City of Maryville v. Cushman

Decision Date27 May 1952
Docket NumberNo. 43138,43138
PartiesCITY OF MARYVILLE v. CUSHMAN et al.
CourtMissouri Supreme Court

E. L. Bartram, Gene Thompson, Maryville, for appellants.

Harold M. Hull, Maryville, Robert B. Fizzell, Robert B. Fizzell, Jr., Stinson, Mag, Thomson, McEvers & Fizzell, Kansas City, for respondent.

CONKLING, Judge.

This is a proceeding filed by the respondent City of Maryville, Missouri, under Sections 108.310 to 108.350 RSMo 1949, V.A.M.S., for a pro forma decree authorizing the issuance and declaring the validity of $450,000 principal amount of Combined Waterworks and Sewerage System Revenue Bonds of that city. Intervenors (hereinafter called appellants) who are taxpayers, water users and sewer users in Maryville, were permitted to file their intervening petition praying the bonds be held invalid. The decree of the circuit court declared the bonds valid and intervenors then appealed.

This is the first case in this Court which questions the validity of Sections 250.010 to 250.250 of the 1951 Supplement to RSMo 1949, and V.A.M.S. (House Substitute for House Bill 45 of the 66th General Assembly) (and hereinafter called the 1951 Act) and which became effective October 9 1951. Under the 1951 Act any city is authorized to combine its waterworks and sewerage systems, operate them as one combined system, and, if four-sevenths of the voters voting at a special election approve, it may issue its revenue bonds for improvements and additions payable from the revenues to be derived from the operations of such combined system.

The facts are not in dispute. Maryville is a city of the third class and has owned and operated its sewerage system and its waterworks for many years. On January 2, 1952, the city passed Ordinance 2392 prescribing a new schedule of water rates. On the same date, the city passed Ordinance 2393 declaring that for the public health, safety and welfare the city's waterworks and sewerage systems, including all future improvements and extensions thereof, should be operated and maintained as a combined waterworks and sewerage system as authorized in Section 250.020. On the same date, the city passed Ordinance 2394 calling a special election to submit to the voters of the city a proposition to issue and sell the above $450,000 of revenue bonds to defray the cost of improving and extending its combined waterworks and sewerage system. Notice of the election was duly published and at said election the voters of the city approved such proposed issue of revenue bonds by a vote of 1536 to 380. On February 1, 1952, the city's Ordinance 2395 declared the result of the election. On February 26, 1952, the city's Ordinance 2396 fixed the city's rates to be charged and collected for the use of its sewerage system. And on February 26, 1952, pursuant to the 1951 Act, the city passed Ordinance 2397 authorizing the issuance and sale of the above revenue bonds, fixing the details, form and covenants of the bonds, providing for collection and segregation of the revenues, payment of bonds and interest, and setting up reserve and depreciation funds, etc.

The cause was submitted here on briefs without argument and appellants attack the constitutionality of certain of the above noted ordinances and of the 1951 Act upon grounds hereinafter specifically stated and considered. But intervenors do not contend that the city has failed to take any step required by the 1951 Act and do not attack the above election or the result thereof.

Appellants' brief first contends that the 1951 Act, and Ordinance 2397 and the bonds proposed to be issued, violate Section 27 of Article VI of the 1945 Constitution, V.A.M.S., 'because said revenue bonds are being issued for a purpose not authorized by the Constitution.' The State Constitution is a limitation upon the power of the General Assembly. It is not a grant of power to the General Assembly. State ex rel. Randolph County v. Walden, Judge, 357 Mo. 167, 206 S.W.2d 979, Kansas City v. Fishman, 362 Mo. 352, 241 S.W.2d 377. Except as limited by the State and Federal Constitutions the power of the General Assembly to enact legislation is substantially unlimited and absolute. Kansas City v. Fishman, supra, and cases there cited. It is therefore of no consequence that by the 1951 Act the Legislature authorized the issuance of revenue bonds for a purpose not specifically authorized by the State Constitution in Section 27 of Article VI. An identical question was ruled in Kansas City v. Fishman, supra. We conclude here as we did there that Section 27 of Article VI of our Constitution has no application whatever. Appellants ask us to overrule the Fishman case. We decline to do so. There is no reason to depart from the basic principle there re-affirmed.

