City of Galveston v. Loonie

• Decision Date: 18 March 1881
• Docket Number: Case No. 1268.
• Citation: 54 Tex. 517
• Parties: THE CITY OF GALVESTON v. P. J. LOONIE.
• Court: Texas Supreme Court

54 Tex. 517

THE CITY OF GALVESTON

v.P. J. LOONIE.

Case No. 1268.

Supreme Court of Texas.

Mar. 18, 1881.

APPEAL from Galveston. Tried below before the Hon. Wm. H. Stewart.

Suit by P. J. Loonie against the city of Galveston, appellant, on one hundred and thirty-five “coupons.” He alleged that in consideration of materials furnished and work and labor performed by him and his assignors under contract with appellant, in and about the erection of its sidewalks, and the filling up of certain of its lots and blocks, the city made, executed and delivered to him and his assignors its sixteen bonds, signed by the mayor and countersigned by its treasurer, and sealed by its corporate seal. That those bonds were authorized by appellant to be issued as and for its obligation to pay for such materials, work and labor, by ordinances passed by it on August 19 and December 3, 1873, entitled respectively: “An ordinance authorizing the issuance and sale of two hundred and fifty thousand dollars of the bonds of the city of Galveston, for the purpose of improving sidewalks, by filling, raising and curbing the same;” and, “An ordinance authorizing the issuance and sale of fifty thousand dollars of the bonds of the city of Galveston, for the purpose of filling up ‘Hitchcock's bayou,’ and for other like sanitary purposes, and to create a fund to pay the interest and principal of the said bonds.”

Appellee further alleged that the bonds, by their terms, bore interest at ten per cent. per annum from their dates, and that at the times of their execution and delivery they had attached thereto a number of coupons for interest, accruing and to accrue thereon, from their dates, respectively, inclusive, which were also executed by appellant and delivered to appellee and his assignors; that the bonds and coupons issued and delivered to his assignors, were, a short time after such issuance, sold and delivered to him for a valuable consideration; and that all of the coupons sued on were due and unpaid, and, at their maturity, had been presented to appellant for payment, and that they had never been detached from the bonds.

It was further alleged that the materials supplied and labor and work performed for appellant by appellee and his assignors, was before the execution and delivery of the bonds and coupons, and that the bonds and coupons, with the exception of a small proportion thereof, bore date and were executed and delivered in the year 1874, the remainder in January, February and March (first day), 1875.

Prayer for judgment “in the full amount of said coupons, with interest, for costs of suit, and for such other and further relief, general and special,” as, in law and equity, the court would award him.

Appellant answered:

First. General demurrer.

Second. Special exceptions as follows:

1. To the allegations of appellee, as to power and authority of appellant to contract for the erection and construction of its sidewalks, and for the filling up, draining or regulating any lot or lots, etc., because said allegations are unauthorized by appellant's charter of May, 1871, and are otherwise unfounded in law.

2. To the allegations as to the power and authority of appellant, under its charter of 1871, to issue its bonds, or other obligations in writing, to pay for materials furnished and work and labor performed, for the construction of sidewalks, and the filling up of low places; because said allegations are not authorized or sanctioned by any provision of said charter….

6. To the allegations which claim of and from appellant payment for work and labor done by appellee and his assignors, because it appears, from the petition, that any claims or accounts for such material, and work and labor, were barred by the statute of limitations.

Third. General denial.

Fourth. Special plea.

2. That appellant had no power and authority under its charter to issue bonds and contract debts for the purpose of erecting sidewalks and the filling up of low places, and that the alleged issuance of bonds by appellant, as set out in said petition, was ultra vires and void, and that appellant was not bound by such unlawful bonds….

4. That if appellant ever became indebted to appellee or his assignors in any sum on account of work and labor done and materials furnished appellant, as set out in said petition, that such indebtedness was barred by the statute of limitations, and no recovery could be had thereon.

Demurrer and exceptions overruled. Judgment for appellee.

R. V. Davidson, for appellant.

I. The petition discloses that appellee and his assignors contracted with appellant for certain purposes, and that such contracts were to be satisfied by the issuance and delivery of the bonds described in said petition. Such contract can, or could not be performed without such bonds being valid; such bonds are invalid, and said contracts to be satisfied therewith are absolutely void, and the court erred in overruling the demurrer. Hitchcock v. Galveston, 2 Woods, 272, 287;Union Pacific R. R. v. Lincoln County, 3 Dill., 300; State v. Swift, 11 Nev., 167.

