State v. Gordon

• Decision Date: 09 March 1909
• Citation: 217 Mo. 103,116 S.W. 1099
• Parties: STATE ex rel. CITY OF CARTHAGE v. GORDON, State Auditor.
• Court: Missouri Supreme Court

116 S.W. 1099

217 Mo. 103

STATE ex rel. CITY OF CARTHAGE v. GORDON, State Auditor.

Supreme Court of Missouri.

March 9, 1909.

1. MUNICIPAL CORPORATIONS (§ 867)—INCURRING INDEBTEDNESS—SUBMISSION TO POPULAR VOTE.

Since Rev. St. 1899, § 6351 (Ann. St. 1906, p. 3185), requires only 15 days' previous notice of an election on a proposition to increase the indebtedness of a city, by publication in a newspaper that part of an ordinance requiring the posting of notices of the election in addition to the publication was unauthorized, and compliance therewith was not necessary.

2. MUNICIPAL CORPORATIONS (§ 867)—INCURRING INDEBTEDNESS—SUBMISSION TO POPULAR VOTE.

Under Rev. St. 1899, § 6353 (Ann. St. 1906, p. 3186), providing that, on the result of an election carrying a proposition to increase the indebtedness of a city being certified to the council, it may by ordinance cause bonds to be issued for such debt with interest not exceeding 8 per cent. per annum, a published notice of an election, reciting that the bonds were to bear a rate of interest "not exceeding 5 per cent. per annum," was valid, though the ordinance providing for the election required the notice to specify the rate of interest.

3. MUNICIPAL CORPORATIONS (§ 919)—INDEBTEDNESS— BONDS—TERM.

Under Rev. St. 1899, § 6353, as amended by Laws 1901, p. 83 (Ann. St. 1906, p. 3186), requiring that bonds issued by a city to cover indebtedness shall be payable in not less than 5 nor more than 20 years from the date thereof, "at the option of the city," such option is intended for the benefit of the city and may be waived.

4. MUNICIPAL CORPORATIONS (§ 926)—BONDS —INTEREST.

The city council had authority to change the rate of interest on waterworks bonds whose issuance was provided for at an election held for that purpose, within the statutory restriction as to such rate, and within the proposition voted on, at any time before any of the bonds were sold, since until then no vested interest could be acquired therein.

5. MUNICIPAL CORPORATIONS (§ 919) — INDEBTEDNESS—CONDITIONS PRECEDENT TO INCURRING—PROVISION FOR PAYMENT—CONSTITUTIONAL PROVISIONS.

Under Const. art. 10, § 12a (Ann. St. 1906, p. 291), requiring a city incurring indebtedness for waterworks, etc., to provide for the collection of an annual tax sufficient to pay the interest thereon, and also to constitute a sinking fund for the payment of the principal thereof within 20 years, that a city provided for a levy to pay the "semiannual" interest on waterworks bonds, and the "semiannual" portion of the sinking fund, instead of providing for a levy sufficient to pay the annual interest on the bonds and proportionate part of the sinking fund, did not vitiate the bonds, since such levy may be made at any time.

6. MUNICIPAL CORPORATIONS (§ 865) — INDEBTEDNESS —CONSTITUTIONAL LIMITATIONS — WATERWORKS.

The limitation of municipal indebtedness prescribed by Const. art. 10, §§ 12, 12a (Ann. St. 1906, pp. 287, 291), is not exceeded by waterworks bonds in excess of 5 per cent. of the assessed valuation of the city's taxable property, where the amount of the bonds, together with present indebtedness of the city, does not

exceed the limitation of 10 per cent. of such valuation.

In Banc. Mandamus by the State, on the relation of the City of Carthage, against John P. Gordon, State Auditor. Permanent writ awarded.

Roy A. Hockensmith and Perkins Blair, for relator. Elliott W. Major, Atty. Gen., for respondent.

BURGESS, J.

This is an original proceeding by mandamus to compel the respondent to register waterworks bonds of the relator, the city of Carthage, Mo., in the sum of $220,000, dated April 1, 1908, and bearing interest at the rate of 5 per cent. per annum, payable semiannually on the 1st days of April and October in each year; said bonds to wholly mature within the period of 20 years.

