§ 338 (172). Same Subject. - Accordingly, the substitution of a new municipal charter in the place of a previous charter, or a change

an indebted city which had contracted with the creditor to levy a special tax upon real estate within its limits to pay his debt, surrendered its charter, and the inhabitants residing within the limits of the city organized themselves into a municipal government under the general incorporation act of the State, in the same way that inhabitants might do who had not been previously incorporated. The creditor filed a bill in equity asking for a decree for the amount of his debt, and that the city be compelled to levy a tax to pay the same. The bill was dismissed by the Circuit Court, and its decree was affirmed by the Supreme Court of the United States, on the ground that the remedy of the plaintiff was by an action at law against the new corporation; and if judgment be recovered and not paid, then by mandamus upon its officers to compel them to raise the requisite funds for its payment in the manner prescribed by its charter. The court held that the new organization, embracing substantially the same corporators and the same territory, although different powers were possessed under the new charter and different officers administered its affairs, was in law to be deemed the successor of the previous corporation and entitled to its rights. Mr. Justice Field, delivering the opinion of the court, said:

[not of a public nature, see Meriwether v. Garrett, supra], a court of equity will equally take possession of it for the benefit of the creditors of the corporation. In this case it is averred in the bill that the city of Pensacola, upon the surrender of its original charter, did not possess any property. It is not necessary, however, in the view we take of the proceedings for the reorganization of the city government, to consider the effect of an absolute repeal of the charter of a municipal corporation upon its obligations. It is sufficient that here, in our judgment, there was a continuation of the corporation of Pensacola, with its original rights of property and obligations, not a new and distinct creation or corporate capacity and liability."

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Case of Mount Pleasant v. Beckwith. Here an indebted municipal or public corporation was legislated out of existence, and its territory was annexed to similar corporations. In the absence of legislative provision otherwise, it was held that the latter corporations became entitled to all the property of the abrogated corporation, and severally liable for a proportionate share of its then subsisting legal debts, and that they were vested with the power to raise revenue with which to pay such debts by levying taxes upon the property thus annexed, and the persons residing thereon; and a bill in equity by the creditors of the extinguished corporation against the corporations thus succeeding to its property and powers was sustained to the extent that the amount of the debt was ascertained, and the sum apportioned among the corporations to which the territory of the indebted corporation had been annexed, and a decree rendered for the amounts thus apportioned to be collected in the manner provided by law. Mount Pleasant v. Beckwith, 100 U. S. 514; infra, § 357.

"The ancient doctrine, that, upon the repeal of a private corporation, its debts were extinguished, and its real property reverted to its grantors, and its personal property vested in the State, has been so far modified by modern adjudications that a court of equity will now lay hold of the property of a dissolved corporation, and administer it for the benefit of its creditors and stockholders. The obligation of contracts, made whilst the corporation was in existence, survives its dissolution; and the contracts may be enforced by a court of equity, so far as There is no intimation in later deto subject for their satisfaction any cisions of the Supreme Court that they property possessed by the corporation are, in any respect, inconsistent with at the time. In the view of equity, its this judgment. See Meriwether v. Garproperty constitutes a trust fund rett, 102 U. S. 472; Barkley v. Levee pledged to the payment of the debts Commissioners, 93 Ú. S. 258; Broughof creditors and stockholders; and if ton v. Pensacola, 93 U. S. 266; a municipal corporation, upon the surrender or extinction in other ways of its charter, is possessed of any property

Thompson v. Allen County, 115 U. S. 550; Amy v. Watertown, 130 U. S. 301. The actual judgments in all these

in such a charter in whole or in part, where substantially the same territory and the same inhabitants are concerned, will not be pre

sumed, or be held to be the creation of a new corporation, but the assumption by the old one of new powers and privileges.1 And where the rights of creditors are involved, the presumption is extremely strong that the identity of the corporation continues, notwithstanding different powers are possessed by the new organization,

tions did not run during the time when the territory and inhabitants of the former town were a taxing district only, and therefore was not a bar to the action; and that the plaintiff was entitled to a peremptory mandamus requiring the proper authorities of the city of Fayetteville to levy and collect taxes upon property and polls within the city with which to pay the plaintiff's claim. Broadfoot v. Fayetteville, 124 N. Car. 478.

