Fazende v. City of Houston
| Decision Date | 01 March 1888 |
| Citation | 34 F. 95 |
| Parties | FAZENDE et al. v. CITY OF HOUSTON. [1] |
| Court | U.S. District Court — Eastern District of Texas |
E. H Farrar, for plaintiffs.
Brady & Ring, for defendant.
There can be no question that the ordinance of the city of Houston passed November 13, 1871, authorized the issuance of bonds for the purpose of defraying the expenses of improving the public market by building a new market-house; nor that, by the same ordinance, if words have any meaning, the said bonds were agreed to be secured by the appropriation setting apart and pledging, as a special fund, to pay the interest and to create a sinking fund to pay the principal, of all the money and other revenues accruing after the 1st of January, 1872 in any manner from the public market, market-house, and market-houses, by renting, leasing, or otherwise conducting or managing the same. As the contemplated bonds were issued and the money raised and expended under said ordinance, there can in law be no doubt that the said ordinance constituted a valid, binding contract between the holders of said bonds and the city of Houston, if the mayor, aldermen, and inhabitants of the city of Houston had authority under their legislative charter to pass the said ordinance and enter into said contract. The charter of the city of Houston, in force at the time, was passed by the legislature of the state of Texas August 2, 1870. See chapter 38 of the Laws of Texas, 1870, p 68. The twenty-second section of that charter reads as follows:
'That the mayor and aldermen of the city of Houston shall have power to appropriate so much of the revenues of the city, emanating from whatever source, to the improvement of the public market, roads, and bayou, within or without the corporation, leading to the city, as they in their wisdom may from time to time deem expedient; and for the furtherance of these objects, they shall have power to borrow money upon the credit of the city, and issue the bonds of the city therefor; but no sum of money shall be borrowed at a higher rate of interest than 10 per cent. All bonds shall specify for what purpose they were issued, and shall not be invalid if sold for less than their par value; and when any bonds are issued by the city, a fund shall be provided to pay the interest and create a sinking fund to redeem the bonds, which fund shall not be diverted nor drawn upon for any other purpose, and the city treasurer shall honor no draft drawn on said fund, except to pay interest upon or redeem the bonds for which it was provided.
And section 39 of said charter reads:
'That the city council of Houston shall have power to make contracts with any person or corporation for the improvement of the streets, bayou, or roads leading to the same, or to lease the market or other revenues of the city for any term of years, and to do and perform all acts that they may deem advisable for the interests of the city.' Here is authority to appropriate the revenues of the city, emanating from whatever source, to the improvement of the public market, to borrow money upon the credit of the city therefor, to issue bonds, to provide a fund to pay the interest, and create a sinking fund to redeem the bonds, and to lease the market or other revenues of the city for any term of years. The authority seems full and complete. That some of the revenues of the public market are derived from rents and charges in the nature of 'occupation taxes,' and to that extent are within the legislative control of the city council, does not affect the validity of the ordinance nor of the legislative authority to pass the ordinance. As the ordinance was authorized by the charter, and therefore valid, it constitutes a contract between the holders of the market-house bonds and the city of Houston, and it follows as settled jurisprudence that the ordinances of the city of Houston making any other disposition or appropriation of the market revenues than as specified in the ordinance under which the bonds were issued are void and have no legal effect, and that so much of the present...
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