Town of Depere v. Town of Bellevue

Towns : Their liability to contribute to pay debts of other towns from which they were formed. 1. If a part of the territory and inhabitants of a town are separated from it hy annexation to another, or by the creation of a new corporation the remaining part of the town, or the former corporation, retains all its property and franchises, and remains subject to all its obligations, unless some express provision to the contrary is made by the act authorizing the separation. 3. By authority of law, in 1853, the town of Depere, to aid in the construction of certain roads, issued its bonds, payable in twenty years, with interest payable annually. Subsequently, by resolution of the county board, certain parts of the territory and inhabitants previously included in said town, were organized into the defendant towns, the remaining territory and inhabitants still constituting the town of Depere. In an action to enforce contribution from the defendant towns of their proportionate share of sums paid by the town of Depere as interest on said bonds, no provision appearing to have been made in the organization of the defendant towns for the payment of any part of said indebtedness by them: Meld, that they were not liable. 3. Gramford Gounty ». Iowa Gounty (3 Chand., 14), and Town of Milwcmlcee v. Gity of MiVwauhee (13 Wis., 93), approved and followed.

APPEAL from the Circuit Court for Fond du Lac County. This action was commenced in Brown county, by the town and village of Depere against the defendant towns, to enforce contribution on account of moneys paid by the plaintiffs upon indebtedness incurred by the original town of Depere when the defendants constituted a part'thereof. The judge of that circuit having been of counsel, the case was transferred to Eond du Lac county. The complaint alleges, in substance that all the parties are duly organized corporations; that prior to April 2, 1853, and until July 1, 1854, they had but one corporate existence, and were known as the town of Depere, which comprised the entire territory of all of them; that in May, 1854, under a specified act of the legislature authorizing it so to do, the town of De-pere voted to issue its bonds in aid of a certain plankroad, and the same were issued on or about the 1st of July, 1854, payable in twenty years, with interest payable annually; that the present town and village of Depere have been compelled to pay and have paid seventeen years interest on such bonds; and that the defendants have paid nothing, but refuse to pay their proportionate share; and, after stating the assessed valuation of each of the parties, and the proportion each ought to pay, it asks judgment that the defendants be required to contribute according to such proportion. The defendants demurred to the complaint, on the grounds of defect of parties plaintiff, improper joinder of causes of action, and insufficiency. Erom a judgment sustaining the demurrer the plaintiffs appealed. 1. The demurrer does not state what defect of parties exists, and is therefore bad. 13 Abb. Pr. R., 448. There is no such defect 2. Both the town and village have such an interest in the subject of the action as to justify their joinder. R. S., ch. 122, secs. 18 and 19; 17 Wis., 455; Story’s Eq. Jur., pp. 72, 74; 2 Wis., 367; 5 id., 151; 18 id., 566 ; P. and L. Laws of 1857, ch. 276. 3. The defendant towns, having been organized out of the old town of Depere after the issue of the bonds, are liable to contribute for their payment. Towns are quasi corporations. R. S., ch. 15, sec. 1; A. and A. on Corp., 20; 3 Wis., 714. Debts against such corporations are a territorial or corporate, and not an individual claim. R. S., ch. 15, secs. 77, 78. If the legislature or the county board of supervisors could form new towns out of the territory of an old town which should, not he liable for its bonded debt, they could so relieve the whole territory, or all but a few acres therefrom. Such action would impair the obligation of the contract, and therefore be void. 4. The act authorizing the issue of the bonds and subjecting the property of the town to taxation for their payment was a contract with the tax payers of the town, as well as with the bondholder, that all the then territory should be holden for the debt; consequently the remaining tax payers can raise the question of liability. 