Kansas City v. Reed, 41172.

• Decision Date: 08 November 1948
• Docket Number: No. 41172.,41172.
• Citation: 216 S.W.2d 514
• Parties: In the Matter of the Petition of KANSAS CITY, MISSOURI, a Municipal Corporation, for a pro forma decree authorizing the issuance of $453,000 principal amount of Sewer Bonds, Fourth Issue, Series A. of said City, and adjudicating the validity of said bonds. CITY OF KANSAS CITY, MISSOURI (Petitioner), Respondent, v. CLARENCE B. REED and ALMA H. REED (Interveners), Appellants.
• Court: Missouri Supreme Court

216 S.W.2d 514 In the Matter of the Petition of KANSAS CITY, MISSOURI, a Municipal Corporation, for a pro forma decree authorizing the issuance of $453,000 principal amount of Sewer Bonds, Fourth Issue, Series A. of said City, and adjudicating the validity of said bonds. CITY OF KANSAS CITY, MISSOURI (Petitioner), Respondent,
v.
CLARENCE B. REED and ALMA H. REED (Interveners), Appellants. No. 41172. Supreme Court of Missouri. Court en Banc, November 8, 1948. Rehearing Denied, December 13, 1948.

Appeal from Jackson Circuit Court. — Hon. Paul A. Buzard, Judge.

AFFIRMED.

Pierre R. Porter for appellants.

(1) The lower court erred in finding that the action taken by Kansas City, Missouri, in amending its charter by enlarging its corporate boundaries to include territory located in Clay County, Missouri, did not affect the validity of the general obligation Sewer Bonds, Fourth Issue, Series A, of Kansas City, Missouri, in controversy in this cause. Secs. 1, 2, 10, 13, 25, 26, 28, Art. I, Constitution of Missouri; Secs. 26(a), 26(b), 26(c), 26(d), 26(e), Art. VI, Constitution of Missouri; Sec. 2, Art. VIII, Constitution of Missouri; Secs. 1, 3, 11, Art. X, Constitution of Missouri; Secs. 7368, 7368a, 7368b, 7368c, 7368d, 7369, 7371, 7372, 7454, 7456, 11469, R.S. 1939, and all amendments thereto, including Laws 1945, pp. 1299-1302, inclusive. Fifth, Fourteenth, Fifteenth and Nineteenth Amendments, Constitution of the United States; Secs. 31, 43 and Subsec. (3), Sec. 47, Title 8 of the United States Code Annotated, and Sec. 51, Title 18, U.S.C.A. (2) The lower court erred in finding that the issuance, sale and delivery of the $453,000 principal amount of general obligation Sewer Bonds, Fourth Issue, Series A, of Kansas City, Missouri, in controversy in this cause, will not cause the indebtedness of Kansas City, Missouri, to exceed the constitutional and statutory debt limitations applicable to said City. Secs. 26(a), 26(b), 26(c), 26(d), 26(e), Art. VI, Constitution of Missouri; State ex rel. City of Dexter v. Gordon, 251 Mo. 303, 158 S.W. 683; Steinbrenner v. St. Joseph, 285 Mo. 318, 226 S.W. 890. (3) The City's sinking fund cannot be deducted in determining the City's debt. If said sinking fund were invested in the City's own bonds, perhaps said bonds so owned by the City would reduce its indebtedness, but not as here where the sinking fund is either cash or U.S. Government bonds. Brooke v. Philadelphia, 162 Pa. St. 123, 29 Atl. 387; Schuldice v. Pittsburgh, 251 Pa. St. 28, 95 Atl. 938.

David M. Proctor, City Counselor, Benj. M. Powers, Associate City Counselor, Robert B. Fizzell and Stinson, Mag, Thomson, McEvers & Fizzell for respondent.

