Fowler v. City of Superior

• Decision Date: 21 March 1893
• Citation: 85 Wis. 411,54 N.W. 800
• Parties: FOWLER v. CITY OF SUPERIOR ET AL.
• Court: Wisconsin Supreme Court

85 Wis. 411

54 N.W. 800

FOWLER

v.CITY OF SUPERIOR ET AL.

Supreme Court of Wisconsin.

March 21, 1893.

Appeal from circuit court, Douglas county; R. D. Marshall, Judge.

Action by Homer T. Fowler against the city of Superior and others to restrain the issuing of certain bonds. From an order sustaining a demurrer to the complaint, and from the judgment entered thereon, plaintiff appeals. Reversed.Frederick H. Remington, for appellant, in support of the proposition that “the bonds on their face import an indebtedness of the city,” cited the following cases:

Fuller v. City of Chicago, 89 Ill. 282-293. See, also, Law v. People, 87 Ill. 386; headnote, Rodman v. Munson, 13 Barb. 63, decided at special term and affirmed at general term, 13 Barb. 188, and by court of appeals in 1852, 7 N. Y. 47; Newell v. People, Id.

“It is the meaning of the charter of the city of Superior that bonds of the character of the proposed bonds, shall be indebtedness of the city.” Sage v. City of Brooklyn, 89 N. Y. 190-199;U. S. v. Ft. Scott, 99 U. S. 152;U. S. v. Clark Co., 96 U. S. 211;City of Wyandotte v. Zeitz, 21 Kan. 649;State v. Commissioners, 37 Ohio St. 526;Kimball v. Board of Com'rs, 21 Fed. Rep. 145; Dill. Mun. Corp. (4th Ed.) § 810, (648;) Cumming v. Brooklyn, 11 Paige, 596;Mayer v. New York, 63 N. Y. 455, 459;Lutes v. Briggs, 64 N. Y. 404;Galveston v. Heard, 54 Tex. 420;Allen v. City of Janesville, 35 Wis. 403, and authorities there cited; Argenti v. City of San Francisco, 16 Cal. 256; Morrison v. Inhabitants of Bernards, 36 N. J. Law, 219-222; City of Leavenworth v. Mills, 6 Kan. 288;City of Atchison v. Leu, (Kan.) 29 Pac. Rep. 467;Reilly v. City of Albany, 112 N. Y. 30-42, 19 N. E. Rep. 508.

Phil H. Perkins, for respondents, cited the following cases to support the proposition that “the charter requires the holders of all special improvement bonds to look for payment to the special fund provided therefor, and, by implication, to that only:”

Harrington v. Smith, 28 Wis. 59;Alexander v. Worthington, 5 Md. 485;Bigelow v. Railroad Co., 27 Wis. 478;Neenan v. Smith, 50 Mo. 525; Jones, Corp. Bonds, § 317, citing Young v. Railway Co., 2 Woods, 606. Also, see Butler v. Horwitz, 7 Wall. 258;Meyer v. Muscatine, 1 Wall. 384.

“The city bonds in question must be read the same as if the charter provisions making them chargeable to and payable out of the property benefited were incorporated therein.” See Hall v. City of Chippewa Falls, 47 Wis. 271, 2 N. W. Rep. 279; Cooley, Const. Lim. 196; Dill. Mun. Corp. § 373; Swift v. Williamsburgh, 24 Barb. 427;French v. Burlington, 42 Iowa, 614;Travelers' Ins. Co. v. City of Denver, 11 Colo. 434, 18 Pac. Rep. 556;Bates v. Gerber, 82 Cal. 550, 22 Pac. Rep. 1115;Hunt v. City of Utica, 18 N. Y. 442;Grant v. City of Davenport, 36 Iowa, 396.

“The liability evidenced by the bonds in question is not a city liability, within the meaning of the city charter provisions.” Newell v. People, 7 N. Y. 83;Veeder v. Town of Lima, 19 Wis. 298; Dill. Mun. Corp. (4th Ed.) § 449, and many cases cited; Bryan v. Page, 51 Tex. 532;Francis v. Troy, 74 N. Y. 338;Zottman v. San Francisco, 20 Cal. 96;Fletcher v. Oshkosh, 18 Wis. 244;Whalen v. La Crosse, 16 Wis. 288.

“Decisions as to the question of municipal liability under various charter and statute limitations expressed or implied.” Travelers' Ins. Co. v. City of Denver, 11 Colo. 434, 18 Pac. Rep. 556;Baker v. City of Seattle, 2 Wash. St. 576, 27 Pac. Rep. 462;Hitchcock v. Galveston, 96 U. S. 341;Galveston v. Heard, 54 Tex. 420; Galveston v. Loonie, Id. 517; Luke v. Williamsburgh, 4 Denio, 520;Weston v. Syracuse, 17 N. Y. 110;Hunt v. City of Utica, 18 N. Y. 442;Bank of Lansing v. Lansing, 25 Mich. 208.

