Bannock County v. Bunting

• Decision Date: 01 June 1894
• Citation: 37 P. 277,4 Idaho 156
• Parties: BANNOCK COUNTY v. BUNTING
• Court: Idaho Supreme Court

37 P. 277

4 Idaho 156

BANNOCK COUNTY v. BUNTING

Supreme Court of Idaho

June 1, 1894

SECTION 3602 OF THE REVISED STATUTES CONSTRUED-ISSUING OF BONDS BY COUNTIES.-Counties may issue bonds to take up both warrant and bonded indebtedness under section 3602 of the Revised Statutes of Idaho, when authorized so to do by a vote of two-thirds of the electors of the county voting at an election to be held for that purpose.

PREREQUISITE FOR A BOND ISSUE-MUST BE SUBMITTED TO VOTE OF PEOPLE.-The submission of the question to a vote of the people of the county is an indispensable prerequisite to the incurring of any indebtedness or liability for any purpose, exceeding in that year the income and revenue provided for it for such year, except for the ordinary and necessary expenses of the county.

WARRANT FOR $4,000 WAS IN EXCESS OF REVENUE FOR THE YEAR-WAS NOT AN ORDINARY AND NECESSARY EXPENSE-WAS IN VIOLATION OF CONSTITUTION.-A warrant issued for purchase of courthouse site at an expense of $4,000 incurred an indebtedness above the revenue of the current year, was not an ordinary and necessary expense, and was issued in violation of the constitutional provision, section 3, article 8.

(Syllabus by the court.)

APPEAL from District Court, Bannock County.

Judgment affirmed. Costs awarded to the defendant.

George M. Parsons, Attorney General, S. C. Winters, and Richard Z Johnson, for Appellant.

This is an action to determine the authority of the board of commissioners of one of the counties of the state to fund its indebtedness under chapter 6 of title 13 of the Civil Code as amended by the act of the state legislature approved March 13, 1891, entitled, "An act to amend section 3602 of chapter 6 of title 13 of the Revised Statutes, relating to the refunding of the bonded indebtedness of counties." Section 15 of article 7 of the constitution requires that the counties shall be put on a cash basis and provides a method of paying the floating indebtedness of a county by taxation which is exclusive and precludes the issuing of funding bonds to pay such indebtedness. The section is addressed to the legislative branch of the government. "The legislature shall provide by law." "It shall provide," are its terms. There are no negative words in the section and it is not self-executing. It is addressed to the legislature and is inoperative until carried into effect by the necessary legislation. Such constitutional provisions, addressed to the legislature for its action, and having no negative words or prohibitions, are not in fact of force until carried into effect by the necessary legislation. (Williams v. Mayor of Detroit, 2 Mich. 560-565; Brown v. Seay, 86 Ala. 122, 5 So. 216.) "They do not displace the law previously in force, though the purpose may be manifest to do away with it by the legislation required." (Cooley's Constitutional Limitations, 6th ed., 98-100; Cooley on Taxation, 326, 327; Holzhauer v. Newport, 94 Ky. 396, 22 S.W. 752; Hills v. Chicago, 60 Ill. 91; Morley v. Thayer, 3 F. 740; County of Erie v. City of Erie, 113 Pa. St. 360, 6 A. 137; French v. Teschemaker, 24 Cal. 518, 541, 542; Ex parte Wall, 48 Cal. 318, 319; Ewing v. Orville Min. Co., 56 Cal. 652-655.) "The prohibition of section 18 of article 11 of the constitution prohibiting any county, city, township, etc., from incurring any indebtedness or liability in any manner or for any purpose, exceeding in any year the income and revenue provided for it for such year, without the assent of two-thirds of the qualified voters refers only to the indebtedness or liability incurred by the act or conduct of the municipal body." (Lewis v. Widber, 99 Cal. 412, 33 P. 1128; Coslim v. Durm, 58 Cal. 581; Welch v. Strother, 74 Cal. 413, 16 P. 22.) "The issue of bonds to redeem outstanding bonds or warrants is not the incurring of an indebtedness, within the limitation of the constitution, and need not therefore be submitted to the electors." (Hotchkiss v. Marion, 12 Mont. 218, 29 P. 821, 823; Blanton v. Board of Commrs., 101 N.C. 535, 8 S.E. 162; Poughkeepsie v. Quintard, 136 N.Y. 275, 32 N.E. 765; Barnum v. Supervisors, 137 N.Y. 179, 33 N.E. 162; Barnard v. Knox County, 37 F. 564, 565.) "The erection of courthouses, jails and bridges is amongst the ordinary political or administrative duties of all counties." (Claiborne Co. v. Brooks, 111 U.S. 406, 4 S.Ct. 489.)

Stewart & Dietrich, for Respondent.

