Archer v. City of Indianapolis

• Decision Date: 17 November 1954
• Docket Number: No. 29197,29197
• Parties: Ralph ARCHER, Jr., for himself and on behalf of all other persons similarly situated, Appellant, v. CITY OF INDIANAPOLIS, INDIANA, acting for and on behalf of the Indianapolis Sanitary District; C. T. Drayer, Marvin J. Brezette, and Louis J. Rybolt, as and constituting the Board of Sanitary Commissioners of the Department of Public Sanitation of the City of Indianapolis, Indiana; Alex M. Clark, as Mayor of the City of Indianapolis, Indiana; John R. Barney, as the City Controller of the City of Indianapolis, Indiana; Appellees.
• Court: Indiana Supreme Court

Page 607

122 N.E.2d 607

233 Ind. 640

Ralph ARCHER, Jr., for himself and on behalf of all other persons similarly situated, Appellant, v. CITY OF INDIANAPOLIS, INDIANA, acting for and on behalf of the Indianapolis Sanitary District C. T. Drayer, Marvin J. Brezette, and Louis J. Rybolt, as and constituting the Board of Sanitary Commissioners of the Department of Public Sanitation of the City of Indianapolis, Indiana Alex M. Clark, as Mayor of the City of Indianapolis, Indiana John R. Barney, as the City Controller of the City of Indianapolis, Indiana; Appellees.

No. 29197.

Supreme Court of Indiana.

Nov. 17, 1954.

Walter Myers, Jr., Indianapolis, for appellant.

John D. Raikos, Harry T. Ice & Robert D. Risch, Palmer K. Ward, Frank X. Haupt, Indianapolis (Ross, McCord, Ice & Miller, Indianapolis, of counsel), for appellees.

DRAPER, Judge.

The appellant taxpayer, acting for himself and on behalf of all persons similarly situated, brought this action against the appellees ¹ to enjoin the Indianapolis Sanitary District from issuing and selling the bonds of said Sanitary District in the amount of $8,750,000, and to enjoin a tax levy by said Sanitary District for the payment of said bonds.

The trial court found for the appellees. Appellant's motion for new trial, which asserts the illegality of the decision, was overruled, and this appeal followed.

The facts, which were stipulated, are not in dispute. It is agreed that the rapid increase in the population of the city of Indianapolis in the last several years has created an urgent need for increased sanitation facilities of all kinds. If issued and sold, the bonds whose validity is here questioned would provide such minimum additions, extensions and improvements to existing facilities as are presently vitally needed in the Indianapolis area, and would enable the city to comply with the requirements of the Stream Pollution Control Board. All necessary legal steps prerequisite to the issuance of these bonds have been taken. The bonds proposed ot be issued by the Sanitary District, together with the bonds previously issued and outstanding, would total an amount in excess of two per cent of the net assessed valuation of taxable property within the Sanitary District, but the total would be less than four per cent thereof.

The question presented may be stated as follows: May the Board of Sanitary Commissioners of the Department of Public Sanitation of the City of Indianapolis issue bonds pursuant to Chapter 157 of the Acts of 1917 as amended and supplemented, Burns' 1950 Repl. § 48-4201 et seq., where such bonds, together with similar bonds previously issued and presently outstanding, would exceed in amount two per cent of the taxable property within the Indianapolis Sanitary District?

The appellant admits there is statutory authority for the issuance of such bonds in an amount not exceeding four per cent of the total assessed valuation of taxable property in said Sanitary District, Acts 1951, ch. 179, § 1, being Burns' 1953 Supp. § 48-4217a, but contends that such statutory authority is in conflict with Art. 13, Sec. 1, of the Constitution of the State of Indiana, which reads as follows:

'No political or municipal corporation in this State shall ever become indebted in any manner or for any purpose to an amount in the aggregate exceeding two per centum on the value of the taxable property within such corporation, to be ascertained by the last assessment for State and county taxes, previous to the incurring of such indebtedness; and all bonds or obligations, in excess of such amount, given by such corporations, shall be void * * *.'

The appellant takes the position that the bonds are a debt of the Sanitary District which District is a political or municipal corporation within the meaning of those terms as used in the constitutional provision above quoted. On the other hand, the appellees assert, first, that in creating the Indianapolis Sanitary District the Legislature intended to and did merely create a special taxing district.

It is axiomatic that a statute is presumptively valid, and should be upheld unless clearly unconstitutional. 'Public statutes are not to be regarded as common enemies, whose speedy extermination is specially committed to the courts.' We state with the assumption that the Legislature would not, in disobedience of the organic law of the state, attempt to confer upon any instrumentality of its creation the right to assume an indebtedness in excess of the constitutional limitation. The power to declare a statute void is to be exercised with the utmost care, and after all doubts as to its constitutionality have been removed.

