to the first of these is that given above-the charter is in no sense a contract between the state and the people of the locality incorporated. In dealing with the second question, however, we must bear in mind the provisions of the United States Constitution respecting private rights of property. It may fairly be asked whether a creditor of a city, who has loaned his money upon the strength of the city's credit, is not deprived of his property without due process of law if the legislature withdraws from the city so large an amount of the taxable property previously within its limits that the remaining portion is not able to pay the debts, unless it permits the bondholders to go against the property of the segregated portion. Again wemust subdivide our problem into two parts: (1) If in dividing a municipality the legislative enactment is silent as to the apportionment of the debt, what is the rule for apportioning the same? (2) If the legislature lays down a rule of apportionment, is it constitutional so as to infringe no rights of the creditors of the old municipality? § 17. Legislative apportionment of debt on division of public corporations. In Laramie County v. Albany Co. (6) the Supreme Court of the United States was called upon to pass upon the first of these two problems. Laramie County, after having incurred a heavy debt, was reduced in area until it occupied something less than onethird of its original territory, other counties being erected out of the portions thus cut off. No provision was made by the legislative enactments for any apportionment of the debt of the old county of Laramie between the new and (6) 92 U. S. 307. smaller county of Laramie and the other counties. The new Laramie County paid off the debt and brought suit against the other counties, seeking to recover from the latter their pro rata share of the amount paid. The courtdecided that where the legislature failed to express the contrary intention, the portion of the old public corporation which still bore the original name was legally the one liable to pay the debts and that no right to contribution existed. Said the court: "Regulation upon the subject may be prescribed by the legislature; but, if they omit to make any provision in that regard, the presumption must be that they did not consider that any legislation in the particular case was necessary. Where the legislature does not prescribe any such regulations, the rule is that the old corporation owns all the public property within her new limits, and is responsible for all debts contracted by her before the act of separation was passed. Old debts she must pay, without any claim for contribution; and the new subdivision has no claim to any portion of the public property except what falls within her boundaries, and to all that the old corporation has no claim." Once more we must be careful to note that this settles only the rights of the inhabitants of the districts concerned among themselves and does not determine the rights of creditors, if the old locality, or what is left of it, is not able to pay the debts. It is clear that so long as the remnant of the old corporation is fairly able to pay, in such a case as the one just considered, the creditor must look to that and cannot proceed against the severed portions. § 18. Same: When creditors are injuriously affected. If, however, the creditor cannot obtain payment from the portion which remains with the old name, it seems that he ought to have some remedy against the other portions, and the courts so hold where possible. For example, where a municipal corporation is dissolved and all its territory divided between two other municipal corporations, the Supreme Court of the United States has held that the corporations to which the territory is added become liable pro rata for the debts of the dissolved corporation (7). In another case, the United States circuit court decided that where the legislature cut out from the original city substantially all the taxable property, leaving the creditors with insufficient security for their claims if compelled to look to the balance of the original city for payment, the severed portion would be regarded by the court as substantially the old corporation and liable for its debts (8). In such a case the court goes behind the legislative apportionment in order to prevent the impairment of the obligation of the contract between the creditor and the old corporation. If, however, the legislature simply abolishes the old corporation and puts nothing in its place, it seems that the courts in many cases find it impossible to give creditors who are thereby injured any effective remedy (9). This topic is further treated in the article on Constitutional Law, §§ 233-34, in Volume XII of this work. § 19. Possible basis of right to local self-government. In the absence of special constitutional provisions, have (7) Mount Pleasant v. Beckwith, 100 U. S. 514. (8) Brewis v. Duluth, 3 McCrary (U. S. Circ. Ct.), 219. the inhabitants of the various localities a constitutional right to local self-government? It seems not, both upon principle and according to the weight of authority. Inthe first place, public corporations are organized in pursuance of charters granted by the legislature, either by special or general acts. These acts may be altered, amended or repealed at the will of the legislature, unless some constitutional provision prohibits such action. But, it may be argued, if the legislature allows the public corporations to exist at all, it must permit them to regulate their own local affairs as they please. It is difficult to see why this should be so. Historically, in England the legislature exercised a free hand in this matter; and, as we have already seen, the state legislature in our constitutional system may do any legislative act not forbidden by the constitution. The only possible basis for a denial, of the power of the legislature to interfere with the local government of a municipal corporation must, in the absence of an express constitutional provision, rest upon some implied prohibition to be gathered from the fundamental principles of our constitutional system. In spite of the fact that some very eminent authorities have thought that such an implication can be found, the better view seems to be that the courts cannot upset the legislature's enactments upon so vague a principle. It is fundamental in our constitutional system that a court should not hold a legislative enactment to be void because unconstitutional unless it is clearly so; any reasonable doubt should be settled in favor of the legislature. See the article on Constitutional Law, §§ 51-53, in Volume XII of this work. Inasmuch as there is reasonable doubt whether an implied right to local self-government is to be discovered among the fundamental principles of our state constitutional law, it would seem that the courts ought not to interfere unless they can base their action upon some specific provision of the constitution. § 20. Prevailing view against the right. One of the early cases dealing with this subject is that of Darlington v. Mayor, etc., of New York (10), decided in 1865. In that case the state legislature provided that whenever any property should be destroyed or injured in consequence of any mob or riot, the city or county in which such property was situated should be liable to an action by the owner for the damages so sustained. In deciding that the statute was constitutional and did not deprive the city of its property without due process of law, as the property was here devoted to a legitimate city purpose, the court used very broad language in describing the power of the legislature over public corporations. The following passage is typical of the attitude of the New York courts: "City corporations are emanations of the supreme lawmaking power of the state, and they are established for the more convenient government of the people within their limits. In this respect corporations chartered bythe crown of England and confirmed at the Revolution stand on the same footing with similar corporations created by the legislature. Their boards of aldermen and councilmen and other officers are as truly public officers as the boards of supervisors or the sheriffs and clerks of counties; and the property entrusted to their care and (10) 31 N. Y. 164. |