Shurtleff v. Inhabitants of Wiscasset

Baeeow'S, J.

A portion of the elaborate argument of defendants’ counsel is devoted to an attempt to show that the authority given by the legislature to the inhabitants of Wiscasset to aid in the construction of á railroad running through that town, from which great public benefits -were expected to flow, was not regularly exercised, or that this or that condition precedent to the issue of the bonds was not fulfilled : e. g. — The objection raised to the validity of the bonds of the first issue on the ground that there was no legal organization of the Knox and Lincoln railroad company, and no company authorized to receive the bonds or give a mortgage for them under § 5, c. 370, private and special laws of 1864, because in the original charter granted in 1849, private and special laws, c. 287, of the Penobscot, Lincoln and Kennebec railroad company (whose name wTas changed to Knox and Lincoln in the act of 1864) the capital stock was fixed at a million dollars and the case does not show that more than $370,000 bad been subscribed; the objections that the certificate of the treasurer of the railroad company does not show that, at the time the bonds were delivered to the railroad company " at least §300,000 of the stock of the company had actually been subscribed, paid in and expended in the construction of the road,” but only that "$334, 528.25 had been collected from the subscribers to the stock” and "paid out in the construction of the road, bridges, timber, logs, &c. of said company;” that said treasurer’s certificate does not appear to have been sworn to until twelve,days after the date of the bonds and was not recorded' until nearly two months after; and that of the $370,000 subscription $275,000 was subscribed by the same cities and town to whom the mortgage was to be given, so that the subscription was rather an evasion than a compliance with the act, which required that "said bonds shall not be delivered to said railroad company until at least three hundred thousand dollars of the,stock of said.company has actually been subscribed, paid in and expended in the construction of said road, which fact shall be determined by the certificate of the treasurer of said corporation under oath, a copy of which certificate shall be recorded by the town or city clerk of each town or city issuing bonds by authority of this act.”

Now touching’ these and all objections of like character,— asicle from reasons which will readily suggest themselves to show that upon the obvious facts there is small merit in most of the objections individually, — it is sufficient to say that a broad distinction has long been recognized and adhered to by the courts, in suits of this description, between contracts which are void for want of any valid authority in the coloration to make them, and those where the authority exists and the question raised is whether it has been regularly exercised, or the conditions precedent to its exercise have been fulfilled. Touching all objections of the latter class it is well settled that purchasers of securities thus put out to the public for sale, " will not be required to look beyond the face of the proceedings or the recitals of the instruments under which they claimand the corporations issuing . them will be estopped to deny what their agents in the premises have affirmed in order to place their securities on the market. Aspinwall v. Com’rs of Knox Co. 21 Howard, 539; Zabriskie v. R. R. Co. 23 Howard, 400; Augusta Bank v. Augusta, 49 Maine, 507; Deming v. Houlton, 64 Maine, 254, and cases there cited; Lane v. Embden, 72 Maine, 354, and cases there cited.

These decisions stand on the firm ground of equitable estoppel which has been recognized in the common law courts for centuries, and has its foundation in the immutable principles of natural justice. The bonds were signed as required by § 8 of the act, countersigned by the president of the railroad company, and the defendants through their municipal officers certified upon the face of each bond that their action was "in behalf of said town and in conformity with an act of the legislature of the state of Maine, approved March 21,1864, vesting in us authority to issue this bond for the benefit of the Knox and Lincoln railroad company.” Such recitals are conclusive against the defendants upon all that class of objections to which we have referred.

Another part of defendants’ argument attacks the authority by which the second and third issues of bonds wore made because the action of the town was in anticipation of the grant of authority from the legislature, and by the terms of the votes in each case the municipal officer's of the town were directed to deliver the bonds to the officials of the railroad company "as soon as practicable after this vote shall be legalized by an act of the legislature of this state.”

Hereupon it is strenuously contended by the defendants that the legislature had no power to do what they undertook to do by virtue of c. 511, private and special laws of Maine, 1871, and c. 1, private and special laws of 1872, which distinctly purport to ratify, confirm and make valid the acts and doings of the town of Wiscassot on October 15, 1870, and June 28, 1871, respectively, as well as the acts1 and doings of other towns and cities, respecting aid to the construction of the Knox and Lincoln railroad on the days and times* mentioned in said acts, and to give authority to this and the other towns and cities named therein, to issue bonds in pursuance of the votes passed at their respective meetings specified in the acts. The passage of legislative acts designed to impart validity to the doings of various municipal and other quasi corporations when they have not been in conformity with law and therefore are in fact without legal authority and without effect, is no new thing.

If marriages not celebrated according to the requirements of law or by those having- authority to perform such a ceremony can be made valid, or sales of lands defectively made or acknowledged and -in the absence of legislative ratification ineffectual, can be made effective to pass the title to real estate, there would seem to be little doubt that the legislature might confer the authority to issue these bonds which the town proposed and voted to issue when the necessai-y legislative authority could be obtained.

It is not an open question in this state whether the legislature is violating the constitution in authorizing by special act certain cities and towns to grant aid in the construction and equipment of railroads. It was determined in Augusta Bank v. Augusta, 49 Maine, 507, that such enactments were constitutional.

No good reason is perceived for holding that the legislature are precluded from authorizing a particular measure of this description which has assumed the shape of a definite proposition, when they can grant authority to do the same act in general ' terms without any knowledge of the precise nature of the action which may follow such grant of authority. Obviously there can be no better opportunity for the legislature to judge whether a measure will be conducive to the public welfare than when its precise terms are laid before them. If the question is whether an authority shall be granted it certainly tends to an intelligent decision to have it known precisely what use is to be made of it when granted. The sanction of the legislature is given to the particular transaction.

