Murdock v. Woodson, Governor.

always the contrary one; and sales for vastly less than the lien of the state have been legislatively authorized or confirmed, and such confirmation approved by the supreme court. See, on this point, the case of The State v. McKay, (43 Mo. 594), relating to the sale by the state of the Iron Mountain road. Accordingly this very act of March 31, 1868, provided, if $8,350,000 should not be bid or realized at the sale, that the governor should buy in the road in the name of the state; and the state, in case a sale was made, assumed $700,000 and interest due on the bonds issued by the county of St. Louis, and also $650,000 of the floating debt of the company. The state therefore authorized a sale of this road for $7,000,000 net, which was confessedly some millions less than the amount for which the company is liable on account of the state bonds. It can scarcely be doubted if such a sale had been made that the purchaser would have obtained, as against the state, a perfect title, and yet the state would have received but $7,000,000.

The practical effect of such a sale would have been to annihilate all the stock and all the interest of the stockholders in the road. The stock of counties and municipalities of the state, obtained in exchange for their bonds, would have been sacrificed, except the amount assumed for St. Louis county. The floating debt of the company, except the portion assumed by the state, would never have been paid.

But such a sale was not made, for by the fifth section of the act the company, in consideration of $5,000,000 paid to the state, received a "full discharge from all claims or debts due the state, and all liability growing out of the issue of the bonds of the state to aid in the construction of its road." This left the corporation in esse-preserved the stock and the interests of the stockholders-and gave to the unsecured creditors of the company the opportunity to obtain payment from it. If it were in the province of the

Murdock v. Woodson, Governor.

court to pass judgment as to whether it were better to have sold to others outright for $7,000,000 net, with the consequences above pointed out, or to the company for $5,000,000, could we say that the legislature acted unwisely in adopting the fifth section?

In examining the transaction, we must look at substance rather than form-and in effect it was a sale of the state's interest to the company for $5,000,000. The legislature had the power to order a sale, and not being restrained by the constitution, it necessarily had the power to fix the price and terms of the sale. It could have authorized the sale for $5,000,000 to a third person-why not to the company for the same amount? There being no limitation in the constitution as to the price at which the general assembly might authorize the state to sell the road or to buy it in, or to re-sell it, the amount which the state would fix upon as the value of its security would, after all, depend upon legislative judgment. If the state had purchased for the $8,350,000 it might afterwards have sold it for any price it might see fit to take, whether more or less than that sum. The state agreed to take and did receive from the company the $5,000,000. The money was raised upon the mortgage and bonds which the present plaintiffs are here to protect. This mortgage was made and the money borrowed on the faith of the action of the state, and it was by this that the $5,000,000 were secured which was paid to the state and which it still retains. It was by this means that $1,500,000 of the Dresden bonds secured by a first lien on the west sixty-five miles of the road were paid. A second mortgage for $3,000,000 was made, and the money thus borrowed is alleged, and the answer does not deny the allegation, to have been used in ironing, repairing, and equipping the road. It is plain that this money was advanced on the faith of the legislation of 1868, and this appears on the face of

Murdock v. Woodson, Governor.

the mortgage to the plaintiffs. These mortgages would have been worthless securities if it had been understood that the state still had a lien upon the road for the $7,000,000 and the nine or ten years' interest thereon, and this fact the state must be taken to have known when it received the $5,000,000, which was really the money of the bondholders and not of the company. Five sessions of the general assembly of Missouri met before any steps were taken to question the validity of the transaction in 1868; and it is manifest that that transaction cannot now be overthrown except by sacrificing the interest of men who have in good faith parted with their money on the strength of the legislation, acts, conduct, and acquiescence of the state. Looking back upon the transaction, I cannot say that the agreement to release the security of the state for $5,000,000 should, under the circumstances, and as respects the innocent mortgagees of the company, be held to be such a release as was forbidden by the constitution. The state had released or waived its first lien on the North Missouri railroad, receiving no consideration therefor, and agreed to take a second lien. This was at or about the time the constitutional convention was in session, and undoubtedly it was such a transaction that was in the contemplation of the convention and the people when they adopted the provision prohibiting the state from releasing its lien on any railroad. It was not intended to prohibit the release of a lien for full value; and of such value the legislature was left to be the judge, and with its judgment the people of the state must be content. It is urged by counsel that this view makes the constitutional provisions of little value, since it leaves it in the power of the legislature to sacrifice the interests of the people by corrupt or injudicious bargains, and the court is appealed to to prevent the sacrifice which, it is claimed, the act of 1868 decreed. But we have only to deal with the question

