Craig v. School City of Gary, 20405

• Decision Date: 24 November 1965
• Docket Number: No. 20405,20405
• Parties: Robert I. CRAIG, Jr., Citizen and a Taxpayer of the City of Gary, Lake County, Indiana, in his own behalf and in behalf of all other taxpayers residing in the City of Gary, Lake County, Indiana, Appellant, v. SCHOOL CITY OF GARY, Indiana, a municipal corporation, Appellee.
• Court: Indiana Appellate Court

Page 616

211 N.E.2d 616

138 Ind.App. 261

Robert I. CRAIG, Jr., Citizen and a Taxpayer of the City of

Gary, Lake County, Indiana, in his own behalf and in behalf

of all other taxpayers residing in the City of Gary, Lake

County, Indiana, Appellant, v. SCHOOL CITY OF GARY, Indiana, a municipal corporation,

Appellee.

No. 20405.

Appellate Court of Indiana, In Banc.

Nov. 24, 1965.

Rehearing Denied Dec. 13, 1965.

Transfer Denied Feb. 2, 1966.

[138 INDAPP 262] Orval W. Anderson, Gary, for appellant.

George F. Sammons, Kentland, William J. Regan, Gary, for appellee.

SMITH, Presiding Justice.

This was an action instituted by the appellant, Robert I. Craig, Jr., a taxpayer of the City of Gary, Indiana, against the appellee, School City of Gary, Indiana, a municipal corporation, to restrain the appellee from proceeding in furtherance of a proposed school bond issue and seeking judgment declaring all proceedings had before the filing of this cause of action to be null and void.

The appellee filed a demurrer to the appellant's complaint which was sustained by the trial court. Upon the appellant's refusal to plead over judgment was entered for the appellee. From this judgment the appellant has appealed assigning as error the sustaining of the demurrer.

In resolving this question we must examine the complaint to determine whether the complaint on its face sets forth a proper cause of action for equitable relief.

It is the contention of the appellee that the trial court properly sustained the demurrer because the appellant had no legal capacity to sue. The appellee maintains, as shown by the memorandum to the demurrer that since the suit was in equity, it was therefore incumbent upon the [138 INDAPP 263] appellant to exhaust all legal remedies; and, since there is a precise statutory remedy for contesting a bond issue which the appellant failed to follow, he has no legal capacity to institute action seeking equitable relief.

There are few better settled rules in the common law than that which requires a litigant to exhaust all legal remedies available, or in the alternate to demonstrate that such legal remedies are inadequate, before he can be heard to complain in a suit in equity.

Burns' Ind.Stat. Sec. 64-1915 provides the statutory procedure by which objections to a bond issue may be raised. The legal remedy is that of remonstrance.

'Ten or more taxpayers in such municipal corporation, other than those who pay poll-tax only, and who will be affected by the proposed issuance of such bonds or other evidences of indebtedness and who may be of the opinion that such bonds or other evidences of indebtedness should not be issued, or that the proposed issue is excessive for the proposed purpose thereof, may file a petition in the office of the county auditor of the county in which such municipal corporation is located, within fifteen days after notice as aforesaid shall have been given that the issuance of such bonds or other evidences of indebtedness shall have been determined upon by such municipal corporation, setting forth their objection thereto and facts showing that the proposed issue is unnecessary, unwise or excessive, as the case may be.'

The appellant has failed to allege any attempt to comply with the above quoted legal remedy as provided by legislative enactment. Instead the appellant maintains that he was excused from joining in a remonstrance by virtue of the fact that in his complaint he has alleged facts which render the statutory remonstrance procedure inadequate.

As a result of these 'facts' the appellant contends that he does have the legal capacity to sue and therefore the trial court was erroneous in sustaining appellee's demurrer.

The allegation of 'facts' that the appellant relies upon in his complaint are, that the bond issue exceeded two percent [138 INDAPP 264] of the assessed value of the taxable property; that the signatures on the petition were improperly obtained and not in conformity with the law; that the petition was not properly filed; that the School Board of the School City of Gary intended to misapply the proceeds of the sale of the bonds; and finally that said School Board failed to show a need for issuance of said bond issue.

In support of his position the appellant has erroneously relied on four Indiana cases: City of Bluffton et al. v. Miller (1904), 33 Ind.App. 521, 70 N.E. 989; Noble et al. v. Davison (1911), 177 Ind. 19, 96 N.E. 325; Hammer v. City of Huntington et al., etc. (1939), 215 Ind. 594, 21 N.E.2d 407; Miller et al. v. City of Evansville (1963), 244 Ind. 1, 189 N.E.2d 823.

In each of these cases an injunction was granted against a municipal corporation to restrain the public officials of the corporation from doing some act. However, the distinguishing characteristic was that in each of these cases there was in existence a completed, consummated, void transaction the facts of which were described in each case in the complaint in exact detail. In the matter before us we have only a partially completed statutory procedure which will give rise to a possible contract, and which statutory procedure provides a method for taxpayers to object by way of a remonstrance.

The School City of Gary had proceeded with the necessary steps to authorize the issuance and sale of bonds for the construction of a school building. No agreement for the sale of bonds has been made. There was no remonstrance. Then some four days before the proposed sale of the bonds the appellant first made objection to the bond issue by filing this cause of action. Instead of an illegal contract as existed in the cases cited by the appellant, we have here only the general allegations of illegality made by one taxpayer in the city of Gary.

The requirements in a complaint to enjoin a municipal corporation are exacting and stringent. In Stutesman v. [138 INDAPP 265] Sigerfoos, Trustee (1924), 82 Ind.App. 600, 145 N.E. 507, this Court held that a mere allegation of non-compliance with a statute is insufficient in a complaint seeking injunction relief. It was further held that the complaint must negate all right and authority to proceed under any other statute. In Flora, Trustee v. Brown (1923), 79 Ind.App. 454, 138 N.E. 767, it was held that the presumption is that public officials are doing their duty, keeping within the law, and the party who challenges the act or acts of a public official must show that the official is not clothed with legal authority to perform the act in question. In Volume 43 C.J.S. Injunctions Sec. 182 p. 854, the rule is thus stated:

'The material and essential facts relied on for relief by injunction must be stated with sufficient certainty to negative every reasonable inference arising on the facts stated, from which it might be deduced that the applicant might not, under other supposable facts connected with the subject matter, be...