Allison v. City of Chester

• Decision Date: 09 September 1911
• Citation: 72 S.E. 472,69 W.Va. 533
• Parties: ALLISON et al. v. CITY OF CHESTER et al.
• Court: West Virginia Supreme Court

72 S.E. 472

69 W.Va. 533

ALLISON et al. v. CITY OF CHESTER et al.

Supreme Court of Appeals of West Virginia.

September 9, 1911

Submitted June 12, 1911.

Syllabus by the Court.

A contract of a municipal corporation, with a water works company, for a supply of water for public use, for a stipulated number of years, at a stipulated price per year payable in quarter annual payments, is not void, by section 8, article 10, of the Constitution (Code 1906, p. lxxix) limiting municipal indebtedness, because the aggregate of such payments, for the full term of the contract, with existing indebtedness, exceeds the amount for which such municipality, is by said section, allowed to become indebted. The validity of such contract is tested by the aggregate of the quarterly payments for the first year.

Appeal from Circuit Court, Hancock County.

Bill by Charles F. Allison and others against the City of Chester and others. Decree for defendants, and plaintiffs appeal. Affirmed.

J. B Sommerville, for appellants.

Hubbard & Hubbard, Billingsley & Clark, and W. B. Moore, for appellee South Side Water Works Co.

MILLER J.

The decree appealed from, dissolving the preliminary injunction and dismissing plaintiffs' bill, presents for decision a single question, a question of constitutional limitation.

Amendatory of a prior ordinance of November 20, 1903, the Council of the City of Chester, on November 4, 1909, adopted an ordinance reciting the passage of the former ordinance by which it had contracted with the South Side Water Works Company for a supply of water for extinguishing fires, and for other purposes, and since which time the growth of the city had been such as to require the laying of a more extensive system of water mains than originally contemplated and provided for and that further extensions would be required from time to time, and that the making of such extensions and additions as was and would be required, and was proposed, to meet the new and continually increasing demands, the Water Works Company would be required to expend a large amount of money; and furthermore reciting that in order to justify said company in making such expenditures, and to enable it to secure the funds necessary to extend and enlarge its plant as desired, and proposed, it was then ordained as follows:

"Section 1. That said contract entered into by said ordinance of November 20, 1903, and the acceptance thereof by the South Side Water Works Company, be altered so that said Company shall, for a period of 30 years, supply fire hydrants and water to said city for extinguishing fires and for other purposes, and the said city shall during the said period pay for the same at the rate and upon the conditions following, to-wit:

"(1) Said Water Works Company shall maintain the fire hydrants already in place in said city and connected with said Company's mains, and said Company shall also furnish, install and maintain at such points on said Company's mains as may be designated by Council such additional fire hydrants as Council may from time to time require. Hydrants which may be installed shall be of the same pattern or equal efficiency with those already in use, and no hydrant once installed or maintained under this contract shall be discontinued during the term thereof.

"(2) Said Water Works Company shall at all times during the term of this contract, except in case of accident to machinery or mains, or when making connections, furnish water at all of said fire hydrants at such pressure and in volume as m ay be reasonably required for fire protection.

"(3) Said Water Works Company shall furnish, erect on its mains and supply with necessary water, free from all charges to the city, such iron drinking troughs for horses as Council may approve, not to exceed four in number, which troughs shall be maintained

and kept in good repair by Council during the term of this contract.

"(4) The city shall have the right to use water from said fire hydrants for extinguishing fires, and to a reasonable extent for sprinkling and cleaning streets or fire department practice.

"(5) The City of Chester, in consideration of the foregoing stipulations on the part of the Water Works Company, agrees to pay said Company at the rate of Forty-Five Dollars ($45.00) during the term of this contract for each fire hydrant now maintained or hereafter installed under order of the Council up to and including fifty in number. Water for flushing sewers shall be paid for at the rate of ten cents per thousand gallons. Payments hereunder shall be made quarterly by the city in full for all service rendered by the Water Works Company during the preceding quarter."

Section 8, article 10, of the Constitution (Code 1906, p. lxxix) provides: "No county, city, school district, or municipal corporation, except in cases where such corporations have already authorized their bonds to be issued, shall hereafter be allowed to become indebted, in any manner, or for any purpose, to an amount, including existing indebtedness, in the aggregate, exceeding five per centum on the value of the taxable property therein to be ascertained by the last assessment for State and county taxes, previous to the incurring of such indebtedness; nor without, at the same time, providing for the collection of a direct annual tax, sufficient to pay, annually, the interest on such debt, and the principal thereof, within, and not exceeding thirty-four years; Provided, That no debt shall be contracted under this section, unless all questions connected with the same, shall have been first submitted to a vote of the people, and have received three-fifths of all the votes cast for and against the same."

It is conceded that the annual payments provided for in the contract can be paid each year out of the current revenues of the city, but that the aggregate of such payments cannot be so met, and that if such aggregate constitutes an indebtedness within the meaning of the Constitution the contract is void; for it is also conceded that the questions connected with the making of the contract had not prior to entering into the same been first submitted to the vote of the people, as required by the provisions of the organic law.

The sole question, presented for decision then, is, should the aggregate of all the quarter annual payments provided for in the contract be treated as an indebtedness of the City of Chester, within the meaning of the constitutional inhibition, or only that portion thereof which were thereby to become due the first year?

It is well settled in this, and in other states having like or similar constitutional provisions, that municipalities may not become indebted absolutely or contingently beyond the constitutional limitation, for present delivery of property or for services performed, or to be performed, as in the building of water works, or any other kind of municipal improvements, even though the time of payment be postponed to future dates, no matter what may be the form of the contract. Our own cases of List v. Wheeling, 7 W. Va, 501; Spilman v. Parkersburg, 35 W.Va. 605, 14 S.E. 279; Honaker v. Board of Education, 42 W.Va. 170, 24 S.E. 544, 32 L.R.A. 413, 57 Am.St.Rep. 847; Shinn v. Board of Education, 39 W.Va. 497, 20 S.E. 604; Dempsey v. Board of Education, 40 W.Va. 99, 20 S.E. 811; Camden Clay Co. v. New...