Watervliet Case. The town of Colonie was created out of a portion of the town of Watervliet. Thereafter the remaining part of the town of Watervliet was again divided, one part being erected into the town of Green Island, and the city of Watervliet was created, by a statute which defined its boundaries, out of the remainder. Action was brought in the name of the former town of Watervliet against the town of Colonie, to enforce an apportionment of the assets and liabilities belonging to or devolving upon each town at the time when Colonie was set off from Watervliet. It appeared that a few uninhabited strips of land, not exceeding three acres in extent, were neither included in the two new towns nor in the city of Watervliet. It was held that it was the intention of the legislature to dissolve the town of Watervliet and to incorporate its territory and inhabitants in new political divisions; that the town and its officers had ceased to exist; that it had no representatives; and that no person was authorized to begin a suit in its name. Watervliet v. Colonie, 27 N. Y. App. Div. 394.

Milster v. Spartanburg, 68 S. Car. 26, quoting text; Mobile Transportation Co. v. Mobile, 128 Ala. 335; State v. Natal, 39 La. Án. 439, where it was said: "The city of New Orleans founded by Bienville about 1718 has never ceased to exist as an agglomeration of human beings for social, commercial, and industrial purposes. In 1805 those inhabitants were given a charter, for the first time since the cession of 1803, and that charter has been altered

and amended some way or other, in subsequent years, viz.: 1812, 1818, 1833, 1835, 1837, 1846, 1850, 1852, 1870, and 1882; but the city, the existence of which was generally recognized by the various Constitutions, has retained its identity, not only as a matter of fact, but also as a matter of legal necessity." See supra, § 336, and cases in note.

Mr. Girard's will of 1831 gave the residuum of his estate by its corporate name to the old city of Philadelphia in trust for certain objects, the primary one being the college, and the secondary ones "to enable the city to improve its police, to improve the city property and the appearance of the city itself, and to diminish taxation." The old city accepted the trust. By 1854 twenty-eight distinct suburban municipalities had grown up around the old city, and by an act of that year all of their charters and that of the old city itself were abolished, and their rights of property transferred to the new consolidated corporation of the city of Philadelphia, which instead of being two miles square has about one hundred and twenty-nine square miles. The heirs of Mr. Girard claimed that the annihilation of the old city and its merger into the immense consolidated corporation defeated the object of the testator. But the court held that "the identity of the corporation was not destroyed, and that the change in its name, the enlargement of its area, &c., did not affect its title to property held at the time of such change, or its capacity to execute the trusts of the will." Girard v. Philadelphia, 7 Wall. 1. The essential point in this case is that it establishes, notwithstanding the change of charter, the continuous legal identity of the new city corporation with the old. The enactment of a new charter for a city does not impair the right of the city to collect taxes levied under the repealed charter, although rights accruing thereunder are not expressly reserved and continued. Bennison v. Galveston, 34 Tex. Civ. App. 382.

and different officers administer its affairs.' It has been declared that the power of the State to alter or destroy its corporations is not greater than the power of the State to repeal its legislation. Exercise of the latter power has been repeatedly held to be ineffectual to impair the obligation of a contract. The repeal of a law may be more readily undertaken than the abolition of cities, townships, or other municipal corporations or the change of their boundaries. The abolition of a municipality or a change of its boundaries may put on the form of a different purpose than the violation of a contract right, but the courts will not permit themselves to be deceived. They will not inquire into the motives of the legislature of a State, but they will not ignore the effect of its action. Accordingly, where the legislature has by statute dissolved or abolished municipal corporations, thereby, in form, at least, terminating their existence, and, by the same statute, or by other enactments, has provided another form

Broughton v. Pensacola, 93 U. S. 266; approving Milner's Admx. v. Pensacola, 2 Woods, 632; Walnut Township v. Jordan, 38 Kan. 562; ante, § 233 and cases cited, § 336, note; post, §§ 339, 346, 347.