“The liability evidenced by the bonds in question is not an indebtedness within the meaning of the constitutional prohibition; but the appropriation of funds in advance discharges the liabilities as they arise, thus anticipating and preventing such indebtedness.” City of Springfield v. Edwards, 84 Ill. 626;Fuller v. City of Chicago, 89 Ill. 282;Grant v. City of Davenport, 36 Iowa, 396;Koppikus v. Commissioners, 16 Cal. 253;State v. McCauley, 15 Cal. 455;State v. Medberry, 7 Ohio St. 522;State v. Mayor, 23 La. Ann. 358;Dively v. Cedar Falls, 27 Iowa, 227;Strieb v. Cox, 111 Ind. 299, 12 N. E. Rep. 481; Quill v. City of Indianapolis, (Ind. Sup.) 23 N. E. Rep. 788; Appeal of City of Erie, 91 Pa. St. 398; State v. Parkinson, 5 Nev. 15; Smith v. Town of Dedham, (Mass.) 10 N. E. Rep. 782.

ORTON, J.

This action is brought by the plaintiff as the owner of taxable property in the city of Superior, and on behalf of other owners of taxable property in said city, similarly interested, to enjoin said city and its officers from issuing, selling, or in any way disposing of the bonds of said city, hereinafter described, or any evidencesof indebtedness whatever, while the indebtedness of said city shall equal or exceed 5 per centum on the value of the taxable property in said city, as shown by the last assessment for state and county taxes. A demurrer to the complaint on the ground that it does not state facts sufficient to constitute a cause of action was sustained by the circuit court, and this appeal is from said order and the judgment in the action.

It is sufficiently stated in the complaint and conceded on the argument that before the threatened issue of said bonds the city of Superior was already indebted exceeding 5 per centum on the value of the taxable property therein, as ascertained by the last assessment for state and county taxes. It is also conceded that if the bonds, the issue of which is sought to be restrained, are evidence of the indebtedness of the city, they will be in violation of section 3 of article 11 of the constitution of this state, and that the complaint states a good cause of action. The learned judge of said court says in his opinion sustaining the demurrer: “Understanding that the defendants elect to rely solely upon the question of whether the special bonds of the city of Superior, mentioned in the complaint, constitute municipal indebtedness within the meaning of section 3 of article 11 of the constitution of this state, and waive all other questions, that is the only question that has been considered or will be passed upon by the court.” We shall therefore also consider and decide only that question.

The material parts of the proposed bonds are as follows: “United States of America. State of Wisconsin. No. _____. $_____. City of Superior, Douglas County. Improvement Bond. Installment _____. Know all men by these presents, that the city of Superior, in the county of Douglas, and state of Wisconsin, acknowledges itself indebted to and promises to pay the bearer hereof the sum of _____ dollars, lawful money of the United States of America, in gold coin of present standard of weight and fineness, to be paid on the _____ day of _____, A. D. 18--, with interest thereon at the rate of six per centum per annum, payable semiannually on the _____ day of _____ and the _____ day of _____, in each year, as evidenced by the semiannual interest coupons hereto attached as they severally become due; both the interest and principal of this bond being payable at the National Bank of the Republic, in the city of New York, state of New York. The said principal sum and interest shall be payable out of the proceeds of the improvement assessments hereinafter mentioned, and this bond and accompanying coupons are issued upon the faith and security of said assessments.” Then follows a recital of the provisions of the charter and of the proceedings of the common council and board of public works, as the authority antecedent to the issue of the bonds, fully complied with, and that the cost of the improvement has been duly charged as an assessment against the property benefited thereby; and then: “The payment of the principal and interest of this bond is made chargeable upon the property benefited by said improvement, as evidenced by a statement and schedule of such special assessments, on which the bonds are issued, as recorded in the office of the city clerk of said city of Superior.” Then follows a recital of the various installments of the bond, and when payable; and then: “It is hereby certified and recited that all acts, conditions, and things required to be done precedent to and in the issuing of this bond have duly happened and been performed in regular and due form as required by law. In testimony whereof the city of Superior, in the county of Douglas, and state of Wisconsin, has caused this bond to be signed by its mayor and city clerk, and countersigned by its comptroller, and the seal of said city to be hereto attached, this _____ day of _____, A. D. 189-. _____ _____, Mayor. _____ _____, Clerk. Countersigned: _____ _____, City Comptroller.” Form of coupon attached: “No. _____ $_____. The City of Superior. Will pay the bearer at the National Bank of the Republic, in the city of New York, and state of New York, on the _____ day of _____, _____ dollars, being six months' interest due that day on improvement bond No. _____ of installment _____, for $_____, issued for _____. [Signed] B. J. Van Vleck, City Clerk. John W. Scott, Mayor.”

It is averred in the complaint that everything required to be done by the charter was done in reference to the issuing of the bonds, which is virtually an averment that the bonds were issued in accordance with the charter. The material and essential portions of the bond are the first part, concluding with “State of New York,” or a “simplex obligatio,” and the signing or execution. All other parts of the bond are recitals merely. There are no words of qualification, proviso, or condition.

1. The city of Superior unconditionally and absolutely acknowledges itself to be indebted, and promises to pay the bearer the sum of _____ principal, and semiannual interest. First recital: They “shall be payable out of the proceeds of the...