act last referred to. There would be force in this view if the taxes which were collected and applied in payment of the bonds issued for the stock had been, raised under the authority of the thirtieth section of the act. But that does not appear to have’been the fact. This section (§ 30) has in view stock subscriptions to be made after the passage of the act, and not subscriptions made prior thereto. It does not authorize the levy of special taxes to pay stock previously subscribed. It has no reference to past transactions, as is apparent upon the face of the section, and as is proved very conclusively by the provisions of the thirty-third section, where the power to tax on account of. past subscriptions is expressly given. The section last referred to (§ 33) reads as follows: “Any County Court which has heretofore subscribed to the capital stock of any railroad in this State shall be entitled to the privileges and subject to the liabilities of other stockholders in such company, and the County Court shall have all the rights and powers to provide funds to pay such subscriptions as are granted to County Courts by this act, and may levy a special tax to pay the interest on-their bonds, or provide a sinking fund to pay the principal.” • So far as this particular act is concerned, it is in this section that the authority is found for levying a special tax to meet the liabilities incurred by past subscriptions. The whole section [106] relates to county liabilities incurred prior to tbe passage of tbe act, and embraces tbe subscription of Johnson county made in 1851. Tbe power to tax is express and ample, but no stock rights are granted to individual tax-payers. I think the stock subscribed prior to the passage of this act, under the authority of section 14 of the act of 1849, belonged to the county subscribing it and contracting to pay for it, notwithstanding the stock may have been paid by the proceeds of special taxes levied under section 88 of the act of 1853. In regard to sections 29, 30,- 31 and 32 of the act of 1853, this may be said: Section 29 provides for a popular election in regard to stock subscriptions made under authority of that act. But this has no bearing upon subscriptions made under the act of 1849. There the authority to subscribe was ample without the intervention of a popular election. Sections 30 and 31 provide for taxation for the purpose of raising money to pay for the stock authorized to be taken under section 29. It is in regard to such stock that section 31 grants to tax-payers certain property rights in the stock. The thirty-second section refers to the application and use of internal improvement funds and the contingent issue of bonds. These several sections are all prospective in their scope and operation, and do not affect past transactions. My conclusion, therefore, is that these sections do not embrace the subscription made by Johnson county prior to the passage of the act, and consequently that the title to the stock so subscribed was not diverted from the county to the tax-payers, either by force of the sections themselves, or by anything shown to have been done in pursuance of them. These conclusions involve an affirmance of the judgment, since it is not questioned that the plaintiff has acquired by purchase the title of the county. The other judges concur.