II. The charter of the city of Galveston of May 16, 1871, nor any other law, gave to appellant, or its officers, any express or implied power to enact said ordinances, or thereunder to issue and deliver said bonds and coupons for the purposes set forth in said petition; and the court erred in overruling said exception, and holding that appellant was bound by such unlawful bonds and coupons. Said charter gave to appellant no power to issue said bonds and coupons, and the alleged issuance and delivery thereof for said alleged objects was in violation of the spirit and letter of said charter. Charter of City of Galveston, May 16, 1871, title 10, art. 30; Id., title 4, art. 3, secs. 2, 3, 8; Id., title 8, art. 8, sec. 1; Id., titles 5 and 6, entitled ““Taxation” and the “Collection of Taxes;” Cooley's Const. Lim., 3d ed., pp. 194-196; 1 Dill on Mun. Corp., pp. 173-176; Id., sec. 393; Id., secs. 610, 653, 654; Williams v. Davidson, 43 Tex., 1-34;Pye v. Peterson 45 Tex., 312-315;City of Bryan v. Page, 51 Tex., 532 536; Hitchcock v. City of Galveston, 2 Woods' U. S. C. C., 272-287; S. C., 3 Woods' U. S. C. C., 269-272; Police Jury v. Britton, 15 Wall. (U. S.), 566-573; Mayor v. Ray, 19 Wall. (U. S.), 468-475; Gause v. City of Clarksville (opinion by Dillon, J.), 1879, ““The Reporter,” p. 519; Galveston v. Hitchcock, 96 U. S. (6 Otto), 341-353;Rogers v. Burlington, 3 Wall., 666;Seybert v. Pittsburg, 1 Wall., 272; Buchanan v. City of Litchfield (U. S. S. C.), October Term, 1880; Chicago Legal News, December 18, 1880; Heard v. Providence Ins. Co., 2 Cranch, 169, affirmed; Rogers v. Burlington, dissenting opinion, Field, J., 3 Wall., pp. 668-669; Dillon on Municipal Bonds, 9-15; Middleton v. Alleghany Co., 37 Penn. St., 237; Hackettstown v. Swackhamer, 37 N. J. Law, 191; Burnes v. Mayor and Council of Atchison, 2 Kansas, 488, 489; Lippincott v. Pana, 92 Ill., 54; Middleport v. Ætna Life Ins. Co., 82 Ill., 662;Lucas, Turner & Co. v. San Francisco, 7 Cal., 463;Annapolis v. Harwood, 32 Md., 480;Rupert v. Baltimore, 23 Md., 193; Tarrfield v. Radcliff, 20 Iowa, 396; Lake v. Williamsburg, 4 Denio, 520;McCullough v. Mayor of Brooklyn, 23 Wend., 458; Rhinelander v. Mayor, 21 How. Pr., 304; Matter of Turfler, 44 Barb., 46; Baldwin v. Oswego, 1 Abb., 62; New Albany v. Sweeny, 13 Ind., 245; Roeck v. Newark, 33 N. J. Law, 129; Bateman v. Mid. Wales R. R. Co., Common Law Reports (1st Common Pleas), 499.

F. Charles Hume, for appellee.

I. It appearing from the petition, that, according to its contracts, appellant promised to pay for the work done by appellee and his assignors at dates subsequent to the completion of the work, and to pay semi-annual interest on the amount of the debt until its maturity, and evidenced said promise by executing the bonds described and the coupons sued on after the work contracted for had been fully completed and accepted, appellee's right of action for the indebtedness so evidenced was not barred in either two or four years; and limitation would not begin to run against it until the maturity of the bonds to which said coupons were attached. De Cordova v. Galveston, 4 Tex., 482 (referring with approval to 19 Vt., 467;City v. Lamson, 9 Wall., 483-4; City of Lexington v. Butler, 14 Wall., 296-7;Clark v. Iowa City, 20 Wall., 589; Green's Brice's Ultra Vires, 2d Am. ed., 271; Clemons on Corp. Secur., 65; Ferry v. Ferry, 2 Cush., 99).

II. The court did not err in rendering judgment for the amount of the coupons, that is, for the sums shown to be due on the face of the coupons, and interest at eight per cent. on such sums. Pasch. Dig., art. 3940; Rev. Civ. St., art. 2976; San Antonio v. Lane, 32 Tex., 415 (overruled in 34 Tex., 49, but not on this point); Cromwell v. Sac Co., 6 Otto, 60-2;Aurora City v. West, 7 Wall., 105;Gelpeke v. Dubuque, 1 Wall., 178, 206;Hollingsworth v. Detroit, 3 McLean, 472; 2 Daniels' Neg. Inst., § 1513; Green's Brice's Ultra Vires, 2d Am. ed., 270; North Penn. R. R. Co. v. Adams, 54 Penn. St., 94; Mills v. Town of Jefferson, 20 Wis., 56; Va. v. C. & O. Canal Co., 32 Md., 504; Nat. Ex. Bank v. Hart., Pr. & T. R. Co., 8 R. I., 875; Cond. Mut. L. Ins. Co. v. C., C. & C. R. R. Co., 41 Barb., 9.

III. Conceding that appellee's right of action is solely on the bonds and coupons, I affirm that these are valid obligations and justify the judgment appealed from. Charter of 1871, secs. 2, 3, 4, 8 of art. 3, title 4; sec. 1, art. 10, title 3; sec. 1 of art. 8, title 8; sec. 1 of art. 1, title 8. This proposition is, in effect, conceded even by Judge Dillon, in a case much relied on by appellant: Cause v. City of Clarksville (5 Dillon), 7 Reporter, 521-2. Sec. 1 of art. 2, title 8; secs. 36, 47, 53 of art. 3, title 4; sec. 1 of art. 1, title 1; compare sec. 2 of art. 3, title 4, with sec. 28 of act of August 2, 1876, present charter; and in same connection, as to rule of interpretation, see ...