The indebtedness intended to be funded by the bonds in question was all evidence by county warrants. The funding law does not contemplate warrant indebtedness. The original chapter (Civ. Code, tit. 13, c. 6) providing for the redemption of county indebtedness, does not, upon its face, bear any distinction of warrant and bonded indebtedness. But it is significant that two weeks after the legislature gave us this chapter, the same legislature finds it necessary to make provision for warrant indebtedness and enacts section 1415. The two acts were passed by the same legislature, are in pari materia and must be construed together. Section 1415 must be read as a part of chapter 6. (Sutherland on Statutory Construction, sec. 288; Harrison v. State, 22 Md. 468, 85 Am. Dec. 658.) It is a common principle of statutory construction that general and ambiguous terms of an act are limited and explained by its title. (Sutherland on Statutory Construction, secs. 210, 211; Endlich on Interpretation of Statutes, sec. 58.) The amendment repeals the section amended. (Const., art. 3, sec. 18; Billings v. Harvey, 6 Cal. 381.) The provision required by the constitution for their payment not having been made, the bonds in question are invalid. (City of Terrell v. Dessaint, 71 Tex. 770, 9 S.W. 593; Citizens' Bank v. City of Terrell, 78 Tex. 450, 14 S.W. 1003; Bolton v. City of San Antonio (Tex.), 21 S.W. 593; Quaker City Nat. Bank v. Nolan County, 59 F. 668.) The board of commissioners at their regular meeting in April of each year is to make an estimate of the probable expenses of the year and make a levy just sufficient therefor. (Rev. Stats., sec. 1411.) If the estimate prove to be too high and there is surplus revenue, it is set apart for the payment of back warrants; and if too low, the surplus warrants shall be paid out of special fund. This is the constitutional scheme. Nothing can be plainer than the intention that the revenues of each year constitute a fund for the payment of the expenses of that year, and to that effect are the authorities. (Gas Co. v. Brickwedel, 62 Cal. 642; Shaw v. Statler, 74 Cal. 258, 15 P. 833; Schwartz v. Wilson, 75 Cal. 502, 17 P. 449; Lewis v. Widber, 99 Cal. 412, 33 P. 1128.) A warrant drawn thereon is an assignment of so much thereof. An order on the treasury--a warrant--is not an indebtedness when there is money to pay it, or suitable provision has been made. (Sackett v. New Albany, 88 Ind. 473, 45 Am. Rep. 472.) By "indebtedness" in this connection, we mean an agreement of some kind by the city to pay money when no suitable provision has been made for the prompt discharge of the obligation imposed by the agreement. To the same effect are the following cases: Corpus Christi v. Woessner, 58 Tex. 462; City of Terrell v. Dessaint, 71 Tex. 770, 9 S.W. 594; Dively v. City of Cedar Falls, 27 Iowa 232; Dillon on Municipal Corporations, sec. 135.

OPINION

PER CURIAM

Plaintiff is an organized county in the state of Idaho. Defendant is a banking company, organized and incorporated under the laws of the territory of Utah, doing business at the town of Blackfoot, in the said state of Idaho. The county commissioners of Bannock county, for the purpose of funding the indebtedness of said county, determined to issue, and did issue, bonds of said county to the amount of $ 120,000, bearing date January 1, 1894. A copy of one of said bonds, all being of the same tenor and date, is as follows, to wit: "No. 1. $ 500.00. United States of America. State of Idaho County of Bannock. Gold Funding Bond. Know all men by these presents, that the county of Bannock, in the state of Idaho acknowledges itself to owe, and for value received hereby promises to pay, C. Bunting & Co., or bearer, on the first day of January, A. D. 1904, the sum of $ 500, with interest thereon at the rate of seven per cent annum, payable semiannually, on the first day of January and July, as provided by law, and on the presentation and surrender of the annexed coupons as they severally become due. Both principal and interest are payable in gold coin of the United States of America, of the present standard of weight and fineness, at the office of the county treasurer of said county, in the town of Pocatello, Idaho or at the Chase National Bank, New York City, state of New York, at the option of the holder hereof. This bond is one of a series of two hundred and sixty-four bonds of like tenor and date, numbered from 1 to 264, aggregating the sum of $ 120,000, issued for the purpose of funding the principal and interest of certain valid outstanding indebtedness of said county legally contracted subsequent to July 30, 1886, in pursuance of and in conformity with the provisions of an act of the legislative assembly of the territory of Idaho entitled 'An act to amend title 13 of the Revised Statutes by adding thereto chapter 6, concerning the redemption of county indebtedness,' approved January 25, 1887, as amended by the act of the legislature of the said state of Idaho approved March 13, 1891. It is hereby certified that all acts and things required to be done precedent to the issue of this bond have been done and performed as by law required; and that all of the said indebtedness so funded was contracted within the legal limitations and restrictions thereon, and only for the ordinary and necessary expenses authorized by the general...