It cannot properly be said that the action of the town was without law or against law. It was the adoption of a vote at a legal meeting of the citizens under an article, clearly setting forth the business to be considered, which vote, by its terms, was to be operative only when legislative authority for it had been given. The vote and the authority under which it was given took effect together. The principal practical argument against its propriety, is that the inhabitants of the' town with the knowledge that they are presumed to have had of the want of legal authority (at the time of the meeting,) fora vote involving so large a sum may have absented themselves with the idea that no such vote could ever have any binding effect.

The argument does not commend itself as having any genuine force. If any ten taxable inhabitants of the town had questioned the legal right'and power of the town to pledge its credit by these votes, there was a ready way to test it under c. 239, laws of 1864, § 1, but no such question seems to have been raised until evoked by the exigencies of this' defence. The idea that any considerable number of voters absented themselves from the meeting from a doubt of the legality of its proposed action seems to be effectually rebutted.

Even where as in this instance, the objection is, that the action of the town was essentially void for want of any power to act in the premises whatever, and so cannot be ratified by subsequent legislative action, nor as a general rule made binding by the aid of the doctrine of estoppel it has been held that an estoppel may grow out of a long continued acquiescence in or enjoyment of the fruits of the contract. See note to Doe v. Oliver, in Smith’s Leading Cases, 6th Am. Ed. vol. 2 p. 417, citing Garrett v. VanHorne, 7 Ohio, N. S. 327; Goshen Township v. Shoemaker, 12 Id. 624.

But we think there is no occasion to resort to the doctrine of estoppel touching this point. The legislative grant of authority was complete before the bonds were issued, and before, by the terms of the vote, they could bo issued, and this issue, authorized by the legislature, perfected the liability which the plaintiff seeks to enforce, being an act on the part of the defendants, without which the liability could not have existed nor the money which the plaintiff and others invested in these bonds have been procured. Moreover, if the vote had been made without being conditioned as it was upon the procurement of legislative authority by its very terms, there are authorities which cannot be distinguished in principle from this case which hold that the subsequent grant of powers from the legislature implied in a ratification of the doings of the town is equivalent to original authority. Winchester v. Corinna, 55 Maine, 9, where a vote expressly forbidden»by an existing statute was confirmed by a subsequent legislature and declared valid by the court. Obviously there is no greater danger that an ill considered or unwise act will be thus ratified, than there is that authority should be given to do it before its precise scope and character have been declared and canvassed. If any wisdom comes with an early afterthought, both town and legislature will have had opportunity to profit by it. Every argument which a minority of the town may have to urge against the act can be deliberately presented to the legislature in a shape more likely to be effective than where the question for the legislature is touching the grant of a general power, and the way is still open for the town to reconsider their vote if they desire to do so, before the money of innocent third parties has been procured upon the strength of it.

. No good reason is perceived why the maxim, omnis ratihabitio mandato priori cequiparatur, should not apply to an act of this description. The legislative act is after all only a grant of authority, nunc pro time, — a permission to the town to enter into the contract if they do not choose to reconsider their former action, and none the less valid because it was known to the legislature what the contract proposed was.

The objections against the second and third issues of bonds that Warren and Woolwich issued no bonds and so the condition in the vote of the town of Wiscasset was not complied with, and the objection against the third issue that the vote for it was not passed at an annual meeting of the town, both fall within that class as to which the defendants are estopped by the recitals in the bonds.

The issue here presented is whether the defendants made a binding promise to pay the plaintiff the amount of these coupons. The final proposition presented in defence is that if the plaintiff has judgment our statutes now provide nb process by which it can be legally enforced. It is hardly necessary to say that if the proposition were established it would constitute no reason why the issue here presented should not be adjudged in favor of the plaintiff. Lyon v. City of Elizabeth, New Jersey Supreme Court Abstract, Albany Law Journal, Sept. 10, 1881, vol. 24, p. 216, and cases there cited.

Certain decisions of the Supreme Court of the United States, especially, Rees v. Watertown, 19 Wallace, 122; and Merriwether v. Garrett, 102 U. S. 472, are relied on as establishing the doctrine that private property and especially that of non-residents, cannot be legally seized on execution, for the purpose of satisfying any judgment which the plaintiff may obtain here, in the manner prescribed by our existing statutes because such seizure would be in violation of the constitution of the United States, which declares that no man shall be deprived of his property without due process of law, and because the constitution of this state also forbids the taking of private property for public uses without just compensation, and permits it in cases of public exigency only. If the plaintiff does any-illegal acts in attempting to enforce his judgment, it will be the pertinent subject of inquiry in some future suit what the duties, rights, and liabilities of parties owning property in one of our towns, and those of the creditors of such corporation who hold a judgment against it, respectively are. Interesting as the discussion of this topic might prove, we think it cannot properly find a place here. If the plaintiff has shown himself entitled to judgment against the defendants in this action, it is not a valid reason for withholding it that he may not be able to get it legally satisfied.

The defendants have shown no good defence to the prima facie case of the plaintiff. No sound legal reason appears wrhy they should not pay the bonds they issued. The coupons stand or fall with the bonds.

Judgment for plaintiff for §57 and interest from date of writ.

AppletoN, C. J., WautoN, Danpoetii, Yiegest and SymoNds, JJ., concurred.