Appeal of the City of Erie
| Decision Date | 10 November 1879 |
| Citation | 91 Pa. 398 |
| Parties | Appeal of the City of Erie. |
| Court | Pennsylvania Supreme Court |
Before SHARSWOOD, C. J., MERCUR, GORDON, PAXSON, TRUNKEY and STERRETT, JJ. GREEN, J., absent
Appeal from the Court of Common Pleas of Erie county: Of October and November Term 1879, No. 350. In Equity.
T. A. Lamb, John P. Vincent and J. C. and F. F. Marshall, for appellant.—We contend that the debt proposed is not such a debt as was in contemplation of the framers of the constitution, but that they intended only permanent debts created by loans, and to be paid at some future fixed time, and not to current liabilities to be provided for and paid from year to year or month to month. There are manifestly two kinds of indebtedness which a city may "incur:" one its ordinary current expenses, incurred in the government of the city and in providing for its annual recurring wants and necessities; the other, that permanent kind of indebtedness which is created by borrowing money for public use, which is to be paid at the end of a term of years, and forms no part of the current expenditures of the municipality for the current needs or convenience of its people.
The mischief to be remedied by sect. 8 of art. 9, was the reckless increase of the permanent debts of municipal corporations, created by borrowing money to carry on vast schemes of public improvement by the municipality itself, or to aid others in making improvements, which it was thought, or at least hoped, would benefit the people of the municipality. This disposition had become an evil to be checked, and this constitutional provision was made for that purpose, and such was the declared intention, not to prevent the creation of an annual liability for the carrying out of any purpose within the powers of the municipal government.
The city of Erie has not yet incurred any debt under the contract of August 26th 1879. It is all prospective, and can be provided for by appropriations as required by law, when the proper time comes to do it, viz.: in the annual appropriation for annual liabilities.
E. Camphausen, G. A. Allen and L. Rosenzweig, for appellees. —Debt is a matter of contract, and includes in its meaning all forms of implied or express obligation to pay money in the future, and is the only word that can be used to express all kinds and forms of indebtedness. When it is to be used in its limited sense the word must be qualified by the word temporary, permanent, funded, bonded, and consequently our law-makers have uniformly used these when debt was intended to be used in its limited or restricted sense.
What is an ordinary current expense of a city government? Current expense is an expense for something now in existence; something that has been received by the people and established, and is now running along from year to year. Current expense implies a current revenue or tax to meet the current expense. A new enterprise contracted to be paid for in the future, and requiring a new fund from additional revenue or tax to meet the debt, is not a current ordinary expense, but the creation of a new debt. Erie city has no market-house, and since almost time immemorial has not had any such thing. Such a thing is now no part of her ordinary annual expense, and hence she has no money, revenue or tax to meet such an expense. To accomplish this new enterprise the city has gone in debt, and given her promise to pay so much money, in semi-annual instalments, within twenty-five years, from a stated time.
It is admitted that the present indebtedness of the city of Erie is largely in excess of seven per centum on the assessed valuation of its taxable property, and that by the terms and conditions of the agreement into which the city has entered with those...
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