Appeal
from Circuit Court of Baltimore City; H. Arthur Stump, Judge.
PATTISON
J.
This is
an appeal from an order of circuit court No. 2 of Baltimore
city sustaining the demurrer of the appellees, the mayor and
city council of Baltimore and the board of commissioners of
finance of the city of Baltimore, and dismissing the
appellant's bill of complaint. The facts as alleged in
the bill are substantially as follows:
By
chapter 401 of the Acts of 1906, as amended by chapter 202 of
the Acts of 1908, a paving commission for the city of
Batimore was created, and provision was therein made for the
issuance of city stock to an amount not exceeding $5,000,000
for the purpose of defraying the cost of the work of such
commission.
The
sixth section of the original act, as amended by the act of
1908, contains the following provisions: "That in order
to provide money for the work to be done by said commission
under this act as and when portions of such work are from
time to time being done, the mayor and city council of
Baltimore is hereby authorized to issue the stock of said
corporation to an amount not exceeding $5,000,000, said stock
to be issued from time to time and in such amounts as the
mayor and city council of Baltimore shall by ordinance
prescribe; provided, however, not more than one million of
dollars ($1,000,000) of said stock shall be issued in any one
year, and to be payable at such times and to bear such rate
or rates of interest as the mayor and city council of
Baltimore shall by ordinance provide; said amounts of stock
shall be sold and issued by the commissioners of finance of
the city of Baltimore at the best prices obtainable in their
judgment therefor. *** Appropriations for the cost of said
work, based upon the estimates of said commission, shall be
annually included by the board of estimates, in the usual
way, in the ordinance of estimates; *** but no part of said
stock shall be issued nor any member of said commission
appointed until the ordinance of the mayor and city council
of Baltimore providing for the issuance
thereof shall be submitted to the legal voters of the city of
Baltimore at such time and place as may be fixed by said
ordinance, and be approved by a majority of the votes cast at
such time and place as required by section 7 of article 11 of
the Constitution of Maryland; if issued pursuant to such
approval, the mayor and city council of Baltimore shall levy
in each and every year upon all property liable to taxation
in the city of Baltimore a sum sufficient to pay the interest
accruing on said amount of stock and to create a sinking fund
sufficient, with the aid of any premiums on the sale thereof
to redeem said amounts of stock at their respective dates of
maturity."
In the
ordinance of estimates made for the year 1911, approved
December 2, 1910, under the heading of "Estimates for
New Improvements," was an appropriation of $500,000
appearing therein as follows: "Paving Commission. To be
taken from the five million dollars paving loan contingent
upon the passage of an ordinance of the mayor and city
council of Baltimore and its approval by the legal voters of
Baltimore city, providing for the issuance of said loan as
authorized by chapter 202 of the Acts of 1908. For the costs
and expense in connection with the grading, paving and
curbing and regrading, repaving and recurbing public streets,
avenues, alleys and highways in the city of Baltimore,
including construction work, salaries and other expenditures,
five hundred thousand ($500,000) dollars."
The
mayor and city council, acting under the authority conferred
upon them by the act of 1906, as amended by the act of 1908,
passed an ordinance, known as Ordinance No. 661, which was,
on the 13th day of April, 1911, approved by the mayor. The
ordinance is as follows:
"Section
1. Be it ordained by the mayor and city council of
Baltimore, that the commissioners of finance be, and they
are hereby, authorized and directed to issue the registered
stock of the city to the amount of five millions of
dollars, from time to time as the same may be required for
the purposes hereinbefore named, and that said stock shall
be sold by the commissioners of finance, from time to time
and at such times as shall be requisite, and the proceeds
of the sale of said stock shall be used for the purposes
hereinbefore named and for no other purposes whatever;
provided, that this ordinance shall not go into effect
until it shall be approved by a majority of the votes of
the legal voters of the city of Baltimore cast at the time
and place hereinafter designated.
"Sec.
2. And be it further ordained, that said stock shall be
issued in sums of not less than one hundred dollars ($100)
each, redeemable on the first day of August in the year
1951, and bearing interest at the rate of not more than
four per centum per annum, as may be determined by the
commissioners of finance of Baltimore city, said interest
to be payable semiannually on the first day of February and
August in each and every year."
The
third section provides for the payment of interest upon said
stock, and for the redemption of the stock at maturity. The
fourth section provides for the submission of the ordinance
to the voters of the city for ratification by them, and names
the day upon which the election shall be held. The fifth
section provides for notice and publication of notice of the
election.
The
ordinance, when submitted to the voters of the city for
ratification at the election held May 2, 1911, was approved
by a majority of the votes cast at such election, and
thereafter the mayor nominated the five members, who,
together with himself, were to constitute the paving
commission. The nominations so made by the mayor were
confirmed by the second branch of the city council on the
29th of May, 1911, and thereafter, on the 31st day of May,
1911, an organization of the commission was effected.
In the
ordinance of estimates for the year 1912, an appropriation of
$1,000,000 was made for the purposes above set forth.
The
commission, after its organization, met from time to time,
and at its meeting of December 28, 1911, passed a resolution,
in which, after setting out the appropriation of $500,000 as
contained in the ordinance of estimates, and after alleging
the passage of Ordinance No. 661, its approval by the mayor,
and its ratification by the people at the election of May 2,
1911, and the appointment of the members of the board and its
organization, alleges that the commission "proceeded to
act upon and incur expenses of various kinds to be paid out
of the appropriation by the board of estimates, but said
paving commission had not heretofore formally ratified said
appropriation, although it has repeatedly acted upon it.
Therefore, be it resolved by the paving commission of
Baltimore city, appointed in pursuance of the act of 1906,
chapter 401 and the act of 1908, chapter 202, and the
ordinance of the mayor and city council of Baltimore, passed
and approved April 13, 1911, and its ratification thereof at
the May election, 1911, that the appropriation of five
hundred thousand dollars ($500,000) to be taken out of the
five million dollars ($5,000,000) paving loan provided in the
ordinance of estimates for the year 1911, be, and it is
hereby, ratified and approved by this commission."
At a
meeting of the board of finance, November 14, 1911, it was
decided to offer for sale by sealed bids on Monday, December
4, 1911, $500,000 of this stock of the city (the amount
appropriated in 1910 for the year 1911) to be issued under
the acts of the General Assembly, above mentioned. Thus,
after advertising the stock for sale as determined upon by
them at their meeting of November
14, 1911, the commissioners of finance agreed to sell unto
the Mercantile Trust & Deposit Company, one of the defendants
to these proceedings, the highest bidder therefor, stock to
the amount of $394,200, the same to be delivered to them upon
the payment of the purchase price therefor.
It was
at...
