Beard v. City of Hopkinsville

• Decision Date: 23 January 1894
• Citation: 24 S.W. 872,95 Ky. 239
• Parties: BEARD et al. v. CITY OF HOPKINSVILLE et al.
• Court: Kentucky Court of Appeals

24 S.W. 872

95 Ky. 239

BEARD et al. v. CITY OF HOPKINSVILLE et al.

Court of Appeals of Kentucky.

January 23, 1894

Appeal from circuit court, Christian county.

"To be officially reported."

Action by D. R. Beard and others against the city of Hopkinsville and others to have a contract declared void. Judgment was entered in favor of defendants, and plaintiffs appeal. Reversed.

J. I Landes, Petree & Downer, C. H. Bush, Joe McCarroll, E. P Campbell, and J. T. Hanbery, for appellants.

Wood &amp Bell and Jas. Breathitt, for appellees.

HAZELRIGG J.

On June 13, 1892, the appellee, through its board of councilmen entered into a contract with its coappellee John P. Martin, by the terms of which the latter agreed to construct and maintain in and near the city a system of waterworks and sewerage, and also an electric-light plant. For the use of 70 hydrants for 5 years, and of 35 arc lights for the same period, the city agreed to pay Martin, as rent, the sum of $5,500 per year. At the expiration of the 5 years the contract for water rental was to continue 15 years longer, at $4,500 per year, the city having an option to renew the contract for lights at $1,000 per annum. The city contained a population of more than 3,000, and less than 8,000, and therefore would be a city of the fourth class whenever the assignment and classification should be made of the cities and towns of the state as required by the constitution. This assignment or classification had not been made at the date of the contract or institution of this action. The indebtedness of the city was something like $125,000, due, mainly, in 5-30 bonds to the Ohio Valley Railway Company. The value of the taxable property for 1891 was $1,546,380. It is shown that with a tax rate of 75 cents on the $100, together with the usual collections from other fixed sources, the city could pay its annual current expenses of all kinds, and also the additional water and light rental proposed in the contract, and still have an annual surplus of several thousand dollars. Immediately after this contract was made, the appellants, who are citizens and taxpayers of the city, instituted this action to have the contract declared void, contending that the city of Hopkinsville, or its board of councilmen, had no constitutional power to make the contract, because it bound the city to pay an indebtedness shown to be in excess of the limitation imposed on the city and its authorities by the constitution. There were other contentions which are not necessary to notice. The chancellor determined all the points made against the plaintiffs below, upheld the contract, and dismissed the petition. This appeal involves the correctness of that judgment.

The constitutional provision supposed to affect the question involved is as follows: "Sec. 158. The respective cities, towns, counties, taxing districts and municipalities shall not be authorized or permitted to incur indebtedness to an amount, including existing indebtedness, in the aggregate exceeding the following named maximum percentages on the value of the taxable property therein, to be estimated by the assessment next before the last assessment previous to the incurring of the indebtedness, viz.: *** cities and towns of the fourth class, five per centum. *** Provided, any city, town, etc., may contract an indebtedness in excess of such limitations when the same has been authorized under laws in force prior to the adoption of this constitution, or when necessary for the completion of and payment for a public improvement undertaken and not completed and paid for at the time of the adoption of this constitution. ***" "Sec. 166. All acts of incorporation of cities and towns heretofore granted, and all amendments thereto, except as provided in section one hundred and sixty-seven, shall continue in force under this constitution, and all city and police courts established in any city or town shall remain, with their present powers and jurisdictions, until such time as the general assembly shall provide by general laws for the government of towns and cities and the officers and courts thereof; but not longer than four years from and after the first day of January, one thousand eight hundred and ninety-one, within which time the general assembly shall provide by general laws for the government of towns and cities, and the officers and courts thereof as provided in this constitution."

By their contention the appellants mean that the indebtedness of the city at the time of the contract was in excess of 5 per centum on its taxable property, which is the limit prescribed by the 158th section of the constitution for cities of the fourth class; and Hopkinsville is alleged to be a city of the fourth class, by reason of its population being 3,000 or more, and less than 8,000. In order to apply this limit of 5 per centum, counsel for the appellants plead as a fact that the population of the city was such as required its assignment and classification among cities of the fourth class. It is not contended, as we understand the argument that the actual assignment-the mere form of classification-directed by the constitution to be made by the general assembly can be made by the courts, but that it was the evident intention of the framers of the constitution to have the wholesome limitations provided for in the section to apply instantly upon its adoption; that the assignment or classification was a mere form, and its delay should not entitle the cities desiring to do so to overreach the plain provisions of the constitution, and deliberately incur an unauthorized indebtedness. Notwithstanding the fact that some difficulty may seemingly arise in ascertaining what maximum percentage on the value of the taxable property in a given city is to be applied in determining what limitation on its indebtedness shall control in the absence of the classification, yet we are constrained to the conclusion that not to apply the section as one affecting and controlling the cities of the commonwealth, immediately upon the adoption of the constituting, would be in clear defiance of the determined will of the body framing the instrument. No one idea stands out more clearly than that barriers should be erected against the creation of municipal indebtedness. In times of...