Carr v. Fenstermacher
| Decision Date | 10 December 1929 |
| Docket Number | 26706 |
| Citation | 228 N.W. 114,119 Neb. 172 |
| Parties | STANLEY V. CARR ET AL., APPELLANTS, v. CLARK H. FENSTERMACHER ET AL., APPELLEES |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Custer county: BRUNO O HOSTETLER, JUDGE. Affirmed.
AFFIRMED.
Syllabus by the Court.
Where the legislature grants a municipal power and prescribes exclusive methods of exercising it, the municipality must follow those methods.
A grant of power to a city may imply a means of exercising it in addition to statutory methods without restriction as to others.
In cities of the second class the cost of a municipal lighting utility may be defrayed by means of a tax levy and, if insufficient for that purpose, by a bond issue. Comp. St 1922, § 4397.
Where a city of the second class has on hand sufficient available money to pay the purchase price of a municipal lighting utility, resort to a tax levy or to a bond issue for that purpose may be unnecessary, such methods, though authorized by statute, not being exclusive.
The word " may" in the statute authorizing a city of the second class to defray the cost of a municipal lighting plant by means of a tax levy or a bond issue does not necessarily mean " shall" or exclude other methods.
Contracts beyond the power of a municipality are such as it cannot lawfully enter into for any purpose.
Power of a city to install and maintain a municipal lighting plant by means of a tax levy or a bond issue may, for such purposes, imply power to make a cash payment from funds already on hand and to pay the remainder of the purchase price out of net earnings of the plant, the two methods first mentioned not being exclusive.
In a city charter a provision requiring an appropriation in advance of incurring an indebtedness may not apply to a conditional obligation payable alone out of funds on hand and net earnings of a municipal lighting plant.
Failure of a city engineer to state a definite amount as the estimated cost of particularly described equipment for a municipal lighting utility, instead of " costs not to exceed" a particular sum named, held a mere irregularity not invalidating a subsequent contract of purchase.
In a notice to bidders, failure of a city to state the hour for closing and opening bids as provided by statute, instead of requiring bids " on or before" a specific date named, held not to invalidate a subsequent contract of purchase, where the information necessary to proper bidding was given and one bid only was submitted.
The duty of a city to fix reasonable rates for electricity furnished to consumers through a municipal lighting plant held not violated by a contract to purchase necessary equipment for it and to pay a portion of the purchase price out of its net earnings, where the contracting parties agreed that such earnings should be based alone on lawful charges.
Appeal from District Court, Custer County; Hostetler, Judge.
Suit by Stanley W. Carr and another against Clark H. Fenstermacher and others. From a decree of dismissal, plaintiffs appeal. Affirmed.
Squires, Johnson & Johnson and Sullivan & Wilson, for appellants.
Dressler & Neely and Perry, Van Pelt & Marti and N. T. Gadd, contra.
Paul E. Boslaugh, Thomas J. Keenan and Grady Corbitt, amici curiae.
OPINION
This is a suit in equity to decree the invalidity of an ordinance authorizing the city of Sargent to buy a Diesel engine and other equipment for the improvement of an electric light and power plant already in operation and to enjoin the municipal officers and the seller of the equipment from performing a contract of purchase into which they entered. Plaintiffs are Stanley V. Carr and Edward Williams, who plead that they are resident taxpayers and users of electricity furnished by means of the plant; that the city was without power to enact the ordinance or to enter into the contract of purchase; that the municipal officers did not follow the statutory methods of procedure; and that the ordinance and contract of purchase are void. In the petition the ordinance, the contract, and other facts upon which plaintiffs rely for an injunction are pleaded at great length. Regularity of the municipal proceedings, validity of the contract of purchase and other grounds of defense are fully pleaded in the answer of defendants. Upon a trial of the issues the district court dismissed the suit and plaintiffs appealed.
The validity of the contract is vigorously assailed on the ground that the only legal way to purchase the equipment was to raise the necessary funds by taxation or by means of a bond issue authorized by a vote of the people, neither step having been taken. Those methods are authorized by the city charter and it is argued that they are exclusive. Comp. St. 1922 secs. 4396-4399. The city was operating an electric light and power plant at the time the Diesel engine was purchased. The new equipment was procured in the following manner: The council enacted and the mayor approved an ordinance declaring the old equipment to be inadequate, authorizing the purchase, directing notice for bids, and providing for payment of the purchase price out of the net receipts from the operation of the plant and not out of any funds raised by taxation, notice to bidders so specifying. The ordinance provided further that the unpaid indebtedness incurred should be evidenced by conditional warrants payable out of the net receipts from the operation of the plant and that the warrants should not be general obligations of the city nor payable by taxation. The notice to bidders described the Diesel engine and the other necessary equipment desired and recited that the city engineer's estimate of the cost would be approximately $ 16,500. Fairbanks, Morse & Company, defendant, made the only bid--$ 15,435. It was accepted. From funds on hand the city paid $ 3,000 and for the remainder, or $ 12,435, issued conditional warrants payable only from net earnings of the plant. The contract of purchase and the conditional warrants conformed generally to the terms of the ordinance. The sellers of the new equipment reserved the right to retain title thereto pending nonpayment of any part of the purchase price. The decree denying...
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