Santa Cruz Railroad v. Board of Supervisors

McKEE, J. By an act of the legislature of the state, passed April 4, 1870, the people of any county of the state "who proposed to aid in the construction of a railroad in their county were authorized to vote upon the proposed aid, at an election to be held on a day and at the places in the county to be named in a notice of election for that purpose. The statute required that there should be stated in the notice the amount of bonds proposed to be issued, and a definite description of the route upon which the railroad was to be constructed; and that the notice itself should be published once a week for at least thirty days before the election. If the election resulted in favor of granting the proposed aid, the board of supervisors of the county were then authorized to enter into a contract with parties for the construction of a railroad upon the proposed route, and to issue bonds pursuant to the contract, bearing interest at seven per cent per annum, payable within twenty years from the date of their issuance, [100]and to provide by taxation for the payment of the interest and principal of said bonds as they became due.

By virtue of this authority, the board of supervisors of Santa Cruz county submitted to the electors of the county, at an election called for the fifth day of November, 1872, the question whether they would consent to aid, to the extent of two hundred and forty thousand dollars, in the construction of a railroad in the county, of “not less than a three-foot gauge, and beginning at or near the Pajaro depot, on the Southern Pacific Railroad, in the county of Monterey, and running thence, in the most practicably direct route, through the county of Santa Cruz, crossing the Pajaro river near Watsonville, and crossing the San Lorenzo river between the county road leading to Sequel and the bay of Monterey, and thence along or near the coast to the boundary of said county, near the southeast corner of the Point New Year’s ranch.”

A majority of the electors voting at the election cast their votes in favor of the proposed aid for the construction of such a railroad; and, on the fourth day of August, 1873, the board of supervisors of the county entered into the alleged contract with the Santa Cruz Railroad Company to carry out the wishes of the people of the county as expressed at the election. In entering into the contract the board acted as the agent of the county. By its general powers it had no contractual capacity to build, or aid in building, railroads in the county. Whatever power it had in that respect it derived solely from the statute of 1870. That statute was repealed in January, 1874. While it was an existing law it was, to say the least of it, of doubtful constitutionality, for a railroad company is nothing more than a private corporation, and it would seem to be self-evident that the legislature had no power to authorize any county in the state to raise money by taxation for the purpose of a private corporation.