Janes v. City of Racine

• Decision Date: 28 October 1913
• Citation: 155 Wis. 1,143 N.W. 707
• Parties: JANES ET AL. v. CITY OF RACINE ET AL.
• Court: Wisconsin Supreme Court

155 Wis. 1

143 N.W. 707

JANES ET AL.

v.CITY OF RACINE ET AL.

Supreme Court of Wisconsin.

Oct. 28, 1913.

Appeal from Circuit Court, Racine County; E. B. Belden, Judge.

Action by David G. Janes and another against the City of Racine and others. From a judgment dismissing the action, plaintiffs and defendant Racine Water Company appeal. Affirmed.

Action begun November 30, 1912, by a taxpayer, to declare void the proceedings already taken by the city of Racine for its acquisition of the plant or property of the Racine Water Company, and to enjoin both the city of Racine and the Racine Water Company from further prosecuting such proceedings, and the city of Racine from incurring further expense therein.

On the 20th day of June, 1908, the Racine Water Company, which had previously operated under a franchise granted to it by the city of Racine on the 18th day of March, 1886, and effective for 25 years, accepted an indeterminate permit under the provisions of the public utility law of this state, chapter 499, Laws 1907 (sections 1797m1 to 1797m109, inclusive, Stats. 1911).

On the 7th day of February, 1911, the commoncouncil of the city of Racine adopted the following resolution: “Resolved, that the question of the city's purchasing the Racine Water Company plant be submitted to a vote of the people at the coming spring election.” The resolution was published in the official paper of the city of Racine as a part of the council proceedings prior to the election held in said city in the month of April, 1911, and the question of the purchase of the plant was discussed in the public press of the city and among the voters before said election. Thereafter the city clerk without any specific direction by the city council, prepared a notice of election, which was duly published, and the question submitted to the voters was as follows: “Shall the city of Racine purchase its waterworks?”

At the election the voting was done by the use of voting machines, pursuant to the provisions of chapter 459, Laws of 1901, as amended by chapter 495, Laws of 1905. The result of the election showed that 2,526 voted “Yes,” and 466 voted “No,” upon the question. The questions required by chapter 665, Laws of 1907, were never submitted to the voters of the city, nor has the city of Racine ever complied with any of the provisions of chapter 665.

On the 2d day of May, 1911, the city of Racine adopted a resolution, wherein it recited, “Whereas, the city of Racine, by a vote of a majority of the electors voting thereon at the regular municipal election held in said city on the 4th day of April, 1911, at which election the question of the purchase of the waterworks plant was submitted to a vote of the electors of said city, determined to purchase the Racine Water Works plant,” and wherein it provided for giving of notice to the Racine Water Company of its determination to acquire the company's property in accordance with the provisions of sections 1797m79 to 1797m86, inclusive, of the Statutes of 1911. Thereafter due notice was given to the Racine Water Company and the railroad commission of the state of Wisconsin, as required by the public utility law.

At the time of the adoption of the resolution of May 3, 1911, the city of Racine had not, nor has it since, levied any tax, issued or provided for issuing any bonds, or otherwise provided any fund for the payment of the plant of the Racine Water Company, or any means of obtaining such fund aside from the general provisions of law upon that subject, nor had the city, either by its common council or by its electors, determined in any manner how or when the plant should be paid for. Subsequently, and pursuant to a request by the city, the railroad commission of Wisconsin proceeded to make an ex parte and tentative valuation of the property of the Racine Water Company actually used and useful for the convenience of the public, which tentative valuation was fixed by it at the sum of $775,347. This tentative valuation included nothing for the going value of the plant, for certain service pipes extending from the street mains to the curb lines, nor did it include any extensions to the water distributing system ordered by the common council between April 4, 1911, and January 1, 1912. The water company rejected such tentative valuation, and refused to accept it as a basis of the acquisition of said plant by the city, whereupon the railroad commission gave notice to the Racine Water Company and the city of Racine that it would, on the 1st of April, 1912, proceed to hear testimony to determine the value of said property and the just compensation to be paid therefor by the defendant city, and the terms and conditions upon which the same should be taken over and acquired by the city, which said proceeding is still pending before said railroad commission undetermined.

