Borner v. City of Prescott

• Decision Date: 04 June 1912
• Citation: 136 N.W. 552,150 Wis. 197
• Parties: BORNER v. CITY OF PRESCOTT ET AL.
• Court: Wisconsin Supreme Court

150 Wis. 197

136 N.W. 552

BORNER

v.CITY OF PRESCOTT ET AL.

Supreme Court of Wisconsin.

June 4, 1912.

Appeal from Circuit Court, Pierce County; James O'Neil, Judge.

Taxpayer's action by J. F. Borner against the City of Prescott and others to restrain the issuance of bonds by the city. From a judgment for defendants, plaintiff appeals. Modified and affirmed.

The issues as to facts were determined thus: All facts exist affording plaintiff, suing as he did, legal capacity to maintain the action, if the proposed bonds would be illegal, and defendants are proper parties.

September 6, 1910, the common council of defendant city passed an ordinance purporting to authorize issuance of the bonds in question; such ordinance containing recitals showing that they would not exceed the city's legal capacity to incur indebtedness, and providing, in terms or effect, as follows: “The city of Prescott shall issue $17,350, of municipal bonds to defray the cost of constructing water works and connecting sewers in such city, pursuant to chapter 235 of the Laws of the state of Wisconsin for the year 1907. The bonds shall be in denominations of one thousand dollars or five hundred dollars, except one of three hundred and fifty dollars; each shall be dated December 15th, 1910, made payable December 15th, 1930, and bear interest at four and one-half per cent. per annum, payable annually, both principal and interest payable at the office of the city treasurer. There is hereby levied on all taxable property in the city of Prescott thirty-two thousand nine hundred and sixty-five dollars of which seventeen thousand three hundred and fifty dollars is for payment of the principal of said bonds and the balance for payment of the interest thereon. Said total sum shall be collected, sixteen hundred and forty-eight and 25/100 each year, commencing with 1911, to and inclusive of 1930. The amount collected each year over and above sufficient for the interest as the same falls due shall constitute a sinking fund to be conserved and devoted to paying the principal of the bonds at maturity.”

Pursuant to such ordinance the city of Prescott, acting by its proper officers, advertised for bids for said bonds and in due course accepted the offer of H. T. Holtze & Co. therefor, the same to be dated and made payable according to the ordinance and to contain a provision giving the city the option to take up $3,000 thereof in 3 years from date, $4,350 in 10 years from date, and $5,000 in 15 years from date, and $5,000 in 20 years from date.

Up to the commencement of the action the city officers proposed issuing the bonds in accordance with said accepted offer. Thereafter the option feature was withdrawn by the bidder and such officers abandoned the idea of selling bonds otherwise than in conformity to the ordinance and laws of the state in respect to the matter.

The complaint contained allegations in conformity to the findings as to the status of things at the time the action was commenced.

As conclusions of law the trial court held that the complaint failed to state a cause of action; that defendant city, by virtue of the ordinance providing as indicated in the findings, possessed authority to issue the bonds on the offer of H. T. Holtze & Co. with the option feature thereof; and that the action should be dismissed with costs. Judgment was rendered accordingly.White & Skogmo and W. C. Owen, for appellant.

Jesse S. Field and Spencer Haven, for respondents.

MARSHALL, J. (after stating the facts as above).

The respondent had power under section 925--133, Stats. 1898, as amended by chapter 235, Laws of 1907, to issue municipal bonds for constructing water works and sewers. The language thereof necessary to be examined is, as follows:

“All such bonds issued shall be payable at the option of the city in annual installments, the last installment being payable not more than twenty years after their date, and shall bear interest not exceeding six per cent. per annum payable semi-annually, and that the council shall have provided for the collection of a direct annual tax sufficient to pay the interest thereon as it falls due and to pay and discharge the principal thereof within twenty years from the date of the issue of such bonds.”

[1] The main question is, Does the ordinance and proceedings to adopt it satisfy such section? The language of the law, it must be confessed, is not free from ambiguity. However, the purpose is plain. It was to enable municipalities to obtain, without unduly burdening tax payers, means for making public improvements, on favorable terms. It must be liberally construed to that end by a very familiar rule. Any meaning which would render it absurd, difficult to comply with, or impair the character of the securities in the judgment of investors, is to be rejected in favor of a contrary meaning, if the language reasonably expresses both meanings. None should be given thereto, if it can reasonably be avoided, which would violate the plain purpose.

In certain cases, under certain conditions, including the present instance, an ordinance authorizing issuance of bonds under such section does not require a vote of the electors.

[2] The vote by the council was, as indicated in the ordinance, to issue bonds “to defray the cost of constructing water works and connecting sewers.” It is said that includes a double purpose and one act of voting, which counsel insist was unqualifiedly condemned in Neacy v. City of Milwaukee, 142 Wis. 590, 126 N. W. 8. Not so, the question there was different from the one here. There was a distinct double purpose. Bonds could be legally issued but for one of them. The proposition embodying the two was submitted and acted upon by the electors as a single matter. In such circumstances, it was held, that the illegitimate purpose might have been the controlling one in securing the favorable vote; so, it could not be seen whether the electors would have decided in favor of the bonds for the legitimate purpose, by itself, or not.

Here, as indicated, if it be conceded there was a double purpose, both were within the statute. Whether, in such a case, submission of the matter to the council by a single proposition would satisfy the statute, we need not decide. Certainly it would not be within the condemnation of Neacy v. Milwaukee, supra. Furthermore, the fact that here the vote was by the common council, not the electors, might make a difference.

But it is considered the purpose, as the council understood the matter was not, necessarily, double. If it was improper to include two matters in a single proposition, it must be presumed the council did not so intend, if a legal intent can be reasonably read out of the language used. It is fair to assume, from such language, that there was a single scheme requiring connecting sewers as a part of it. That the two elements were so treated as one, can be fairly seen in the ordinance. That being so, it would hardly do to hold the connecting sewers, necessarily, involved a purpose distinct from the water works for the purpose of condemning the action of the common council as void, unless the contrary would be highly unreasonable from any viewpoint.

[3] The next proposition is, that the ordinance does not “provide for the collecting of a direct annual tax sufficient to pay the interest” on the bonds “as it falls due and discharge the principal thereof within twenty years from the date of the issue of such bonds.” That was incorporated into the statute to comply with the language of section 3, art. 11, of the Constitution, adopted in 1874. The wording thereof is this:

“Any county, city, town, village or school district, or other municipal corporation,...