Crowder v. Town of Sullivan

• Decision Date: 13 June 1891
• Citation: 28 N.E. 94,128 Ind. 486
• Parties: Crowder et al. v. Town of Sullivan et al.
• Court: Indiana Supreme Court

128 Ind. 486

28 N.E. 94

Crowder et al.

v.Town of Sullivan et al.

Supreme Court of Indiana.

June 13, 1891.

Appeal from circuit court, Sullivan county; William M. Franklin, Special Judge.

Humphreys & Wolfe, Beasley & Williams, and J. H. Kelley, for appellants. John T. Hays and Buff & Hays, for appellees.

ELLIOTT, J.

The object of this suit is to enjoin the officers of the town of Sullivan from paying to the Sullivan Electric Light & Power Company compensation for furnishing the town and its citizens with light. The theory upon which the complaint is constructed is that the contract with the company and the ordinance upon which it is founded are void. One of the grounds upon which the validity of the contract is assailed is that it creates an indebtedness beyond the limits prescribed by the statute. The law is against the appellants upon this point. They assume that the contract creates a debt for the aggregate of all the yearly payments provided for by the contract, and, if this assumption is not valid, their position is untenable. That this assumption is not valid is clear. Where a municipal corporation contracts for a usual and necessary thing, such as water or light, and agrees to pay for it annually as furnished, the contract does not create an indebtedness for the aggregate sum of all the yearly installments, since the debt or each year does not come into existence until the compensation for each year has been earned. It may be true that the contract creates an obligation, for a breach of which an action for damages will lie, but it does not create a right of action for the unearned compensation. The earning of each year's compensation is essential to the existence of a debt. If municipal corporations cannot contract for a long period of time for such things as light or water, the result would be disastrous; for it is matter of common knowledge that it requires a large outlay of money to provide machinery and appliances for supplying towns and cities with light and water, and that no one will incur the necessary expense for such machinery and appliances if only short periods are allowed to be provided for by contract. The courts cannot presume that the legislature meant to so cripple the municipalities of the state as to prevent them from securing light upon reasonable terms, and in the ordinary mode in which such a thing as electric light or gas is obtained. But it is unnecessary to discuss this point at greater length, for we regard the law upon it as settled by the adjudged cases. City of Valparaiso v. Gardner, 97 Ind. 1, and authorities cited; City of New Albany v. McCulloch, (Sup. Ct. Ind.) 26 N. E. Rep. 1074; East St. Louis v. East St. Louis, etc., Co., 98 Ill. 415; Appeal of City of Erie, 91 Pa. St. 398; Grant v. Davenport, 36 Iowa, 396; 1 Dill. Mun. Corp. (4th Ed.) § 135.

The statute confers upon municipal corporations authority to contract for electric lights, and does not require that notice should be given inviting proposals, nor does it require notice in any form. Elliott, Supp. § 794. As the mode of making contracts is committed to the discretion of the municipal authorities, and they are not required to give notice, a contract may be awarded without giving notice. City of Aurora v. Fox, 78 Ind. 1. If the municipality were endeavoring to levy a specific assessment upon individuals or upon private property, then notice would be required upon general principles; but there is no such attempt here, for the entire compensation is to be paid from the corporate treasury. There is a clear and important difference between cases where a debt is created payable out of general corporate revenues and cases where special assessments are laid upon property. See authorities cited, note 1, Elliott, Roads & S. 343.

The right of the electric company to exercise corporate functions cannot be collaterally attacked. Where there is a statute authorizing the creation of a corporation, an attempt to comply with the statute, and an actual exercise of...