The Legislature has the power to create additional municipal corporations for proper purposes, City of Indianapolis v. Buckner, Ind.1954, 116 N.E.2d 507, and to create special taxing districts for designated purposes. Department of Public Sanitation of City of Hammond v. Solan, 1951, 229 Ind. 228, 97 N.E.2d 495.

For present purposes, a taxing district may be defined as a new and separate territory within which a special assessment may be levied and collected on an ad valorem basis on the taxable property within the district for the purpose of providing funds to pay for local public improvements (not political or governmental in nature), which improvements have been determined by the Legislature to be of special benefit to the people and property within that territory. Board of Com'rs of Monroe County v. Harrell, 1897, 147 Ind. 500, 46 N.E. 124; Board of Com'rs of Switzerland County v. Reeves, 1897, 148 Ind. 467, 46 N.E. 995; Johnson v. Board of Park Commissioners, 1930, 202 Ind. 282, 174 M.E. 91; Department of Public Sanitation of City of Hammond v. Solan, 1951, 229 Ind. 228, 97 N.E.2d 495, supra.

While this court has said that the name given to an instrumentality created by the Legislature to carry out projects for the protection of the public is of no significance, Edwards v. Housing Authority of City of Muncie, 1939, 215 Ind. 330, 19 N.E.2d 741, and it is true the name so given cannot prevail over the clear import of the other language of the statute, it is also true that we should not ignore the long-established practice of the Legislature in designating a corporation as such by name. Instances of the previous practice of the Legislature in that regard are furnished in the margin. ²

In Johnson v. Board of Park Commissioners, 1930, 202 Ind. 282, at page 289, 174 N.E. 91, at page 94, supra, in holding that a park district did not constitute a political or municipal corporation, this court said:

'The act of 1917 does not provide for the creation of a political or municipal corporation. This law was enacted to confer additional powers upon the department of public parks; to authorize the creation of park districts (see the title to the act). These powers so granted to the board of park commissioners acting as board of commissioners of the park district are intended to be but additional (cumulative). Section 5. The board of commissioners of the park district is not given the power to sue, neither may this board as such, representing an entity separate from the city, be sued. There are no earmarks of a set-up in the act for the organization of a corporation. The act is as it says: 'An act concerning the department of public parks,' etc. The act does not violate Article 13 of the Constitution.'

The legislation here under consideration is somewhat similar. The title states: 'An act concerning the department of public sanitation * * * creating sanitary districts * * *.' In the first section it is said: 'That in addition to the existing executive departments of cities of the first class * * * there is hereby created a department of public sanitation * * *.' In § 5 it is said that: 'Upon taking effect of this act all the territory included * * * shall become and constitute a sanitary district * * * and thereafter said sanitary district, as so constituted, shall be deemed duly established * * *.' In other sections of the act the sanitary district is referred to as a 'special taxing district'. The statute places the District under the control of a Board of Sanitary Commissioners which heads the Department of Public Sanitation of the city of Indianapolis. The three members of the Board of Sanitary Commissioners are appointed by the Mayor of Indianaplis and are subject to removal by the Mayor for neglect of duty or incompetency after hearing. In exercising its powers the Board acts in the name of the city of Indianaplis. It may sue or be sued in the name of the city of Indianapolis. Bonds are issued by the Board in the name of the city of Indianapolis, executed by the Mayor and City Controller and sold by the City Controller. The special tax which is authorized to be levied upon property within the territorial limits of said sanitary district is declared to be and constitutes the amount of benefits resulting to said property. The bonds are payable only out of a special tax levied upon the property in said district, and the special taxes so collected must be kept in a special fund and applied only to the retirement of said bonds. It would not seem from a reading of the law that the Legislature intended to create a separate corporate entity.

In State Board of Tax Com'rs v. State ex rel., 1926, 198 Ind. 343, 153 N.E. 404, 576, this court held that the Sanitary District of Indianapolis was not a separate entity--a distinct municipality. When that case was decided, § 21 of the 1917 Act provided that the power to tax for general maintenance resided in the Common Council of the city. By the Act of 1943, ch. 107, § 4, the power to levy taxes for general expenses was granted to the Board of Sanitary Commissioners, Burns' 1950 Repl. § 48-4221.

The appellant concedes it is probable that the Sanitary District was originally designed to be a special taxing district, but he argues that State Board of Tax Com'rs v. State ex...