In delivering the judgment of the court in Broughton v. Pensacola, 93 U. S. 266, Mr. Justice Field observes:

Although a municipal corporation, so far as it is invested with subordinate legislative powers for local purposes, is a mere instrumentality of the State for the convenient administration of government; yet, when authorized to take stock in a railroad company, and issue its obligations in payment of the stock, it is to that extent to be deemed a private corporation, and its obligations are secured by all the guaranties which protect the engagements of private individuals. The inhibition of the Constitution, which preserves against the interference of a State the sacredness of contracts, applies to the liabilities of municipal corporations created by its permission; and although the repeal or modification of the charter of a corporation of that kind is not within the inhibition, yet it will not be admitted, where its legislation is susceptible of another construction, that the State has in this way sanctioned an evasion of or escape from liabilities the creation of which it authorized. When, there fore, a new form is given to an old municipal corporation, or such a corporation is reorganized under a new charter, taking in its new organization the place of the old one, embracing substantially

the same corporators and the same territory, it will be presumed that the legislature intended a continued existence of the same corporation, although different powers are possessed under the new charter, and different officers administer its affairs; and in the absence of express provision for their payment otherwise, it will also be presumed in such case that the legislature intended that the liabilities as well as the rights of property of the corporation in its old form should accompany the corporation in its reorganization."

The remark of the learned justice that as respects authorized and valid contracts a municipal corporation stands upon the same footing as a private corporation or individual is one of extreme importance in determining the constitutional scope of legislative power in any form over such contract and over the rights of the other party under the contract. See ante, §§ 112, 113, and particularly People v. O'Brien, 111 N. Y. 1. See and compare Barkley v. Levee Com'rs, 93 U. S. 258, where a levee district

a quasi public corporation was superseded in its functions by a law dividing the district, and creating a new corporation for one portion and placing the other under the charge of the local authorities, and where under the circumstances a judgment creditor was held to be without legal remedy. See also cases of the city of Memphis, city of Mobile, and city of Brownsville, ante, § 336, note.

2 Graham v. Folsom, 200 U. S. 248.

of government for the same territory, whether by the same or by another name, the Supreme Court of the United States has steadily refused to regard such legislation as affecting the identity of the corporation or its continued existence or as relieving it from its previous liabilities.1

§ 339 (173). Same Subject. The case contemplated in the preceding sections, in which the continuous legal existence and identity of a municipality will be held to exist, where substantially the same inhabitants and the same territory are concerned, notwithstanding a change in boundaries and form of organization has taken place, is one of quite common occurrence and of easy solution. But suppose the legislature absolutely repeals the charter or constituent act of an indebted municipality, and makes no provision for the payment of its debts, or, instead of an absolute repeal, it makes such changes as do not relate substantially to the same inhabitants and the same territory, as for example supersedes or dissolves the indebted municipality, and annexes what constituted its territory and people to other municipalities, and makes no provision for its debts or their mode of payment. Is the creditor remediless except by an appeal to the legislature? This is a difficult inquiry, and we have endeavored to answer it in the preceding sections and in the cases referred to in the notes, as far as it has been possible to do so in the existing state of the adjudications of the Supreme Court of the United States, whose determination of such questions is final and authoritative.

The author, after consideration, ventures the suggestion that the true solution of the many difficulties may possibly be found in the consideration that the power of a municipality to levy taxes to pay its debts as the power existed at the time when the debts were created is in its essence not simply the grant of a power to the incor

Broughton v. Pensacola, 93 U. S. 266; Mt. Pleasant v. Beckwith, 100 U. S. 520; Mobile v. Watson, 116 U. S. 289; Shapleigh v. San Angelo, 167 U. S. 646. See also Morris v. State, 62 Tex. 728, 730; Ranken v. McCallum, 25 Tex. Civ. App. 83; Amy v. Selma, 77 Ala. 103; Greer County v. Clarke, 12 Okla. 197. The conclusions reached by the Supreme Court of the United States have been thus expressed: The plenary power of the State over its municipal corporations to change their organization, to modify their mode of internal government, or to abolish them altogether, is not restricted by

contracts entered into by the municipality with its creditors or with private parties. An absolute repeal of a municipal charter is therefore effectual so far as it abolishes the old corporate organization; but when the same, or substantially the same, inhabitants are erected into a new corporation, whether with extended or restricted territorial limits, such new corporation is treated as in law the successor of the old one, entitled to its property rights, and subject to its liabilities. Per Shiras, J., in Shapleigh v. San Angelo, 167 U. S. 646, 654.