Baker v. City of Seattle

• Decision Date: 17 July 1891
• Citation: 2 Wash. 576,27 P. 462
• Court: Washington Supreme Court
• Parties: BAKER ET AL. v. CITY OF SEATTLE ET AL.

27 P. 462

2 Wash. 576

BAKER ET AL. v. CITY OF SEATTLE ET AL.

Supreme Court of Washington

July 17, 1891

Appeal from superior court, King county.

Action by A. J. Baker, Fred E. Sander, and James A. Moore against the city of Seattle, Harry White, as mayor of said city, H W. Miller, as clerk of said city, C. W. Ferris, as comptroller of said city, and N.W. Harris & Co., to enjoin the issuance, sale, and delivery of bonds. There was judgment for defendants, and plaintiffs appeal. Affirmed.

A. Battle, for appellants. Orange Jacobs and

Burke, Shepard & Woods, for respondents.

STILES J.

On the 1st day of June, 1891, an election was held in the city of Seattle under the act of March 7, 1891, p. 267, entitled "An act to enable cities and towns to validate certain warrants and other obligations and evidences of indebtedness on the part of such cities and towns, issued by the corporate authorities thereof in excess of their legal authority, and declaring an emergency therefor." The propositions submitted at that election were to validate indebtedness as follows: Class 1: Warrants drawn payable out of the road fund of said city, and dated and issued on sundry days between September 21, 1889, and November 17, 1889, both inclusive, numbered from 3,629 to 4,029, of the year 1889, both inclusive, the face amounts whereof aggregate the sum of $33,279.92. Class 2: Warrants drawn payable out of the road fund of said city, and dated and issued on sundry days between November 18, 1889, and February 25, 1890, both inclusive, numbered from 4,030 to 4,380, of the year 1889, and from 1 to 620 of the year 1890, both inclusive, the face amounts whereof aggregate the sum of $91,567.73. Class 3: Warrants drawn payable out of the road fund of said city, and dated and issued on sundry days between February 26, 1890, and August 2, 1890, both inclusive, numbered from 621 to 2,786 of the year 1890, both inclusive, and the face amounts whereof aggregate the sum of $188,350.20. Class 4: Warrants drawn payable out of the fire fund of the said city, and dated and issued on sundry days between May 3, 1890, and August 16, 1890, both inclusive, numbered from 331 to 598, both inclusive, the face amounts whereof aggregate the sum of $57,781.59. The vote in favor of the validation was very largely in excess of the three-fifths majority required by the act, and the indebtedness covered by it stands validated, unless there are constitutional reasons against it. At the same election there was also submitted the proposition to fund this indebtedness, when validated, by the issuance of bonds in pursuance of the act of March 7, 1891, p. 269, entitled "An act authorizing cities and towns to submit to the voters therein propositions to fund indebtedness of such cities and towns by the issuing of bonds therefor, at the same election at which the previous attempted incurring of such indebtedness, or any part thereof, may be ratified." This latter proposition was also carried by an equally large vote, and the city of Seattle is preparing to issue bonds; and to prevent their issue appellants brought their action to restrain the municipal authorities from proceeding therein. Paragraph 11 of their complaint states the principal grounds of their objection to the bonds, which are as follows: "(1) That at the date of issue of all the warrants proposed to be validated, from warrant No. 4,251, in class 2, dated December 7, 1889, for the sum of $32.87, and payable out of the road fund of said city, its absolute indebtedness, excluding these warrants, was $160,169, which was one per cent. of the taxable property of said city, according to the last previous assessment thereof, August 30, 1889, the assessment having been $16,016,900. (2) That date of issue of all the warrants proposed to be validated, from warrant No. 1,395 in class 3, dated May 3, 1890, for the sum of $36.81, payable out of the road fund of said city, its absolute indebtedness excluding these warrants, was $240,253.50, which was one and one-half per cent. of the taxable property of said city according to the said assessment. (3) That there were outstanding, and not included in the above-mentioned $240,253.50 of absolute indebtedness, or in any of the warrants claimed to have been validated, on the 5th day of May, 1890, certain 'street improvement warrants' issued under and by virtue of section 8, c. 3, of the charter of the city of Seattle, granted by the territorial legislature February 4, 1886, amounting in all to $303,817, and which should be considered as part of the general indebtedness of said city. (4) That prior to May 5, 1890, the city of Seattle had, by virtue of the power conferred upon it by section 5 of chapter 2 of its said charter of 1886, condemned and taken certain lands in said city to widen and extend Front, Second, Commercial, South Second, and South Third streets, and to establish a certain public square at the north-west corner of Front street and Yesler avenue; that, in the course of such condemnation and taking, awards of damages had been allowed against it in the total sum of $247,000, which sum should be considered as a part of the general indebtedness of said city, for the reason that the said city has taken possession of said lands, but has paid no part of the said awards, and has collected less than one per cent. of the same from the property assessed to pay therefor. (5) That at the dates of the issuance of all the warrants in classes 3 and 4, issued after May 5, 1890,-that is to say, beginning with warrant No. 333, for the sum of $450, payable out of the fire fund of said city, and including said warrant, and all warrants dated and issued subsequently thereto, and included in classes 3 and 4,-the absolute indebtedness of said city, if said street improvement warrants and said condemnation awards were a part thereof, exceeded five per cent. of the taxable property of said city, as appeared by the assessment of August 30, 1889, to-wit, $827,833. (6) That there has been no vote of said city to authorize its indebtedness to be increased beyond one and one-half per cent., other than the vote of June 1, 1891." The answer of the city admitted the facts stated in the complaint to be true, but alleged affirmatively: "(1) That by section 5 of the act of February 26, 1890, (Acts 1890, p. 225,) all of the indebtedness of the city of Seattle in excess of one per cent. of the assessment of 1889, and not in excess of one and one-half per cent. thereof, was validated and made legal indebtedness thereof. (2) That on February 26, 1890, the absolute indebtedness of the city of Seattle, including the indebtedness thus legalized, did not reach the limit of one and one-half per cent., nor was that limit reached until April 29, 1890, and after the issuance warrant No. 1,394, on the road fund, for the sum of $1,575, included in class 3. (3) That by the terms of the said street improvement warrants, and under the law governing their issuance, they were not primarily a general liability of the city Seattle, but were chargeable to and payable out of particular funds, to be derived from local assessments. (4) That the said condemnation awards were likewise not a primary or general liability of the city, but were chargeable and payable out of local assessments only." The plaintiff interposed a general demurrer to the answer, upon the argument of which the court sustained it as a demurrer to the complaint, and dismissed the action.