In April and May, 1911, the assessed valuation of the taxable property of the city of Racine was $24,464,231. For 1911 the assessed valuation of the city of Racine was $26,596,004. In 1912 the value of all taxable property in said city, as made by the assessment officers thereof, was $26,552,448, but upon a revaluation made pursuant to law by the tax commission of Wisconsin, completed on or about the 8th day of February, 1913, the entire assessed valuation of all taxable property of said city was fixed at $50,427,243. Between the 1st day of May, 1911, and the 30th day of November, 1912, the outstanding bonded indebtedness of the city of Racine ranged from $664,000 to $744,000. In addition to its bonded indebtedness it owed, on April 4, 1911, the sum of $31,533.50.

Since the 4th day of April, 1911, the city has ordered and required the company from time to time to extend and enlarge its water distributing system, and has required it to expend in so doing the sum of $46,986.32. In June, 1913, at the time of the trial, the company had under consideration further additions and extensions ordered by the city, the estimated cost of which when completed will be $22,172.90. The company has also during said time made other necessary additions and extensions to its water plant at a further cost of $51,064.86.

Under its charter the city had power to levy a tax not exceeding 3 1/2 per cent. of the assessed value of its real and personal property. The amount of taxes required to be levied annually for city, county, and school taxes, and for customary municipal purposes, was about 2 per cent. of the assessed value of its property.

The trial court held: “That the election of April 4, 1911, and the notice given of said election and the notice given of the submission at such election of the question of the purchase by the city of Racine of its waterworks were in all respects valid and sufficient for the purpose of submitting to the voters of the question of the purchase of the plant and property of Racine Water Company actually used and useful for the convenience of the public, and that no notice of vote pursuant to chapter 665, Laws 1907, was necessary before instituting proceedings before the railroad commission for a valuation of said property under the public utilities act. That the use of said voting machines for the purpose of said referendum was not unconstitutional, but the said vote was taken according to law. That it was not necessary for the city of Racine, before the commencement of proceedings for said purchase, or before the determination of the railroad commission of the terms and conditions of sale, to raise the money for said purchase, or to make provision by levying taxes or issuing bonds therefor. That it does not appear that the city of Racine would not be able to comply with the terms and conditions of purchase which may be fixed by the railroad commission. That it does not appear that in order to comply with the terms and conditions of purchase to be fixed by the railroad commission the city will exceed the constitutional limit of indebtedness. That the city of Racine is not estopped, by ordering and causing extensions to be made, from continuing and going on with said proceeding before the railroad commission. That the plaintiff was not guilty of such laches as would prevent the bringing of this action. That under the facts stipulated and proved the plaintiff has no cause of action, and that the same should be dismissed, with costs.”

From a judgment entered accordingly the plaintiff and the defendant the Racine Water Company, which filed both an answer and cross-complaint, in which it asked for substantially the same relief as the plaintiff, appealed.

Simmons & Walker, of Racine, for plaintiff.

E. R. Burgess, of Racine, Burr W. Jones, of Madison, and Kearney, Thompson & Myers, of Racine, for defendants.

VINJE, J. (after stating the facts as above).

Briefly summarized, the material contentions of appellants are: (1) The provisions of chapter 665, Laws of 1907, should have been complied with in acquiring the plant and in submitting the question of the purchase thereof to the voters. (2) The question of acquiring the plant was improperly submitted to the voters, because: (a) The city clerk had no authority to frame the question to be submitted; and (b) the question as framed was misleading. (3) The vote was illegal because voting machines were used. (4) The city should have provided a fund for the payment of the plant before the vote to purchase was taken. (5) The city's constitutional limit of indebtedness was or will be exceeded by the purchase. (6) The city has not and cannot comply with the constitutional requirement that before or at the time of incurring any indebtedness it shall provide for the collection of a direct annual tax sufficient to pay the same, as therein provided. And (7) the city, by reason of ordering extensions to be made to the plant after it voted to purchase the same, is estopped from further prosecuting the proceedings.

[1] 1. Was it necessary to comply with the requirements of the provisions of ...