Beers v. City of Watertown

• Citation: 177 N.W. 502,43 S.D. 14
• Decision Date: 16 April 1920
• Docket Number: 4653.
• Parties: BEERS v. CITY OF WATERTOWN et al. [*]
• Court: Supreme Court of South Dakota

177 N.W. 502

43 S.D. 14

BEERS v. CITY OF WATERTOWN et al. ^[*]

No. 4653.

Supreme Court of South Dakota

April 16, 1920

Appeal from Circuit Court, Codington County; W. N. Skinner, Judge.

Action by J. H. Beers, against the City of Watertown and others officers thereof. From order sustaining demurrer to complaint, plaintiff appeals. Reversed, with directions.

Gates and Polley, JJ., dissenting in part.

J. G McFarland, of Watertown, for appellant.

Arthur L. Sherin, of Watertown, for respondents.

WHITING J.

Appeal from an order sustaining a demurrer to a complaint. Defendant city had voted bonds to furnish funds so that its council might provide the city with an electric plant to furnish electricity for municipal, industrial, and domestic purposes and this action was brought to restrain the issuance of such bonds and to restrain such council from appropriating any of the money from these bonds for certain purposes for which it was alleged defendants intended to use same.

Three separate and distinct grounds for enjoining the issuance of the bonds are urged on this appeal: (a) That the question of issuing bonds was not properly submitted to the voters; (b) that the amount voted to be raised and all other funds available are insufficient to carry out the full purpose announced in the notice of election, and the council plan upon using the proceeds derived from sale of the bonds to carry out but one of the purposes contemplated by the voters when voting for the bonds; (c) that a certain contemplated use of a part of the money to be raised by a sale of the bonds is beyond any purpose in the minds of the voters at the time they voted to issue the bonds. We are also called upon to determine whether, if ground "c" should be held insufficient as a ground for enjoining the issuance of the bonds, it yet is a sufficient ground for enjoining the appropriating of any part of the money for the purpose contemplated.

Defendants apparently fail to recognize the fact that all these questions must be determined upon the facts confessed by their demurrer, and not upon any additional facts that may exist. In their brief they have set forth, and apparently ask this court to consider, several facts not alleged in the complaint.

Certainly they must understand that the circuit court, and hence this court, cannot take judicial notice of the very large majority vote cast in favor of the bonds; nor of the fact that the plaintiff was an employé of a corporation financially interested in the defeat of the proposed municipal project; nor of the fact that a situation actually exists, and will exist for several years to come, which might make it unnecessary that the entire electric system be provided at this time; nor of the fact that the defendant city had not incurred debts to the constitutional limit. If defendants believed that the existence of these facts was what justified their contemplated action and rendered same lawful, and were not willing to fairly test the sufficiency of the complaint, they should have alleged such facts by way of answer, and not have demurred to the complaint.

The law then in force (subdivision 2, § 1229, Pol. Code 1903) empowered a city council "to appropriate money to purchase, erect, *** manage and maintain any system or part of a system of lighting for the purpose of providing light, heat and power for municipal, industrial and domestic purposes. ***" The statute authorized the calling of an election to vote on the issuance of bonds to provide the funds for such appropriation. Was the council, under the power thus given, authorized to submit this question in such form as to leave with it the power of exercise its discretion to provide the lighting system either by purchase of an existing system or by the erection of a new one? It did so submit the proposition. The notice of election was as follows:

"A special election will be held *** for the purpose of submitting *** the question whether the city of Watertown shall issue its bonds to an amount, *** said bonds to be issued for the purpose of constructing *** or purchasing a system of electric lighting, for the purpose of providing light, heat, and power for municipal, industrial, and domestic purposes."

Plaintiff contends that there was thus submitted to the electors a dual proposition, and that the question should have been so submitted as to allow the voters to determine whether the council should purchase an existing system or should construct a new one. There is no merit in appellant's position. Of course, the council might have submitted the question in such forms as to have taken from it the power to use the money from bonds voted except for the particular purpose specified in the notice; but it did not take a vote of the people to authorize the council to provide the electric system. If they had had the funds, they could have gone ahead under said subdivision 2 of section 1229, and, exercising their right to choose between purchasing and constructing, have provided such system either by purchase or construction or by both. This discretion given by the statute may, in a particular case, be of great value, and, we must presume, was advisedly given by the legislators. It might well be that a council could best protect the interests of the city and her taxpayers by having and exercising this discretion. There is not a word in our statute from which the inference can be indulged that the Legislature intended, in case bonds were needed, that the electors should do more than determine whether they would provide bonds to supply the fund from which the appropriations might be drawn. There is nothing from which it can be inferred that the Legislature intended, whenever bonds were needed, that then the electors, and not the council, should determine the method that should be used for providing the system. Appellant cites the two cases of Elyria Gas & Water Co. v. City of Elyria, 57 Ohio St. 374, 49 N.E. 335, and Farmers' L. & T. Co. v. City of Sioux Falls (C. C.) 131 F. 890. The first seems to be the leading case, and we find that it is upon the decision therein that the Sioux Falls Case rests. The Sioux Falls Case cites numerous authorities claimed to be in point, but, with one exception, they rest on facts having no analogy to those before us. The exception is the case of City of Leavenworth v. Wilson, 69 Kan. 74, 76 P. 400, 2 Ann. Cas. 367, which, in its facts, seems to be on all fours with the Sioux Falls Case, and which also cites the Elyria Case. In the Elyria Case we find that the statute gave to the council the power to submit the proposition of voting bonds "for the erectionor purchase of waterworks." The resolution of necessity, which also provided for the submission of the question of voting bonds, read that it was "for the purpose of the purchase and erection of waterworks." The court said:

"A resolution declaring the necessity for the issue and sale of municipal bonds for the purchase and erection of waterworks is not a resolution for either purpose separately, but for both purposes combined; nor is a vote in favor of issuing bonds for both purposes a vote in favor of either separately."

It seems clear to us that the submission of the question in the conjunctive in the Elyria Case, when the statute only authorized its submission in the alternative, clearly distinguishes that case from the one before us and from the two above referred to wherein the Elyria Case was cited. These cases were, in their facts, analogous to the case before us, and not analogous to the Elyria Case. In the Sioux Falls Case it was said that:

"The power conferred is in the alternative, but the question, as appears in the ordinance, resolution, and notice of special election, was submitted to the voters in the language of the law in the alternative. It thus results that no voter has had the privilege of voting upon the question as to whether he was in favor or not in favor of issuing bonds in the sum of $210,000 for constructing, equipping, and maintaining a system of waterworks. He might have been in favor of the construction of the waterworks system and

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