Murdock v. Woodson, Governor.

of legislative power; and the legislature, as the representative of the state as a mortgagee, and as the representative of her other interests, has full power except so far as restrained by the constitution. If it had been thought that the legislature could not have been trusted with the sale or disposition of the state's interest as to the amount to be received, undoubtedly additional restraints would have been imposed.

The state was not disabled from releasing its security on receiving full value for it, and of its value it was left by the constitution to be the judge-so left because there was nothing to restrain it.

I feel quite clear in the conviction that the equities of the bondholders under the plaintiffs' mortgage are superior to those of the state, and on this ground (reserving all questions of rights as between the company and the state), and on the ground that in case of controversy as to priority of lien, the priority ought to be settled before an irredeemable sale is made, I award a temporary injunction; but with leave to defendant to move to dissolve it before Mr. Justice MILLER and myself, should he be present at the September term of the court in St. Louis, or before Judge KREKEL and myself at the regular term at Jefferson city. Meanwhile, the issues may be made up and proofs taken under the rules.

NOTE.-Provision of constitution requiring subject to be expressed in title of legislative act: State v. Miller, 45 Mo. 495; State v. Lafayette County Court, 41 Mo. 39; The People v. Hills, 35 N. Y. 44; The People v. The Commissioners of Highways, 53 Barb. 70; Chiles, et al. v. Monroe, 4 Met. 72; Dillon Munic. Corp. sec. 28, and cases cited; Cooley, Const. Lim. 81, 141, and cases cited.

The New York constitution of 1846 (sec. 4, art. 7) contained the following provision: "The claims of the state against any incorporated company, to pay the interest and redeem the principal of the stock of the state loaned or advanced to such company, shall be fairly enforced,

Judson v. Macon County.

and not released or compromised." In the case of Darby v. Wright (3 Blatchf. 170) this provision was construed, and subsequent legislation, authorizing, on certain conditions, a railroad company to issue its bonds to relay the road and complete certain improvements, and providing that such bonds should have priority of lien over the mortgage to the state, was sustained. The opinion of HALL, J., tends to sustain the conclusion reached in the principal case.

JUDSON V. MACON COUNTY.

1. To give the circuit court jurisdiction, the matter in dispute must exceed $500, and the amount in dispute is what is claimed in all the counts in the declaration upon causes of action which are properly joined, and not what is claimed in any one count.

2. There is nothing in the act of June 1, 1872 (17 Stats. at Large, 191, sec. 5), or in the statutes of Missouri, so far as applicable to the circuit court, to change the above rule. Hence a declaration with eleven counts, each count being upon a distinct coupon for $50, shows a case, as to amount, within the jurisdiction of the circuit court.

(Before DILLON and KREKEL, JJ.)

Jurisdiction.-Amount.-Judiciary Act.-Practice Act of June,

1, 1872.

THIS is an action by the plaintiff, a citizen of New York, against Macon county in this state, upon eleven coupons of $50 each. The petition contains eleven counts, that is, a count upon each coupon, and each count asks for judg ment for $50 and interest. The petition concludes as follows: "That the several preceding causes of action amount in all to the sum of $550, for which sum, with interest and damages, the plaintiff asks judgment." To this petition the defendant demurs, on the ground that the amount sued for is below the jurisdiction of the court.