Harris v. William R. Compton Bond & Mortgage Co.

• Decision Date: 02 July 1912
• Parties: HARRIS v. WILLIAM R. COMPTON BOND & MORTGAGE CO. et al.
• Court: Missouri Supreme Court

149 S.W. 603

HARRIS v. WILLIAM R. COMPTON BOND & MORTGAGE CO. et al.

Supreme Court of Missouri.

July 2, 1912.

1. CONSTITUTIONAL LAW (§ 26) — LEGISLATIVE POWERS — CONSTITUTIONAL LIMITATIONS.

A state Constitution is not a grant, but a limitation upon legislative authority.

2. MUNICIPAL CORPORATIONS (§ 3) — CREATION—LEGISLATIVE POWERS.

In the absence of some specific state or federal constitutional limitation, the power of the Legislature in the creation of such municipal and public corporations as it deems necessary or expedient in the public interest is absolute.

3. MUNICIPAL CORPORATIONS (§ 1)—NATURE AND STATUS AS CORPORATION.

A municipal corporation is a body politic, created by laws of the state for the purpose of administering the affairs of the incorporated territory, and is simply an agency of the state

for the exercise of certain delegated powers of government.

4. HIGHWAYS (§ 90—DISTRICTS—CREATION—CONSTITUTIONAL AND STATUTORY PROVISIONS.

Rev. St. 1909, §§ 10,576-10,610, provide for the creation of special road districts, and declare that the incorporation of such district shall not apply to counties under township organization; and section 10,577, as amended by Laws of 1911, p. 370, § 1, declares that every district so organized shall be a body corporate, to be known as the road district of such county as may be designated by the county court, provides for the appointment off a board of commissioners, with exclusive control over all public highways within the district outside the limits of any city or village, and empowers the board to levy and collect road taxes and to issue bonds, and in effect transfers from the county authorities all their previous authority over roads and confers it upon the board. Const. art. 6, § 36, provides that in each county there shall be a county court, with jurisdiction to transact all county business as prescribed by law. Article 10, § 11, provides that the valuation of property for taxes levied for county, city, town, and school purposes shall not exceed the value of the same property for state and county purposes. Section 12 provides that no county, city, town, school district, "or other political corporation or subdivision of the state," shall become indebted in an amount exceeding, in any year, the income and revenue provided for that year, without the consent of two-thirds of the voters; and that in such case no indebtedness shall be incurred to an amount, including existing indebtedness, exceeding 5 per cent. on the value of the taxable property therein. Held, in view of the legislative power to create municipalities, and in the absence of any positive constitutional limitation, that the law was valid and effective to create a new political or municipal corporation.

5. HIGHWAYS (§ 122)—DISTRICTS—TAXATION —LIMITATION OF RATES—CONSTITUTIONAL PROVISIONS.

The taxing power of a special road district created under Rev. St. 1909, §§ 10,576-10,610, and section 10,577, as amended by Laws 1911, p. 370, so as to authorize the levy and collection of taxes and the issuance of bonds, not exceeding 5 per cent. of the authorized valuation of such district, and the levy and collection of a direct annual tax upon all the taxable property in the district, sufficient to pay the principal and interest of the bonds authorized, is not limited by Const. art. 10, § 11, as amended (Acts 1909, p. 906), since that provision is expressly limited to taxes for county, city, town, and school purposes.

6. HIGHWAYS (§ 122)—DISTRICTS—BONDS—PAYMENT OF INTEREST.

The power of a special road district created under Rev. St. 1909, §§ 10,576-10,610, and section 10,577, as amended by Laws 1911, p. 370, to use certain amounts to pay the principal and interest on its bonds is not affected by Const. art. 10, § 11, as amended in 1908 (Acts 1909, p. 906), since that amendment was designed only as an additional means by which the public roads of the county might be improved, and does not apply to a special road district, created as a new political or municipal corporation.

In Banc. Appeal from Circuit Court, Callaway County; David Harris, Judge.

Suit for injunction by O. T. Harris against the William R. Compton Bond & Mortgage Company and others. Judgment for defendants, and plaintiff appeals. Affirmed.

This suit was instituted in the circuit court of Callaway county by the plaintiff against the defendants, seeking to enjoin the board of commissioners of Fulton special road district of Callaway county from issuing $100,000 of its bonds, and the treasurer of the district from delivering them to the purchasers, and the purchasers thereof from accepting them, etc.

