City of St. Louis v. Sheilds

"Wag-nee, Judge,

delivered the opinion of the court.

The question presented for determination is the constitutionality of the act, approved March 28, 1872, prohibiting the collection of wharfage from steamboats, so far as the same applies to the city of St. Louis.

It seems that in 1865 (Sess. Acts 1865, p. 440,) the Legislature passed an act for the improvement of the harbor of the city. By the provisions of that act, the city was authorized, for maintaining and improving the wharf, to apply all the net receipts from wharfage, and all the money at that time in the Treasury to the credit of the wharf funds; also, for the ¡.ame purpose to borrow $500,000 by an issue of bonds, running for the term of twenty years, for the payment of the principal and interest of which the revenues of the wharf were to be pledged ; and the City Council was further authorized, in its discretion, to levy a harbor tax of not exceeding one. tenth of one per cent, upon all property made taxable by law for State purposes within the limits of the city, the proceeds of which tax was to be held sacred for the purpose of paying the principal and interest of the wharf and harbor debt.

In pursuance of this authority, the City Council passed an ordinance directing the Mayor and Comptroller to sell the bonds, wherein they pledge the faith and credit of the city for the payment of the principal and interest, and the revenue derived from wharfage is likewise pledged for the same purpose-

By the act of 1872, all acts which in any manner authorized a municipal corporation to collect a wharfage or tonnage tax were repealed.

The court below held the act unconstitutional, as impairing the obligations of a contract, and gave judgment for the plaintiff, who sued the defendant for refusing to pay wharfage.

As this case now stands, it is difficult to perceive how any *354question as to the constitutionality of the law can be raised. In the passage of the law it cannot be pretended, that the State made a direct and irrevocable contract with the city. The city possesses no power which is not delegated by the severeign authority of the State. The State, in the enactment of the law, granted to the city a privilege, but it did not divest itself of the power of repealing or withholding that privilege at pleasure. The city can only raise money and apply it to a particular purpose by virtue of delegated authority, and the same authority that grants the power may alter the. law and divert it to a different object.

In the case of the State ex rel., The Police Commissioners, etc., vs. The St. Louis County Court (34 Mo., 546), it was held that the acts of the Legislature providing the objects for which county funds can be appropriated, are at all times subject to repeal or alteration, so as to appropriate the funds in a manner or to objects different from those before provided; and that, while the Legislature cannot take from the county its property, it has full power to direct the mode in which the property shall be used. If this proposition is conceded as to property already possessed by a corporation or minor subdivision of the State, it is certainly stronger when applied to a case where nothingis reduced to possession and only exists in the future.

Gilman vs. .The city of Sheboygan (2 Black, 510,) is a case very nearly parallel with the one at bar. There the Legislature of Wisconsin passed an act, authorizing the city of Sheboygan to borrow money upon the credit of the city, to be invested in the capital stock of a railroad company. The act further provided, that the city should annually levy a tax upon all taxable property of the city, sufficient, in addition to the dividends upon the shares of its stock in the company, to pay the interest upon the bonds.

Under the act. in question, the city made loans and issued its bonds therefor. Subsequently, an act was passed by the Legislature providing that thereafter all taxes levied by the Common Council of the city, for the payment of principal or *355interest of any bonds issued to aid in the construction of the railroad, should be levied on the real estate of the city exclusively. It was contended there as here, that the act exempting personal property from levy and taxation, was an impairment of the contract with those who owned the bonds, and was therefore void. The bondholders, however, were not parties to the suit nor did they complain. But the Supreme Court of the United States, through Mr. Justice Swayne, who delivered their unanimous opinion, discountenanced this assumption and held otherwise in the following emphatic language . “The act of 1854 authorized the borrowing of money, the issuing of bonds, and the levying of a tax upon all the property in the city for the purposes specified. The imposition, modification and removal of taxes and the exemption of property from such burdens, is an ordinary exercise of the power of State sovereignty. There is no pledge, express or implied, that this power should not thereafter be exercised.

“Admitting that the State could enter into such an engage-' ment, there is no evidence that it did. This fact should never be assumed unless the language used be too clear to admit of doubt.
“If the agreement existed, the complainant is not in a position to make the question. There is no allegation that the tax levied is insufficient. We hear of no complaint from the bondholders. They are not before us. It does not belong to the complainant, vicariously to enforce their contract and protect their rights.”

So in this ease, if we admit that the State could enter into an engagement which it could not lawfully repeal, still the case does not show that such was clearly the intention.

It is true the act authorizes the city to pledge and appropriate the revenues of the wharf for the payment of the principal and interest on the bonds, but this amounts to a legislative direction only, and is not conclusive that the Legislature intended to tie up its hands and take away the power of repeal.

In the next clause different language is used, and it is declared, that the tax levied upon all property made taxable by *356law for State purposes, within the city, shall be held sacred for the purpose of paying the debt and interest. This shows that the revenue, accruing under this general power of taxation, was to be used for the purposes specified, and no other. It does not appear from the record that the revenue, arising from the tax imposed on all the taxable property, is insufficient to meet the liabilities incurred. The bondholders are not before us. They make no complaint. They are not presenting any claim that their security is impaired, and the plaintiff cannot complain for them and attempt to enforce their contract or protect their rights, when they have not seen proper to do so. The repeal of the law may have worked injustice, but we cannot interfere on that account, but were the^ bondholders here asking for a protection of their rights, and showing that the collection of their debts were impaired, a different case would be presented.

The case of Von Hoffman vs. City of Quincy (4 Wall., 535) is not in opposition to these views. There the proceeding was instituted by the bondholders themselves, and it appeared that the repeal of the law not only lessened their security, but it amounted to a direct denial of all remedy. The city of Quincy issued the bonds under the provisions of several acts, by which it was authorized to collect a special annual tax upon the property, real and personal, therein, sufficient to pay the annual interest upon any bonds thereafter issued for railroad purposes. The city failed to pay the coupons held by Yon Hoffman for a long time after they became due, and he brought suit and obtained judgment upon them. An execution was issued, and returned unsatisfied. The city neglected and refused to levy the requisite tax to satisfy the execution, and he prayed for a mandamus to compel the city and its officers to pay over the amount of its judgment, and if the money was not in their hands, to levy a special tax as required by the acts of the Legislature before referred to. To the writ the city filed a return, pleading a subsequent aet of the Legislature restricting the city from levying taxes beyond a certain prescribed amount, and stating that the limit had been exhausted, *357and that no money remained in the Treasury which could be applied to the relator’s demand, and that it was prohibited from making any additional levy.

Under these circumstances the Court awarded a peremptory writ and held that a subsequently passed statute which repeals or restricts the power of taxation previously given, in so far as it affects bonds bought and held when the repealed law was in force, was a nullity, and that it was the duty of the corporation to impose and collect the tax in all respects as if the second statute had not been passed.

In that case, it will be observed, the second statute took away all the rights of the bondholders to have any satisfaction whatever. The contract was left in full force, but the remedy was entirely withdrawn. It was equivalent to giving them a mere shadow and withholding the substance. They had no othfer fund to look to, and when that was taken away their claim might as well have been annihilated.

But in the present case there is another fund sacredly pledged for the payment of the principal and interest of the bonds, which has not been touched or interfered with, and for aught we know, it is entirely adequate to satisfy the indebtedness. Should this, however, turn out otherwise, and the fund remaining prove insufficient, then the bond-holders, at their own instance and upon their own application, might have the same remedy that was pursued in Yon Hoffman’s case. But the question is not before us, and of course no decision is given. For these reasons I think the judgment should he reversed.

The other Judges concur.