3

not supreme, and does not include the power of compelling them to enter into contracts of a private character, although such contracts would conduce to the public good by enabling the government to suppress the traffic in intoxicating liquors. So a mandatory statute, compelling a town or other municipal corporation to become a stockholder in a railroad or other corporation, by exchanging its bonds for stock upon the terms prescribed by the statute, is unconstitutional. The case is distinguished from People v. Flagg: "The act in that case was the mere exercise of the unquestioned power of the legislature to determine what highways should be constructed, and of the taxing power in providing means to defray the expense incurred in their construction. But it is said in the opinion that, if the object of the expenditure be private, or if the money to be raised was directed. to be paid to a private corporation, which is authorized to use the improvement for private gain, the question would be quite different; and in this respect there is a limit beyond which legislative power cannot legitimately be exercised. It is manifest that the question presented in the present case was not determined in that, unless it shall be further held that a railroad, owned and controlled by a corporation and operated by it for the benefit of its stockholders, is a public highway in the same sense as the common roads of the country;" in another part of the opinion it is said: "But the exercise of the taxing power, either general or local, for this purpose, is altogether different from compelling a town to take stock in the corporation without its consent, and to that extent engage in the business of common carrier. I think it would not be claimed that a town could be compelled to become a stockholder in a banking or manufacturing corporation, although it appeared that the particular corporation would largely promote the public interest where the business was conducted. Such legislation could only be sustained by holding the power of the legislature supreme over municipal corporations for private as well as public purposes. Upon principle and authority, I think it is not as to the former, although it is as to the latter. The test is whether the purpose to be effected is public or private. If the former, a mandatory statute is valid. If the latter, it is not within the province of the legislature, and the act is therefore void."5 So donations are held not compulsory by some of the courts, and in

1 Atkins v. Town of Randolph, 31 Vt. 226.

People v. Batchellor, 53 N. Y. 128.

3 46 N. Y. 401; see Grover, J., 53 N. Y. 139.

and

4 Grover, J., 53 N. Y. 143.

Sweet v. Hulbert, 51 Barb. 312; State v. Tappan, 29 Wis. 672; Whiting v. The

Sheboygan & Fond du Lac R. R. 25 Wis. 107, 196, 197.

6 People v. State, 23 Mich. 499, 502.

Michigan that the legislature can neither compel nor empower municipalities to make subscriptions or donations to railroads, to be raised by taxation. Nor can a State compel State scrip to be received in payment of county, school and district taxes; it is not money; creditors of the subdivisions cannot be compelled to receive it in payment of their debts.1 School districts are created and continued for school purposes, such as to establish schools, manage the school fund, and pay the teachers of schools within their jurisdiction. This is the purpose of their organization. They cannot be invested with power to aid in the construction of railroads through them by taxation. The Constitution allows them to be invested with the power to tax for corporate purposes, but this is not a corporate purpose for a school district.* While this decision is based on the Constitution of Illinois, the principle applies to all school districts. To aid in the building of railroads is not within the purview of the purposes for which they were created.

$38. Principle of People v. Batchellor.-The principle in this case is, that the legislature may regulate the mode of making contracts for individuals or corporations, but that it is not within their province to make contracts for them; in other words, it prescribes a rule of action, it enacts laws-it does not make contracts for persons, natural or artificial. "No one would claim that an individual could be compelled by a statute, to exchange his note, or bond and mortgage, with a railroad corporation for its stock, against his will, upon such terms as were prescribed in the act, or any other. It is within the province of legislation, to provide for enforcing the performance of contracts when made; but to enforce the making of them by individuals is entirely beyond it. We have seen that municipal corporations may be compelled to enter into contracts for an exclusive public purpose, but I think they cannot be when the purpose is private." And as we have seen in the previous section, the judge comes to the conclusion that a railroad operated by its stockholders for their own benefit, although the right of eminent domain may be exercised in its favor, is for a private purpose, and the municipality cannot be compelled to subscribe to its stock. Yet the same judge holds that an act enabling the municipality to subscribe to such stock is valid. What makes the difference? Is it the assent of the municipality? That cannot make it a public purpose in one case, and the want of it a private one in another. While the assent of the municipality cannot change the purpose, it does affect the question;

1 Wells v. Cole, 27 Ark. 603.

2 People v. Trustees of Schools, 78 Ill. 136.

3 Grover, J., in People v. Batchellor, 53 N. Y. 140.

4 Ibid. 53 N. Y. 138; approving Bank of Rome v. Village of Rome, 18 N. Y. 38.

it is a principle well recognized, that all who aid procuring an act of the legislature, or who ratify it after its passage, are bound by it.1 But this principle would only bind the municipality as to its corporate property; it would not bind it so as to make liable all the property of its inhabitants in the form of a tax. If the legislature cannot compel an individual to make a contract, the municipality, one of the subdivisions of the State, whose powers are all derived from the legislature, cannot compel such a contract to be made. The principle which is the foundation of this case, requires the assent of those who are to bear the burden; if a number of citizens procure an enabling act to allow a city to subscribe to the stock of a railroad, it binds those who procure it and those who ratify, but those who do not assent to it are not bound. The doctrine to be deduced from this case, is not that a railroad owned by its private stockholders is for a private purpose, and therefore a municipality cannot be compelled to subscribe to its stock. For it is impossible to show that an improved turnpike is for a public purpose, and that a railroad, another species of improved highway, is for a private purpose, and we think it has been fully demonstrated in section 16, that the purpose of a railroad is public, notwithstanding it may be owned in whole or in part by private parties. In order to justify the imposition of a local tax, the object or purpose must not only be public or governmental, but there must be some benefit to the locality beyond that accruing to the people of the whole State. The erection of a State house is a public purpose, but it is not proper to place the cost of its erection upon a particular county, even the county in which it is situated, because it is not a local benefit which can be distinctly traced. So of a railroad passing through the State; it may be for a public purpose, one which the State might aid by taxes imposed upon the whole people of the State, but to impose the whole or a portion of the burden upon a particular locality, the benefit ought to be one that can be distinctly traced, a benefit beyond that conferred upon other parts of the State. That such a benefit cannot be distinctly traced, seems to be conceded in the cases holding railroad subscriptions valid. An examination of these cases will show that the assent of the municipality has been given in some form. Why require the assent if the legislature has the power? It is simply a recognition of the principle that these localities ought not to bear the burden of constructing these public improvements except by their consent. But this principle is not recognized as to other public improvements, as to schools, roads in the