The petition was filed March 30, 1912, and was demurred to. The demurrer was by the court sustained, and the plaintiff duly excepted and declined to plead further, the court rendered judgment in favor of the defendants, and the plaintiff duly appealed the cause to this court, and, because the matters involved affect the public, the case was advanced. The petition stated fully all the facts of the case, and the demurrer admits their truthfulness. In order that the merits of the case may fully appear, we will set out the petition and the demurrer thereto. The petition is in words and figures as follows (formal parts omitted):

"Petition.

"Plaintiff, for his cause of action herein, states and represents to the court as follows:

"That the William R. Compton Bond & Mortgage Company, one of the defendants, is a corporation, organized under the laws of the state of Missouri, and doing a general business in the purchase and sale of bonds. That the Fulton special road district of Callaway county, one of the defendants, has been duly organized in accordance with the provisions of article 6, c. 102, of the Revised Statutes of Missouri for the year 1909. That J. W. Walthall, R. L. Smith, and J. L. Maughs, defendants herein, are the duly elected and acting members of the board of commissioners of Fulton special road district of Callaway county, Missouri. That J. W. Walthall, one of the defendants, is president, and R. L. Smith, one of the defendants, is secretary, respectively, of the board of commissioners of said Fulton special road district of Callaway county. That W. C. Harris, defendant herein, is the duly elected and acting treasurer of Fulton special road district of Callaway county.

"That heretofore, at a meeting of the commissioners of said district held on the 9th day of December, 1911, a special election was authorized and ordered to be held an Friday, December 29, 1911, for the purpose of submitting to the qualified voters of said district a proposition to issue $100,000 bonds. That thereafter, on the 9th day of December, 1911, due notice of said election was given by posting six notices of election in six public places within said district. That thereafter, on the 29th day of December, 1911, said election was duly and regularly held. That thereafter, on the 30th day of December, 1911, the board of commissioners of said road district proceeded to canvass the returns of the said special election, and to have entered an order of record, to the effect that more than two-thirds of the votes cast were in favor of the issue of said bonds. That thereafter, on the 28th day of March, 1912, the said board of commissioners of said road district, by resolution duly adopted, ordered the issue of $100,000 road bonds of said special road district, dated March 1, 1912, maturing $6,000 March 1st of each of the years 1913 to 1919, inclusive, $7,000 March 1st of each of the years 1920 to 1925, inclusive, and $8,000 March 1st of the years 1926 and 1927, all bonds to bear interest at the rate of five per cent. per annum, payable semiannually. That said board of commissioners proposes to issue said bonds under and by virtue of an act of the Forty-Sixth

General Assembly of the state of Missouri entitled `An act authorizing special road districts to issue bonds and providing for the payment thereof with an emergency clause,' approved March 18, 1911. That on the said 28th day of March, 1912, the board of commissioners, by resolution duly adopted, ordered the levy of a direct annual tax upon all taxable property within said special road district sufficient to produce the following sums in the following years, respectively:

                              Total
                  Year.   Amount.   Principal.   Interest
                  1912    $13,500    $6,000       $7,500
                  1913     10,700     6,000        4,700
                  1914     10,400     6,000        4,400
                  1915     10,100     6,000        4,100
                  1916      9,800     6,000        3,800
                  1917      9,500     6,000        3,500
                  1918      9,200     6,000        3,200
                  1919      9,850     7,000        2,850
                  1920      9,500     7,000        2,500
                  1921      9,150     7,000        2,150
                  1922      8,800     7,000        1,800
                  1923      8,450     7,000        1,450
                  1924      8,150     7,000        1,150
                  1925      8,800     8,000          800
                  1926      8,400     8,000          400
                

"Which said tax for the year 1912, as well as for all other years for which it is levied, is far in excess of 25 cents on the $100 assessed value of taxable property within said district, based on the assessment next before the last assessment for state and county purposes.

"That said board of commissioners at said meeting held March 28th, by resolution duly adopted, ordered said tax to be certified to the county clerk, to be collected at the same time and in the same manner that state, county, school, or other road taxes are collected. That said board of commissioners, on said 28th day of March, 1912, by resolution duly adopted, ordered the president and secretary of the board of commissioners to execute said bonds and register them in the office of the State Auditor at Jefferson City, as required by law, and thereafter to deliver them to William C. Harris, treasurer of the district, to be by him delivered to the purchasers thereof. That the said board of...