City of Albuquerque v. Water Supply Co.

• Decision Date: 10 July 1918
• Docket Number: No. 2236.,2236.
• Parties: CITY OF ALBUQUERQUEv.WATER SUPPLY CO.
• Court: New Mexico Supreme Court

24 N.M. 368

174 P. 217

CITY OF ALBUQUERQUE

v.WATER SUPPLY CO.

No. 2236.

Supreme Court of New Mexico.

July 10, 1918.

Syllabus by the Court.

A submission by a city council to the voters of such city of a proposition to issue bonds in a stated amount for the purchase or erection of a system of waterworks for such city is not a double proposition, and does not fall within the rule announced in the case of Lanigan v. Gallup, 17 N. M. 627, 131 Pac. 997. Such a proposition is to be construed, in substance, as a proposition to acquire a waterworks system, either by purchase or construction.

Section 3717, Code 1915, which requires that the notice of election for the purpose of voting upon a bond issue for the purpose of providing funds for the purchase or erection of a system of waterworks, shall be published “at least once a week for four consecutive weeks immediately prior to said election.” Held, that a notice of election published once a week for four consecutive weeks, the last insertion being 13 days prior to the election, substantially complies with the statute.

Where an election is held under authority of an order of the proper authorities, and in the main conforms to the requirements of the statute, though wanting in some particular not essential to the power to hold such an election, and is acquiesced in by the people and approved by their agent, such irregularities do not render the bonds thus issued void.

Mere irregularity in connection with an election in the case of the notice will not of itself invalidate the election, but it must further be shown that, if the statute had been strictly complied with, the results would have been different.

Section 3719, Code 1915, requires publication of a notice of sale of the bonds issued by a municipality for the purpose of providing funds for the purchase or erection of a system of waterworks, to be at least once each week for four consecutive weeks immediately prior to the date of opening the bid. Held, that such statute is substantially complied with, although the last insertion of the notice is 11 days prior to the sale of the bonds.

The government of a municipality is a continuing one, and, while the personnel of officers change, the office itself continues, and an act initiated by one individual as a city officer for and on behalf of the city may be completed by his successor in office. Held, that bonds properly signed by officers of a city, who were such officers at the date of signing the bonds, were not rendered invalid by reason of the fact that the sale of the bonds was not concluded by such officers, but by their successors in office.

Chapter 74 of the Laws of 1915, which requires the approval of the state tax commission to a proposed increase of the rate of taxation of a municipality, where such rate amounts to more than 5 per cent. in excess of the amount raised by tax levies within such municipality during the preceding year, has no application to levies made for the purpose of providing funds for the payment of the principal and interest on bonded indebtedness. Hence it was not necessary for the city of Albuquerque to secure the approval of the state tax commission to the tax proposed to be laid for the purpose of providing for the payment of the principal and interest on bonds issued to purchase a waterworks system.

Section 3624, Code 1915, requires the mayor of a city to indorse the word “Approved” on a resolution, ordinance, or other legislative action of the city council and to sign the same. Held, that the word “Approved,” followed by a blank line for the purpose of writing therein the date of the approval, and signed by the mayor, complied with the statute in this regard.

A municipal corporation, created under an unconstitutional charter, is a de facto corporation, and its officers are de facto officers. The existence of the corporation, and its right to make contracts and transact business as such corporation, cannot be raised collaterally. The existence of such municipality can only be questioned by the state in a direct proceeding instituted by the Attorney General for that purpose, and until the question is thus raised, and an adjudication had ousting the corporation from exercise of the franchise, all acts done and contracts made by the officers of such a de facto municipality are as valid and binding upon it and the property within its limits as though such officers were de jure officers of a de jure corporation. For this reason it is unnecessary to determine the constitutionality of chapter 86, Laws 1917, under which the present charter of the city of Albuquerque was framed.

[Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, De Facto Corporation; De Facto Officer.]

Incorporated cities, towns, and villages in the state of New Mexico have authority to purchase waterworks systems for the purpose of supplying water to the inhabitants of such city, town, or village.