1 Ferguson v. Landram, 1 Bush, 548, and 5 Bush, 230. Authorities, § 27.

Authorities cited, § 15, 36.

limits of the locality taxed, and others of a like nature. Why not? Because the benefit can be traced, the purpose is public, it is a proper subject of local taxation, the power of the legislature is unquestioned, and no assent is required.1 The vicious principle in the cases holding subscriptions or donations valid because of the assent of the municipality through its proper officers, or by a majority of votes, lies in the fact that the assent of one person is used to enforce a claim against another person. If a majority vote for a subscription, or ratify an enabling act, it undoubtedly binds the majority, but how about the minority? They have never consented, and if bound, it must be because of the power of the legislature; but it is admitted, not only by this case, but is universally admitted, that the legislature cannot compel A. to make a contract with B.; the conclusion is inevitable that the minority is not bound by subscriptions to railroads. And the same principle would apply to the bounty acts; for while it is undoubtedly true that it may be a public purpose for a State to encourage its citizens in the defense of their country by suitable rewards for services rendered, or to be rendered, and that this principle may very properly apply to the States of the American Union in case of war carried on by the general government, either against foreign enemies or for the suppression of domestic insurrection, yet it is difficult to conceive how the localities taxed can be shown to receive a benefit beyond the whole people of the State, and this seems to be admitted in all the acts which proceed upon the supposition that consent has been given.2

§ 39. Principles governing Local Taxation. Classification of the Cases.-Primarily, the legislature is the tribunal whose discretion as to the distribution of the burden is conclusive. But where there is a clear violation of some provision of the Constitution for the protection of the right of private property, the "home born" right as it has been called, the courts interfere for its protection; the circumstance that the violation is attempted by the legislature in the form of a tax gives it no additional validity. When the benefit can be distinctly traced as to the locality, as one not enjoyed by the whole people of the State, the tax is valid, and the assent of the municipality or of its citizens is not required to give validity to the act; this results from the nature of a tax, which proceeds not by contract, but in invitum. In the latter class we place the case of an act allowing an additional amount for the construction of a sewer in a town; an act directing the payment of the costs of a suit prosecuted at the

1 Authorities cited, § 35.

2 State v. Tappan, 29 Wis. 672.

3 Yelverton.

instance of and for the benefit of a town, in reference to matters of interest to the town; costs of erecting a building for a normal school, with a grammar school attached, in a town; costs of a turnpike in the limits of a town; costs of erecting a bridge over a river passing through a town or a city; for payment of the debt of a city beyond the amount allowed by its charter; for payment of interest on the debt of a county ascertained as proper to be borne upon the division of the old county; costs of the erection of buildings for agricultural colleges in a town. In all these cases the benefit to the locality taxed can be traced, and it is a direct benefit, not an incidental one such as results to the community from the establishment of a private enterprise in a town, such as a saw-mill, hotel or foundry; the cases of agricultural colleges carry the principle to its utmost verge. In the former class we place the cases, where a portion of a fund appropriated by the Constitution of a State to internal improvements was directed to be ap plied to improve the navigation of a river, and was misappropriated, and it was held the amount misappropriated could not be raised by tolls on the navigation of the river; improving the navigation of a river on the border of a county is not local benefit; establishing a saw-mill, hotel, iron foundry, etc.; and the extension of city limits so as to include lands used only for agricultural purposes, and subjecting them to a city tax. In these cases the benefit to the locality could not be traced; it could not be pointed out how the locality was benefited beyond other portions of the State, and the acts were regarded as violations of those fundamental provisions of all the constitutions of the States of the American Union, which declare that no person shall be deprived of property without due process of law, and that private property shall not be taken for public use without just compensation.

The principle of the case of People v. Batchellor, is in accord with the distinctions drawn in the classes of cases just noticed; it effectually protects private property, the "home born" right of private property, even from the assaults of an oppressive majority. It is very true that the principle announced in this case and the class of cases referred to, which hold the tax acts invalid, are antagonistic to the current of authority in the cases of railroad, canal, and bounty enabling acts. But these are sustained upon authority alone, they do not rest upon principle, as to local taxation, and are to be regarded as authority only upon the maxim of stare decisis."

1 Authorities cited, § 28.

2 Ibid. § 35.

3 Ibid. § 30.

5 Ibid. §§ 23, 24.

Ibid. § 34.

Ibid. § 32. 'See very able note of Judge Redfield, in Allen v. Jay, 13 Am. Law Reg. 497, as to the tendency of modern decisions in affording protection to private right against arbitrary taxation.