4 Wheat., 507; 7 WaL, 613; Cooley’s Con. Lim., 285 — 294. 5. Any law which takes away the right of taxation of part of the property pledged by the original act is a nullity. 4 WaL, 535. 6. An action at law to collect the interest on the principal of the bonds when due must be against the town of Depere alone. 21 Wis., 636. By the act incorporating the village of Depere, it could be made liable at law for its proportion of the debt, but the remaining territory constituting the defendant towns is liable only in equity. 7. When a portion of the territory of an organized town in this state is separated from it and annexed to another, or erected into a new corporation, the originial corporation retains all its property, power, rights and privileges, subject to all its obligations and duties and bound by all its contracts. 12 Wis., 98 ; 9 id., 39 ; 4 Mass., 278, 384; 10 id., 430; 16 id., 76; 4 Wheat., 507; 2 Johns. Ch., 320; 2 Wend., 109; 45 Me., 133 ; 11 id., 118; 8 Pick., 524 ; 2 N. H., 20. But equity will compel the new town, formed from the old territory, to pay its proportion of the previously incurred debt, when the act creating the division is silent on the subject. 1. The complaint is defective in not showing that the defendant towns were ever set off from the town of Depere, or if so, when and by what power or proceedings. If done by the board of supervisors, as in this case, the steps taken by them for that purpose were jurisdictional, and must be alleged, either specially or in the general mode provided by sec. 23, ch. 125, R. S. 1 Cow., 316; 6 id., 221, 234; 3 "Wend., 247; 5 Denio, 102; 12 How. Pr. R., 542; 13 Abb. Pr. R., 183; 14 id., 147. The appearance and demurrer of these defendants does not admit that jurisdiction, or any facts except such as are well pleaded. Gould’s PI, 420, ch. 9, pts. 5 and 6. 2. The complaint is also defective in not stating when the defendant towns were set off, whether before or after the old town of Depere paid the interest on the bonds. If after, the defendants are not liable. The court cannot take judicial notice of the proceedings of the board of supervisors in creating them. Harker v. Mayor, etc., 17 Wend., 199; Willcoclc’s Mun. Corp.; People v. Byder, 2 Kern., 438-9. 3. The complaint also fails to show that in the acts dividing the territory of the old town any pro • vision was made for an apportionment of the debts. Without such a provision, the new corporations are not liable therefor. Town v. City of Milwaukee, 12 Wis., 93; Att'y Qen'l v. Fitzpatrick, 2 id., 543; 21 id., 348; 25 id., 46; Portland v. Windham, 4 Mass., 384; Brunswick v. Punning, 7 id., 445; Hampshire v. Franklin, 16 id., 76; Baptist Society v. Candía, 2 N. H., 20; North Yarmouth v. Skillings, 45 Me., 133; The People v. Morrill, 21 Wend., 563, 576; 47 Me., 127. The town is the “artificial person,” and not the territory, and when a new town is organized out of part of an old one, it becomes as distinct and separate therefrom as one natural person is from another, and no more liable for the debts of the old town. Equity will not enforce contribution against parties who were not equally bound to share the burden. Adams’ Eq., 566; Willard’s Eq., 106. 4. It would not be unconstitutional even to so divide a town as to leave insufficient territory to pay its debts. The legislature has the constitutional power to divide towns, or to delegate that authority,.as they have done, and persons contracting with a town do so subject to that constitutional power." R. S., ch. 10, sec. 28; Const., art. IY, sec. 22. Such a division would not impair the obligation of the contract, because the town would still be liable, and all the property afterward coming into or acquired by it could be resorted to. 2 Story on Con., § 1381; 4 Wheat, 200, 201; Cooley’s Con. Lim., 287. But suclr a case could hardly arise, because the consent of the town is necessary thereto. 5. No cause of action is shown in favor of the village of Depere. The complaint does not show whether it ever paid any of this interest, or, if any, whether it paid more than the proportion required by its charter. Deiolt v. Garter, 31 Ind., 355; Berkshire v. Shultz, 25 id., 528; 30 id., 418; 8 How. Pr. R., 392; 24 id., 353; 21 Wis., 678.