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Vol. II.]

CITIZENS' SAVINGS, ETC., ASSOCIATION v. CITY OF TOPEKA.

[No. 4.

citizens subject at all times to the absolute disposition and unlimited control of even the most democratic depository of power is, after all, but a despotism. It is true it is a despotism of the many, of the majority, if you choose to call it so, but it is none the less a despotism. It may well be doubted if a man is to hold all he is accustomed to call his own, all in which he has placed his happiness, and the security of which is essential to that happiness, under the unlimited dominion of others, whether it is not wiser that this power should be exercised by one man than by many. The theory of our governments, state and national, is opposed to the deposit of unlimited power anywhere. The executive, the legislative, and the judicial branches of these governments are all of limited and defined

powers.

There are limitations on such power which grow out of the essential nature of all free governments. Implied reservations of individual rights, without which the social compact could not exist, and which are respected by all governments entitled to the name. No court, for instance, would hesitate to declare void a statute which enacted that A and B, who were husband and wife to each other, should be so no longer, but that A should thereafter be the husband of C, and B the wife of D. Or which should enact that the homestead now owned by A should no longer be his, but should henceforth be the property of B. Whiting v. Fond du Lac, supra; Cooley on Constitutional Limitations, 129, 175, 487; Dillon on Municipal Corp. § 587.

Of all the powers conferred upon government, that of taxation is most liable to abuse. Given a purpose or object for which taxation may be lawfully used, and the extent of its exercise is in its very nature unlimited. It is true that express limitation on the amount of tax to be levied or the things to be taxed may be imposed by Constitution or statute; but in most instances for which taxes are levied, as the support of government, the prosecution of war, the national defence, any limitation is unsafe. The entire resources of the people should in some instances, be at the disposal of the government.

The power to tax is, therefore, the strongest, the most pervading, of all the powers of government, reaching directly or indirectly to all classes of the people. It was said by Chief Justice Marshall, in the case of McCullouch v. The State of Maryland, 4 Wheaton, 316, that the power to tax is the power to destroy. A striking instance of the truth of the proposition is seen in the fact that the existing tax of ten per cent. imposed by the United States on the circulation of all other banks than the national banks, drove out of existence every state bank of circulation within a year or two after its passage. This power can as readily be employed against individuals and in favor of others, so as to ruin the one class and give unlimited wealth and prosperity to the other, if there is no implied limitation of the uses for which the power may be exercised.

To lay with one hand the power of the government on the property of the citizen, and with the other to bestow it upon favored individuals to aid private enterprises and build up private fortunes, is none the less a robbery because it is done under the forms of law, and is called taxation. This is not legislation. It is a decree under legislative forms.

Nor is it taxation. A "Tax," says Webster's Dictionary, "is a rate

Vol. II.]

CITIZENS' SAVINGS, ETC., ASSOCIATION v. CITY OF TOPEKA.

[No. 4.

or sum of money assessed on the person or property of a citizen by government for the use of the nation or state." "Taxes are burdens or charges imposed by the legislature upon persons or property to raise money for public purposes.' 3." Cooley Const. Lim. 479.

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Coulter, Justice, in Northern Liberties v. St. John's Church, 13 Penn. St. R. 104, says, very forcibly: "I think the common mind has everywhere taken in the understanding that taxes are a public imposition, levied by authority of the government for the purpose of carrying on the government in all its machinery and operations that they are imposed for a public purpose." See also Pray v. Northern Liberties, 31 Penn. St. 69; Matter of the Mayor of New York, 11 Johnson R. 77; Camden v. Allen, 2 Dutcher, 398; Sharpless v. Mayor, &c., supra; Hanson v. Vernon, supra; Whiting v. Fond du Lac, supra.

We have established, we think, beyond cavil, that there can be no lawful tax which is not laid for a public purpose. It may not be easy to draw the line in all cases so as to decide what is a public purpose in this sense, and what is not.

It is undoubtedly the duty of the legislature which imposes or authorizes municipalities to impose a tax, to see that it is not to be used for purposes of private interest instead of a public use, and the courts can only be justified in interposing when a violation of this principle is clear, and the reason for interference cogent. And in deciding whether, in the given case, the object for which the taxes are assessed falls upon the one side or the other of this line, they must be governed mainly by the course and usage of the government, the objects for which taxes have been customarily and by long course of legislation levied, what objects or purposes have been considered necessary to the support and for the proper use of the government, whether state or municipal. Whatever lawfully pertains to this, and is sanctioned by time and the acquiescence of the people, may well be held to belong to the public use, and proper for the maintenance of good government, though this may not be the only criterion of rightful taxation.