Appellants next contend the 1951 Act is special legislation and regulates the local affairs of cities in violation of subparagraphs 21 and 22 of Section 40 of Article III of our Constitution by giving new powers to cities electing to issue sewerage revenue bonds; and in this connection appellants also contend the 1951 Act creates a new and separate class of cities in violation of Section 15 of Article VI of our Constitution. To that was cannot agree. Appellants' brief seems to base the above contentions upon their argument that the 1951 Act gives new and added powers to cities electing to issue the above character of revenue bonds which powers are not possessed by cities not issuing such bonds, and cites Owen v. Baer, 154 Mo. 434, 55 S.W. 644.

The 1951 Act is neither local nor special. It does not undertake to regulate the local affairs of cities. It is general and of the widest possible application. It is not limited to cities of any class, description, population or locality. By its terms (Section 250.010) it is applicable to all cities, towns and villages in the State 'whether organized under the general law or by special charter or constitutional charter.' No new class of cities is created. Any city, regardless of class, may be ordinance combine its waterworks and sewerage systems, and extend and improve them in any of the five ways provided in Section 250.040. The 1951 Act is of a type similar to other laws authorizing cities to carry on particular activities in accordance with the provisions of such laws, such as, for example, Sections 71.350 and 71.360, which authorize certain cities to issue revenue bonds to acquire off-street parking facilities. That law was passed in 1947, and was held valid in Kansas City v. Fishman, supra.

In Owen v. Baer, supra, this Court considered a statute which authorized certain cities to issue special tax bills in payment of work for special sewer districts. In that case there was a concurrence only in the result reached. And in Hall v. City of Sedalia, 232 Mo. 344, 134 S.W. 650, 651, this court considered a statute which provided a scheme of sewer construction for third class cities and refused to follow Owen v. Baer, supra, and held that the proposition discussed by the Court in Owen v. Baer 'is still an open question in this state.' In Hall v. City of Sedalia, supra, we held the 'possession of the power does not depend upon its exercise; it depends upon the general law, which is in force equally upon all cities of the class, whether or not it is invoked.'

By the 1951 Act no election is necessary to apply the act to any city in the State, and any city may meet the cost of constructing, improving or extending its combined waterworks and sewerage system in the manner provided in Section 250.040. Under the 1951 Act neither the city nor its voters do anything to adopt or accept the Act, and it does not create any new class of cities. Under the power given by the 1951 Act to all cities, the voters of the city merely vote upon whether a particular type of bond shall be issued to finance a certain improvement. These contentions are overruled.

Appellants next contend that the instant revenue bonds now proposed to be issued by respondent city constitute an indebtedness of the city within the meaning of Section 26 of Article VI of our Constitution. We are not so persuaded. Examination of Ordinance 2397, of the proposed bonds in the light of the 1951 Act discloses that the principal and interest of the revenue bonds are payable solely from the revenues to be derived by the city from the operation of the combined waterwords and sewerage system, and the bonds on their face are payable solely as specified in Section 250.090. The taxing power of the municipality is not pledged and it is specified that the bonds shall not be general obligation of the city within the constitutional provision. We have many times ruled that bonds payable solely from the revenues of a municipal utility, service or facility, and not from taxation, are not a general municipal indebtedness within the Constitution. City of Springfield v. Monday, 353 Mo. 981, 185 S.W.2d 788; City of Lebanon v. Schneider, 349 Mo. 712, 163 S.W.2d 588; Woodmansee v. Kansas City, 346 Mo. 919, 144 S.W.2d 137; Grossman v. Public Water Supply Dist. No. 1, 339 Mo. 344, 96 S.W.2d 701; State ex rel. City of Hannibal v. Smith, 335 Mo. 825, 74 S.W.2d 367; State ex rel. Smith v. City of Neosho, 203 Mo. 40, 101 S.W. 99; and Kansas City v. Fishman, supra.

That the revenues of the city's existing waterworks and sewerage system are pledged to pay the instant revenue bonds does not convert such bonds into a general city indebtedness. The contrary results. The existing waterworks and sewerage systems are now combined and are a single system. The revenues thereof are pledged as a single combined system. But only the revenue (and not the property) of the combined system is pledged. And revenues of an existing system may be so pledged. Grossman v. Public Water Supply District No. 1, supra. See also the Woodmansee and City of Lebanon cases, cited supra, and Poole v. City of Kankakee, 1950, 406 Ill. 521, 94 N.E.2d 416. The 1951 Act does not...

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