City of Austin v. Valle

• Decision Date: 26 November 1902
• Parties: CITY OF AUSTIN v. VALLE.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Court of Appeals

71 S.W. 414

CITY OF AUSTIN v. VALLE.^*

Court of Civil Appeals of Texas.

November 26, 1902.

Appeal from district court, Travis county; F. G. Morris, Judge.

Action by Jules F. Valle against the city of Austin. Judgment for plaintiff, and defendant appeals. Affirmed.

V. L. Brooks, for appellant. Gardner Ruggles, for appellee.

STREETMAN, J.

Appellee sued to recover of appellant, the city of Austin, the interest on certain bonds of said city. The case was tried upon an agreed statement of facts. We do not deem it necessary to set out the facts at length, but refer to and adopt the agreed statement in the record. A special answer was filed by appellant, presenting the facts relied upon as a defense. The lower court sustained an exception to this answer, and upon the agreed statement of facts the court rendered judgment for the full amount claimed by appellee. The special answer of appellant, and the evidence as agreed upon, in so far as necessary to present the questions raised, showed the following facts: Under its charter, the mayor and city council of the city of Austin are authorized to levy and collect ad valorem taxes as follows: (1) Not exceeding 1 per cent. "for the current expenses and for the general improvement of the city." (2) They are authorized to raise money on the credit of the city for a definite and special purpose, by issuing bonds or otherwise. The bonded debt of the city cannot be extended beyond one hundred and twenty-five thousand dollars, except "by a special act of the legislature, or by the consent of two-thirds of the taxpaying citizens, voting at an election ordered for the purpose." The amount of taxes which may be levied for this purpose is not definitely fixed, except as it may be controlled by the amount fixed for other purposes and the constitutional limitation upon the total levy for all purposes. In August, 1880, the city, under the provisions of the general law, assumed charge of its public schools, and became authorized to levy a special tax for school purposes. The tax levied for this purpose has never, in fact, exceeded 33 1/3 cents, although it may be inferred from the record that the council might have levied as much as 50 cents for this purpose. The constitution (article 11, § 5) provides: "Cities having more than ten thousand inhabitants may levy, assess and collect such taxes as may be authorized by law, but no tax for any purpose shall ever be lawful, for any one year which shall exceed two and one-half per cent. of the taxable property of said city; and no debt shall ever be created by any city unless at the same time provision be made to assess and collect annually a sufficient sum to pay the interest thereon and create a sinking fund of at least two per cent. thereon." Under these provisions of the constitution and the charter of the city, appellee contends that the city might have levied a tax of more than 1 per cent. to pay interest and create a sinking fund on its bonded indebtedness, provided that this 1 per cent., together with the taxes actually levied for other purposes, did not exceed 2½ per cent. Appellant contends that the authority to levy 1 per cent. for current expenses and general improvements, and one-half of 1 per cent. for school purposes, has the effect to prevent a levy of more than 1 per cent. for interest and sinking fund on bonds, although the city may not have levied the full amount of 1½ per cent. for general and school purposes. In view of our conclusion upon the other questions raised, we do not find it necessary to decide this question, but we may assume, for the purposes of this case, that the city had no authority to levy and collect a tax of more than 1 per cent. to pay interest and create a sinking fund for its bonded debt. On May 5, 1890, an election was legally held to determine whether two-thirds of the taxpaying citizens of Austin would consent to the issuance of one million four hundred thousand dollars of bonds, to bear interest at rate of 5 per cent. per annum. More than two-thirds of said citizens voted in favor of said proposition, and the result was declared by a resolution of the city council on the same date. On July 21, 1890, an ordinance was passed, entitled "An ordinance to provide for the issuance and sale of the bonds of the city of Austin to the amount of one million four hundred thousand dollars, for the purpose of erecting a system of waterworks and furnishing light by and to the city of Austin, and to regulate the disbursement of their proceeds." This ordinance was approved July 23, 1890. It recited the proceedings with reference to the election, and directed the issue of 1,400 bonds of $1,000 each, to bear date on the 1st day of August, 1890. It also provided: "That the said bonds shall be sold and negotiated by the mayor, under the direction of the city council, at such times and in such amounts as may be needed for the prompt and efficient erection of a system of waterworks and light for the city of Austin." It also provided that for the year 1890, and for each year thereafter, so long as the...