But in the case before us, in which the towns are authorized to contribute aid by way of taxation to any class of manufactures, there is no difficulty in holding that this is not such a public purpose as we have been considering. If it be said that a benefit results to the local public of a town by establishing manufactures, the same may be said of any other business or pursuit which employs capital or labor. The merchant, the mechanic, the innkeeper, the banker, the builder, the steamboat owner, are equally promoters of the public good, and equally deserving the aid of the citizens by forced contributions. No line can be drawn in favor of the manufacturer which would not open the coffers of the public treasury to the importunities of two thirds of the business men of the city or town.

A reference to one or two cases adjudicated by courts of the highest character will be sufficient, if any authority were needed, to sustain this proposition :

In the case of Allen v. The Inhabitants of Jay, 60 Maine, 124, the town meeting had voted to loan their credit to the amount of $10,000 to Hutchins and Lane, if they would invest $12,000 in a steam saw-mill, 12

VOL. II.

Vol. II.]

CITIZENS' SAVINGS, ETC., ASSOCIATION v. CITY OF TOPEKA.

[No. 4.

grist-mill, and box-factory machinery, to be built in that town by them. There was a provision to secure the town by mortgage on the mill, and the selectmen were authorized to issue town bonds for the amount of the aid so voted. Ten of the taxable inhabitants of the town filed a bill to enjoin the selectmen from issuing the bonds.

The supreme judicial court of Maine, in an able opinion by Chief Justice Appleton, held that this was not a public purpose, and that the town could levy no taxes on the inhabitants in aid of the enterprise, and could therefore issue no bonds, though a special act of the legislature had ratified the vote of the town, and they granted the injunction as prayed for.

Shortly after the disastrous fire in Boston, in 1872, which laid an important part of that city in ashes, the governor of the state convened the legislative body of Massachusetts, called the general court, for the express purpose of affording some relief to the city and its people from the sufferings consequent on this great calamity. A statute was passed, among others, which authorized the city to issue its bonds to an amount not exceeding twenty millions of dollars; which bonds were to be loaned, under proper guards for securing the city from loss, to the owners of the ground whose buildings had been destroyed by fire, to aid them in rebuilding.

In the case of Lowell v. City of Boston, in the supreme judicial court of Massachusetts, not yet reported, the validity of this act was considered. We have been furnished a copy of the opinion, though it is not yet reported in the regular series of that court. The American Law Review for July, 1873, says, that the question was elaborately and ably argued. The court, in an able and exhaustive opinion, decided that the law was unconstitutional, as giving a right to tax for other than a public

purpose.

The same court had previously decided, in the case of Jenkins v. Andover, 103 Massachusetts, 94, that a statute authorizing the town authorities to aid by taxation a school established by the will of a citizen, and governed by trustees selected by the will, was void because the school was not under the control of the town officers, and was not, therefore, a public purpose for which taxes could be levied on the inhabitants.

The same principle was decided by the state court of Wisconsin in the case of Curtis v. Whipple, 24 Wis. 350. In that case a special statute which authorized the town to aid the Jefferson Liberal Institute was declared void, because, though a school of learning, it was a private enterprise not under the control of the town authorities. In the subsequent case of Whiting v. Fond du Lac, already cited, the principle is fully considered and reaffirmed.

These cases are clearly in point, and they assert a principle which meets our cordial approval.

We do not attach any importance to the fact that the town authorities paid one instalment of interest on these bonds. Such a payment works no estoppel. If the legislature was without power to authorize the issue of these bonds, and its statute attempting to confer such authority is void, the mere payment of interest, which is equally unauthorized, cannot create of itself a power to levy taxes, resting on no other foundation than the fact that they have once been illegally levied for that purpose.

Vol. II.]

BOON v. ETNA INSURANCE CO.

[No. 4.

The act of March 2, 1872, concerning internal improvements, can give no assistance to these bonds. If we could hold that the corporation for manufacturing wrought iron bridges was within the meaning of the statute, which seems very difficult to do, it would still be liable to the objection that money raised to assist the company was not for a public purpose, as we have already demonstrated.

