City and County of Denver v. Hallett

• Decision Date: 03 July 1905
• Citation: 83 P. 1066,34 Colo. 393
• Parties: CITY AND COUNTY OF DENVER et al. v. HALLETT.
• Court: Colorado Supreme Court

83 P. 1066

34 Colo. 393

CITY AND COUNTY OF DENVER et al. v. HALLETT.

Supreme Court of Colorado, En Banc.

July 3, 1905

On Rehearing, November 6, 1905.

Appeal from District Court, City and County of Denver; Booth M Malone, Judge.

Action by Moses Hallett, executor of the will of George W. Clayton deceased, against the city and county of Denver and others to restrain the issuance of certain bonds. From a judgment for plaintiff, defendants appeal. Affirmed.

The Chief Justice and Campbell and Maxwell, JJ., dissenting in part.

Henry A. Lindsley and Halstead L. Ritter, for appellants.

Macbeth & May, for appellee.

STEELE J.

The plaintiff alleges: That there was submitted to the taxpaying voters of the city and county of Denver the following question: 'Shall the city and county of Denver issue bonds to an amount not exceeding $400,000, bearing interest at a rate of 4 per cent. per annum, and maturing in not less than 15 years nor more than 30 years, the principal to be payable in equal annual installments, commencing the next year following the issuance of said bonds, for the purpose of erecting a public auditorium, including the purchase of the site therefor, if desired?' That subsequently to the submission of said question, the city council of the city and county of Denver passed an ordinance providing for the issuance of $400,000 in bonds for the purpose of erecting a public auditorium, including the purchase of a site therefor. Section 4 of the ordinance provides that the bonds 'shall be payable at the option of the city and county 15 years after date, and absolutely due and payable 25 years after date. They shall be of the denomination of $1,000, and shall bear interest at the rate of 4 per centum per annum, payable semiannually.' The complaint further alleges that the city and county of Denver has no power or authority to construct or have an auditorium, nor to issue bonds for the payment of the cost thereof, and that the officers of the city and county are about to issue bonds in accordance with the terms of said ordinance, and prays that an injunction issue restraining the city and county, and the officers thereof, from issuing or signing the bonds proposed to be issued, or from entering into any contract for the sale thereof, from acquiring a site for the erection of said auditorium or taking any steps relating thereto. It appears that the plaintiff, in his capacity as executor, is the owner of large tracts of real estate in the city, upon which large taxes are annually paid, which will be subjected to very heavy additional burdens for the payment of the principal and interest of the bonds, if issued. The complaint does not state the result of the vote on the question submitted, but, from the fact that the case is here, we conclude that the vote was in the affirmative. Demurrer to the complaint was overruled. The defendants elected to stand by the demurrer; judgment was rendered in accordance with the prayer of the complaint; and the defendants appealed to this court.

The judgment of the district court was right. The power to direct the issuance of bonds for the erection of an auditorium was granted by the people when they voted affirmatively upon the question submitted; but the people granted the power to issue bonds 'bearing interest at the rate of 4 per cent. per annum, maturing in not less than 15 nor more than 30 years, the principal to be payable in equal annual installments commencing the next year following the issuance of said bonds,' not bonds 'payable at the option of the city and county 15 years after date, and absolutely due and payable 25 years after date.' The people vested in the city council the discretion of determining when, after 15 years and within 30 years from their date, all the bonds should mature, but they required that the principal should be made payable in equal annual installments. The bonds authorized by the ordinance are not the bonds authorized by the people; and it follows that the issuance of the bonds under the ordinance was properly enjoined. The city attorney urges that bonds providing for the payment of the principal in equal annual installments are unsalable, and that the will of the people in voting for an auditorium will be overthrown unless bonds such as proposed are held to be in accordance with the question submitted. The city council derives all its powers to issue bonds for an auditorium from the people. The plain, unambiguous mandate was that the bonds, when issued, should be payable in equal annual installments. If the bonds then authorized cannot be sold, we know of no authority that can direct the issuance of another and different character of bond.

It is also said that the charter requires a sinking fund to meet the bonded indebtedness, and that the annual deposit in that fund is the equivalent of payment, and that the bonds are made 'payable in equal annual installments,' when annual deposits in the sinking fund are made. The word 'payable,' in this connection, is not susceptible of any such construction. 'Payable in equal annual installments' means that an equal amount of each bond or of the whole debt shall become due each year; that the payment thereof shall become legally enforceable against the city; that it is the right of the city to make annual payments of the principal, and the duty of the holders of the bonds to accept such payment. The words are in daily use by the English-speaking people and need no interpretation, and to construe them as meaning that the city may place annually in its sinking fund an amount to meet the obligations at maturity would be without justification.

In holding, as we do, that the bonds proposed are not the bonds directed by the people to be issued, we have determined the case, and might well refuse to decide the other questions involved. But, inasmuch as the power of the city to erect a public auditorium is challenged, and the question is of public moment and concern, and as much time and expense will be saved by a determination of this, the main question, we are constrained by the force of the public interests to give our opinion upon this subject.

This court, in passing upon the authority of the city of Leadville to license certain occupations, said (Bernheimer v. City of Leadville, 14 Colo. 520, 24 P. 332): It is a well-settled elementary principle that the charter of a municipal corporation, or, if organized under a general law, that such general law, is the instrumentality by means of which the Legislature of the state delegates to the municipal body the right to exercise such franchise, and such legislative power and authority, as may be essential to the safety, well-being and prosperity of the community. It is equally well settled that the charter or the law by which the municipal body is created is to be strictly construed, and that no powers are to be exercised except those which are expressly conferred, or which exist by necessary implication. This principle of law is expressed with extraordinary clearness in 1 Dill. Mun. Corp. 389: 'It is a general and understood proposition of law that a municipal corporation possesses and can exercise the following powers, and no others: First, those granted in express words; second, those necessarily or fairly implied in, or incident to, the powers expressly granted; third, those essential to the declared objects and purposes of the corporation--not simply convenient, but indispensable. Any fair, reasonable, doubt concerning the existence of power is resolved by the court against the corporation, and the power is denied. Of every municipal corporation the charter or statute by which it is created is its organic act. Neither the corporation nor its officers can do any act, or make any contract, or incur any liability, not authorized thereby. All acts beyond the scope of the powers granted are void." And upon the authority of this case counsel contend that the municipality known as the city and county of Denver has no power to build an auditorium, because power to do so is not conferred by the twentieth article of the Constitution; because power to do so is not incident to, nor can it be fairly implied from, the powers expressly conferred; because an auditorium is not essential to the declared objects and purposes of the municipality. We agree with counsel that no power to build an auditorium is expressly granted by the twentieth article; that such power is not incident to the powers expressly conferred, nor can it be necessarily or fairly implied therefrom; and that an auditorium is not indispensable to the objects and purposes of the municipality as declared in the twentieth article. But we do not agree with him that the stinted grant of power contained in section 1 and other parts of the article is the only power possessed by Denver. It seems very clear that the statement contained in the first section was not intended to be an enumeration of powers conferred, but simply the expression of a few of the more prominent powers which municipal corporations are frequently granted. The purpose of the twentieth article was to grant home rule to Denver and the other municipalities of the state, and it was intended to enlarge the powers beyond those usually granted by the Legislature; and so it was declared in the article that, until the adoption of a new charter by the people, the charter as it then existed should be the charter of the municipality; and, further, that the people of Denver shall always have the exclusive power of making, altering, revising, or amending their charter; and, further, that the charter, when adopted by the people, should be the organic law of the municipality and should supersede all other charters. It was intended to confer not only the...