Appeal from District Court, Bernalillo County; Raynolds, Judge.

Suit by the City of Albuquerque against the Water Supply Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Under Code 1915, § 3716, incorporated cities, towns, and villages in the state of New Mexico have authority to purchase waterworks systems for the purpose of supplying water to the inhabitants of such city, town, or village.

Alonzo B. McMillen, of Albuquerque, for appellant.

W. A. Keleher, of Albuquerque, for appellee.

ROBERTS, J.

This suit was instituted in the court below by appellee against the appellant to compel appellant to accept $400,000 of bonds of the city of Albuquerque in payment for its pumping station, water mains, and certain other property used in connection with supplying the inhabitants of the city of Albuquerque with water. The refusal on the part of the appellant to accept the bonds and complete the contract hereinafter referred to was based solely upon objections raised to the validity of the bonds. This action was instituted by the city to compel appellant to comply with its contracts of sale and to accept the bonds in question in payment of the purchase price of the waterworks system.

The facts, briefly stated, are as follows: Proceedings for the issuance of $400,000 of bonds of the city of Albuquerque for the purpose of purchasing or erecting a system for supplying water to the city of Albuquerque and its inhabitants were initiated in February, 1916, and the bonds were authorized by vote of such qualified electors of the city of Albuquerque as had a property tax in said city during the preceding year, on April 4, 1916. On May 21, 1917, the appellant Water Supply Company, a corporation, which had theretofore owned and been operating a waterworks system for the city of Albuquerque, under a franchise, and the city of Albuquerque, through its common council, entered into a contract by which the Water Company agreed to sell, and the city agreed to buy, certain property of the Water Company described in said contract. The Water Company, on its part, agreed to accept the fair and reasonable cash value of said property as a going concern, to be determined by three disinterested expert engineers, trained in the valuation of public utilities such as the Water Supply Company, one to be chosen by the Water Company, one to be chosen by the city, and one to be chosen by the Chief Justice of the Supreme Court of New Mexico, the award of a majority of said arbitrators to be taken as the value of said property, and to be binding upon the parties, their successors and assigns; but it was provided, however, that the city should not be bound to purchase said property if the valuation fixed by the arbitrators should exceed the sum of $400,000. The arbitrators were chosen in the manner provided by the contract, and fixed the valuation of said property at the sum of $453,591. Prior to the contract in question, to wit, on April 4, 1916, there had been submitted to the qualified electors of the city who had paid a property tax in said city during the preceding year, as stated, the question of the issuance of $400,000 of bonds of the city for the purpose of purchasing or erecting a system for supplying water. After the report filed by the arbitrators, the Water Company offered to donate to the city so much of the valuation as was in excess of $400,000 and to accept from the city the sum of $400,000 in full payment of such contract.

Thereupon a second contract was entered into by which the city and Water Company made a final contract, the former to buy and the latter to sell the property of the Water Company to the city for the sum of $400,000, and to deliver a deed for the property upon the payment of that sum; and it was further agreed that, at the designated time and place for the sale by the city of Albuquerque of the $400,000 bonds, the proceeds of which were to be used to finance the purchase by the city, the Water Supply Company would bid par and accrued interest to date of delivery for such bond issue, and carry out in good faith the obligation thereby incurred, in the event said bid should be accepted by the city. There were other matters in said contract not important in the consideration of the issues involved in this suit. The bonds were offered for sale on the 17th day of December, 1917, at which time the Water Company bid par and accrued interest for the same. There was no equal or higher bid for such bonds.

The complaint in the present suit set out the contract above referred to, and there was filed with the complaint a complete transcript of the proceedings for the issuance of said bonds. The appellant filed its answer, setting out in detail the legal objections urged against the validity of said bonds, and alleged its readiness to accept the same and convey said property, provided said bonds were adjudged to be legally issued and binding obligations upon the part of the city of Albuquerque. The bonds in question were...