Johnson v. City of Sheffield

• Decision Date: 08 September 1938
• Docket Number: 8 Div. 929.
• Citation: 236 Ala. 411,183 So. 265
• Parties: JOHNSON v. CITY OF SHEFFIELD ET AL.
• Court: Alabama Supreme Court

183 So. 265

236 Ala. 411

JOHNSON v. CITY OF SHEFFIELD ET AL.

8 Div. 929.

Supreme Court of Alabama

September 8, 1938

Appeal from Circuit Court, Colbert County; Chas. P. Almon, Judge.

Bill in equity by J. K. Johnson against the City of Sheffield, the individuals composing the Board of Commissioners of said City, and others, to enjoin an election called to authorize municipal bonds and for declaratory judgment determining validity of the proposed bond issue. From a decree denying the injunction and declaring validity of the proposed bond issue, complainant appeals.

Affirmed.

John C Martin, of Sheffield, for appellant.

W. F McDonnell and Andrews & Almon, all of Sheffield, for appellees.

KNIGHT Justice.

Bill by J. K. Johnson, complainant, against the City of Sheffield a municipal corporation, the Board of Commissioners of said city, and others, seeking to enjoin an election called by the Board of Commissioners for authorization to issue and sell municipal bonds to provide funds for the construction of a school building, the purchase of lands for a site therefor and the making of improvements and extensions to the existing school buildings. The bill also sought a declaratory judgment as to the validity of the ordinance calling the election, and providing for the issuance of the bonds, and seeks judicial determination of the following questions: "Whether the issuance of said bonds would cause the City of Sheffield to exceed its debt limit, whether such city is authorized to make a valid and binding pledge to the payment of said proposed bonds of said ad valorem tax of one-half of one per centum now being put into the City's general fund, and whether such city is authorized to make a valid and binding pledge of its license taxes to the payment of the principal of, and interest on, said proposed bonds."

The complainant is a resident taxpayer in said city, and is engaged in the heating and plumbing business therein, and annually pays to the City of Sheffield a license tax for the privilege of carrying on such business.

The City of Sheffield is operated under a commission form of government, and its Board of Commissioners has deemed it necessary to construct a new high school building, and to make certain improvements on, and extensions to the existing public school buildings, in order to meet the present public school needs, the present buildings being wholly inadequate therefor. The city, being without funds to pay for the construction of the new building and the improvements and extensions to the existing buildings, applied to the United States through the Federal Emergency Administration of Public Works for a loan and grant with which to finance this undertaking.

The city proposes to secure the loan by the issuance and sale to the Federal Emergency Administration of $104,000 of its "general obligation bonds," the payment of which bonds to be secured by the pledge of an ad valorem tax of one-half of one per centum on the property situated in the city, and also by the pledge of the city's license taxes. The Federal Emergency Administration of Public Works has agreed to make the loan and grant upon the above terms.

The Board of Commissioners of the City of Sheffield has adopted an ordinance calling an election on the proposed bond issue, such election to be held on September 19th, 1938. It is this election that the present bill is filed to enjoin. The injunction is sought on the grounds that the election would cause a useless and unnecessary expense to the city and would put the voters of the city to useless and unnecessary inconvenience, it being charged "that the issuance of the proposed bonds would cause the city to exceed its debt limit, and that the city has no authority to pledge its license taxes or the ad valorem tax now going to the general fund to the payment of the proposed bonds."

Upon submission of the cause the chancellor held: That the issuance of the proposed bonds would not cause the city to exceed its debt limit; that the city could lawfully pledge to the payment of the bonds the ad valorem tax of one-half of one per centum that is now being paid into the city's general fund; and that the city could make a valid pledge of its license taxes to the payment of the principal and interest on said bonds, "said pledge to be such that the holders of such bonds could compel future boards of commissioners of said city of Sheffield to levy license taxes in future years sufficient in amount to pay the principal of, and interest on the proposed bonds."

The City of Sheffield is authorized by the Constitution of Alabama--Amendment 8--to levy a total ad valorem tax of one and one-half per centum each year on the property situated therein. The said city is now levying, and has for a number of years levied, a tax of one and one-half per centum on all taxable property situated in the city. Only one-third of this tax goes to the general fund of the city, and the balance of the ad valorem tax is pledged to the payment of specific obligations. So, the city now operates on its license taxes and the one-half of one per centum levied upon the properties situated in the city.

The City of Sheffield is expressly exempted from the constitutional debt limit placed on cities and towns in Alabama. Constitution of Alabama, § 225.

In the outset it must be conceded that a municipal corporation can exercise only the following powers: Those granted in express terms; those necessarily implied in, or incident to, the powers expressly conferred; and those indispensably necessary to the accomplishment of the declared objects and purposes of the municipality. New Decatur v. Berry, 90 Ala. 432, 7 So. 838, 24 Am.St.Rep. 827; Cleveland School Furniture Company v. Greenville, 146 Ala. 559, 41 So. 862; City of Eufaula v. McNab, 67 Ala. 588, 42 Am.Rep. 118; Ex parte Mayor, etc., of Town of Florence, 78 Ala. 419; Stokes v. City of Montgomery, 203 Ala. 307, 82 So. 663; Colvin v. Ward, 189 Ala. 198, 66 So. 98.

By express statutory grant municipalities in this state have full and continuing power and authority within the limits of the constitution now in effect or that may be hereafter provided, to issue and sell bonds (when such issue is authorized by an election, if such election is required by the constitution, but without an election if an election is not so required) for the purpose (among others) of constructing, reconstructing, enlarging or extending public buildings and public school houses and buildings, and to acquire the necessary land for the site for any building or improvement to be used for public purposes. General Acts 1935, p. 575, § 2; General Acts 1927, p. 534; Michie's Code of Alabama, § 2294 (6).

"The taxing power...