Before proceeding to pass upon the other features of this case we will speak of the two classes of alleged indebtedness which would absorb a very large portion of the city's debt-creating power if they were to be counted as a part of its constitutional liabilities, viz., the street improvement warrants and the condemnation awards.

First. Under the charter of 1886 (Laws Wash. T. 1885-86, p. 241) the city of Seattle had the power to make street improvements either with funds drawn directly from the treasury or by creating local assessment districts upon the property, within which a special levy could be laid to pay for the entire expense. These warrants were the result of proceedings of the latter class. They show upon their face that they are payable out of the "*** street improvement funds, under ordinance No.___." The agreements with the contractors for the work were to the effect that they should be paid "out of a special fund." It is fair to presume that the special funds have been provided by the city in all these cases, and that in due course the money will be realized to pay off the warrants. What might be the liability of the city in case it should fail, neglect, or refuse to collect special taxes in such cases is not for us to say here. It suffices that there is no present liability on the part of the city to pay out of its treasury. In Argenti v. San Francisco, 16 Cal. 256, there was no restriction upon the use of the funds derived from special assessments. It went into the treasury, and its identity was lost; besides which the contract sued upon was general in its terms, obligating the city to pay The case turned upon a question of agency. In Atchison v. Byrnes, 22 Kan. 65, the city failed to make a sufficient assessment, and refused to issue the bonds contracted for. In Craycraft v. Selvage, 10 Bush, 696, the city was held liable only for that portion of the contract which fronted land not subject to assessment. As to other frontage the contractor was relegated to the land. In French v. Burlington, 42 Iowa, 614, there was no intimation that the decision was placed upon any ground other than that the proposed improvement would, under the charter, have to be paid for in part out of the city treasury, the law providing for only a partial assessment upon abutting property. These...