The judgment of the circuit court affirmed.

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A policy contained a proviso that the company would not be liable for "loss or damage by fire which may happen or take place by means of any invasion, insurrection, riot, or civil commotion, or of any military or usurped power." During the late civil war, while a battle was going on, to prevent certain stores from falling into the hands of the enemy, a United States officer set fire to the building in which the stores had been placed, from whence it was communicated to the property insured, and a loss ensued. Held, that the battle was not the proximate cause of the loss, and that the terms of the policy did not warrant a refusal to adjust.

THIS was an action of assumpsit on a policy of fire insurance, brought to the circuit court of the United States for the District of Connecticut, and tried, on an issue closed to the court, before Woodruff, Circuit Judge, and Shipman, District Judge, at the April term, 1874.

The facts are stated in the opinion.

F. Fellowes, for plaintiffs.

G. W. Parsons, for defendant.

WOODRUFF, J. The facts in this case are not doubtful nor in dispute. The action is brought to recover from the defendant the amount of an insurance against loss by fire upon the goods of the plaintiffs in their store in Glasgow, Missouri, in the sum of six thousand dollars. It is founded on a policy executed by the defendant, dated September 2, 1864, and the goods were destroyed by fire on the 15th day of October, 1864, within the term of the insurance. The loss was sufficiently great to entitle the plaintiffs to recover, if the defendant is liable at all, the whole sum insured. The plaintiffs have complied with all the terms and conditions of the policy, by the payment of premium, furnishing proper preliminary proofs, and compliance with all other requirements. The policy however contained the following express proviso, annexed to the agreement of insurance, and in the body of the policy, namely:

"Provided always, and it is hereby declared, that the company shall not be liable to make good any loss or damage by fire which may happen or take place by means of any invasion, insurrection, riot, or civil commo

Vol. II.]

BOON v. ETNA INSURANCE Co.

[No. 4.

tion, or of any military or usurped power, or any loss by theft at or after a fire."

The defence herein rests solely on this proviso, and on the facts which are claimed to bring the plaintiffs' loss within its operation, so as to exempt the defendant from liability under the policy. At and before the time of the fire in question, the city of Glasgow, within which the said store of the plaintiffs was situated, was occupied as a military post by the military forces and portion of the army of the United States engaged in the civil war, then, and for more than three years theretofore, prevailing between the government and the citizens of several Southern States who were in rebellion, and seeking to establish an independent government, under the name of "The Confederate States of America."

As such military post, the said city of Glasgow was made the place of deposit of military stores for the use of the army of the United States, which stores were in a building called the city hall of the said city of Glasgow, situated on the same street, and on the same side of the street, and about one hundred and fifty feet distant from the plaintiffs' store, three buildings being located in the intervening space, not however in actual contact with either.

Colonel Chester Harding, an officer of the United States government, and in command of the military forces of the United States, held the possession of the city and had lawful charge and control of the military stores aforesaid.

On the said fifteenth of October, 1864, an armed force of the rebels, under military organization, surrounded and attacked the city at an early hour in the morning, and threw shot and shell into the town, penetrating some buildings and killing soldiers and citizens. The city was defended by Colonel Harding and the military forces under his command, and battle between the loyal troops and the rebel forces continued for many hours. The citizens fled to places of security, and no civil government prevailed in the city. The rebel forces were superior in numbers, and, after a battle of several hours, drove the forces of the government from their position, compelled their surrender, and entered and occupied the said city. During the battle, and when the government troops had been driven from their exterior lines of defence, it became apparent to Colonel Harding that the city could not be successfully defended, and he thereupon, in order to prevent the said military stores from falling into the possession of the rebels, ordered Major Moore, one of the officers under his command, to destroy them. In obedience to that order to destroy the said stores, and having no other means of doing so, Major Moore set fire to the city hall, and thereby the said building, with its contents, was consumed. Without other interference, agency, or instrumentality, the fire spread along the line of the street aforesaid to the building next adjacent to the city hall, and from building to building through two other intermediate buildings, to the store of the plaintiffs, and destroyed the same, together with its contents, including the goods insured by the defendant's policy aforesaid.

During this time, until after the fire had consumed such goods, the battle continued, and no surrender had taken place, nor had the forces of the rebels nor any part thereof obtained the possession of or entered the city.

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