The relator is a city of the third class, having a population of about 12,000, and its present indebtedness, exclusive of the bond issue in controversy, is $40,534.37. On the 28th day of January, 1907, the city council of said city passed an ordinance, numbered 873, providing for an election to authorize the incurring of an indebtedness of $220,000 to be used for the purpose of erecting a waterworks system, and to authorize the issuance of bonds in that amount to bear a rate of interest not exceeding 5 per cent., and the levy of a tax to pay the interest thereon, and to constitute a sinking fund for the payment of the principal; said bonds to be payable in 20 years from date, with option of the city to pay specified amounts in 5, 10, and 15 years. Section 5 of said ordinance provided that the mayor give at least 15 days' notice of said election, and the proposition to be submitted thereat, by proclamation, to be published in the paper doing the city printing, and by notices posted in three public places in each ward of the city, specifying the amount of the debt, the length of time for which said bonds should run, the rate of interest, the object and purpose thereof, the day on which said election should be held, and the place of holding the same. In due time a proclamation was issued by the mayor giving notice of the election, and it was published in the Carthage Evening Press, which was then doing the city printing; but no notice or proclamation was posted in any of the wards of the city, although such was provided for by said ordinance. Said published notice recited that the bonds were to bear "a rate of interest not exceeding 5 per cent. per annum, payable semiannually"; but it did not recite the fact that an ordinance authorizing the election had theretofore been passed. The election was held March 12, 1907, in accordance with said notice, and the proposition submitted was favored by more than two-thirds of the votes cast. On July 22, 1907, the city council passed an ordinance (No. 909) authorizing and directing the execution of $220,000 waterworks bonds bearing interest at the rate of 4½ per cent. per annum, payable semiannually, providing for a levy of taxes sufficient to pay the interest and to provide a sinking fund for the payment of the bonds; and on the same day another ordinance was passed providing for a tax levy of 75 cents on each $100 assessed valuation, for the purpose of providing for the interest and the sinking fund. Thereafter, on December 24, 1907, the council adopted, and the mayor approved and signed, the following resolution: "On motion it was ordered that the collection of tax for payment of interest and principal of waterworks bonds be stopped, and that repayment be made to such persons as have paid such tax of the amount paid thereof, for the reason that said bonds have not been sold and issued." On February 24, 1908, an ordinance was passed amending the original ordinance (No. 873), which amendment directed the issuance of $220,000 bonds bearing date April 1, 1908, said bonds to bear interest at the rate of 5 per cent. per annum, payable semiannually; and on July 27, 1908, the council adopted another amendment, providing for a tax levy sufficient to meet the payment of the interest at the increased rate of 5 per cent. and also the sinking fund. On August 7, 1908, the council passed a general levy ordinance (No. 1018), section 5 of which provided for a levy of 40 cents on each $100 assessed valuation, for the purpose of creating a sinking fund and paying the semiannual interest on said bonds; but again, on September 18, 1908, said city council adopted resolution No. 222, directing that said levy be not enforced, for the reason that said bonds had not been sold.

The bonds were issued under date April 1, 1908, and thereafter, in November, 1908, they were presented to the State Auditor, for registration, who refused to register them. In his return the respondent, as grounds for his refusal to register the bonds, assigns the following: First. Because no notices of the election were posted in the various wards of the city of Carthage, although the ordinance authorizing the election specifically prescribed that such notices be so posted. Second. Because the notice published in the newspaper did not specify the rate of interest that the bonds should bear, but instead provided that the interest should be "a rate of interest not exceeding 5 per cent. per annum, payable semiannually," although the ordinance specifically required that the rate of interest should be specified. Third. Because neither the ordinance, proclamation, nor notice designated the newspaper in which the notice should be published, nor did the notice recite that an ordinance authorizing the special election had been theretofore enacted. Fourth. Because no provision was made at any time for the collection of an annual tax sufficient to pay the interest on the indebtedness as it falls due and to constitute a sinking fund for the payment of the principal, although section 12, art. 10, of the Constitution (Ann. St. 1906, p. 287), specifically requires same. Fifth. Because relator had practically abandoned the issue of the bonds before presenting same to be registered, and because the delay in so presenting same to respondent was unreasonable and cannot now be said to represent or declare the will of the voters. Sixth. Because the assessed valuation of the taxable property of relator was at the time of the election $3,306,934, and by reason thereaf relator was authorized by the Constitution to issue bonds in an amount not exceeding $171,507.55; whereas, the amount of this issue is $220,000.

In its petition the relator states that the assessed valuation of the taxable property of the city, in the year 1906, for the taxes of 1907, was $3,306,934, and that the assessed valuation in 1907, for the taxes of 1908, was $3,430,051. Relator filed its motion in this cause for judgment on the pleadings, notwithstanding the respondent's return, and insists that, although section 5 of ordinance No. 873 provides for notice not only by publication in...