(1) The court has full power to adjudicate every question concerning the validity of the bonds of Kansas City involved in this case The pendency in this Court of the "Annexation Suit," being Case No. 40,216, does not affect this case because the legality of the annexation by Kansas City of territory in Clay County, in controversy in the "Annexation Case," is not in issue in this case. Secs. 3312-3316, R.S. 1939; Consolidated School Dist. No. 4, Greene County v. Day, 328 Mo. 1105, 43 S.W. (2d) 428; Dodds v. Kansas City, 347 Mo. 1193, 152 S.W. (2d) 128; City of Lebanon v. Schneider, 349 Mo. 712, 163 S.W. (2d) 588; City of Rich Hill v. Connelly, 352 Mo. 18, 175 S.W. (2d) 834; City of Springfield v. Monday, 353 Mo. 981, 185 S.W. (2d) 788; State ex rel. City of Fulton v. Smith, 355 Mo. 27, 194 S.W. (2d) 302. (2) The validity of the bonds in controversy is not affected by the fact that, at the bond election held in Kansas City on November 4, 1947, the voters residing in the area in Clay County annexed to Kansas City by an annexation to be effective January 1, 1950, were not permitted to vote. Kansas City had the legal right to fix January 1, 1950, as the date for the effectiveness of its charter amendment annexing territory in Clay County. Const. Mo., 1945, Art. VI, Sec. 20; Laws 1945, pp. 1309-1310; Charter of Kansas City, Art. I, Secs. 4, 5; Charter of Kansas City, Art. II, Sec. 15; Ordinance of Kansas City, No. 10349; Const. Mo., 1875, Art. IX, Secs. 16, 17. (3) An unincorporated area may, without the consent of its inhabitants, be annexed to a municipality having a bonded debt and the property of the annexed area subjected to taxation to pay said debt. Russell v. St. Louis, 9 Mo. 507; City of St. Louis v. Allen, 13 Mo. 400; State ex inf. Major v. Kansas City, 233 Mo. 162, 134 S.W. 1007; State ex rel. Consolidated School Dist. v. Smith, 343 Mo. 288, 121 S.W. (2d) 160; Kelly v. City of Pittsburgh, 104 U.S. 78, 26 L. Ed. 658; Hunter v. City of Pittsburgh, 207 U.S. 161, 28 S. Ct. 40, 52 L. Ed. 151; State v. City of Cincinnati, 52 Ohio St. 419, 40 N.E. 508; White v. City of Atlanta, 134 Ga. 532, 68 S.E. 103; Lutterloh v. City of Fayetteville, 149 N.C. 65, 62 S.E. 758; Kocsis v. Chicago Park District, 362 Ill. 24, 198 N.E. 847; Clay v. City of Eustis, 7 F. (2d) 141; Wertz v. City of Ottumwa, 201 Iowa, 947, 201 N.W. 511; Peterson v. Swan, 231 Iowa, 745, 2 N.W. 70; State v. City of Miami, 103 Fla. 54, 131 So. 261; State v. City of Ft. Pierce, 133 Fla. 424, 182 So. 799; Maddrey v. Cox, 73 Tex. 538, 11 S.W. 541; Pence v. City of Frankfort, 101 Ky. 534, 41 S.W. 1011; Adriaansen v. Board of Education, 222 App. Div. 320, 226 N.Y.S. 145; 1 Dillon, "Municipal Corporations" (5th Ed.), p. 617; 1 McQuillin, "Municipal Corporations" (1939 Ed.), pp. 862, 863; 1 Cooley, "Constitutional Limitations" (8th Ed.), p. 893. (4) The bonds of Kansas City proposed to be issued will not cause the indebtedness of said city to exceed the constitutional and statutory debt limitations. The bond sinking fund of Kansas City is deductible in determining the outstanding indebtedness of the City. Laws 1945, pp. 1389-1391; Steinbrenner v. St. Joseph, 285 Mo. 318, 226 S.W. 890; Kronsbein v. City of Rochester, 76 App. Div. 494, 78 N.Y.S. 813; City of Stamford v. Town of Stamford, 107 Conn. 596, 141 Atl. 891; Reynolds v. Stark, 90 Okla. 261, 217 Pac. 166; State ex rel. Shawnee v. Williamson, 186 Okla. 278, 97 Pac. (2d) 74, 125 A.L.R. 1389; First Natl. Bank of Jackson v. City of Jackson, 199 Ky. 94, 250 S.W. 795; City of Jackson v. First Natl. Bank, 289 Ky. 1, 157 S.W. (2d) 321; Briggs v. Greenville County, 137 S.C. 288, 135 S.E. 153; Williamson v. Aldrich, 21 S.D. 13, 108 N.W. 1063; Stone v. City of Chicago, 207 Ill. 492, 69 N.E. 970; Kelly v. City of Minneapolis, 63 Minn. 125, 65 N.W. 115, 30 L.R.A. 281; Levy v. McClellan, 196 N.Y. 178, 89 N.E. 569; Cutler v. Board of Education, 57 Utah, 73, 192 Pac. 621; Rice v. City of Milwaukee, 100 Wis. 516, 76 N.W. 341; City of Eau Claire v. Eau Claire Water Co., 137 Wis. 517, 119 N.W. 555; Hendricks v. School District No. 1, 44 Wyo. 204, 10 Pac. (2d) 970; 38 Am. Jur., pp. 160-161; sec. 48; Note in 125 A.L.R. 1393. (5) The different rule prevailing in Pennsylvania is based on the language of the statutes of that state. Schuldice v. City of Pittsburgh, 234 Pa. 90, 82 Atl. 1115; Schuldice v. City of Pittsburgh, 251 Pa. 28, 95 Atl. 938; McGuire v. City of Philadelphia, 245 Pa. 287, 91 Atl. 622. (6) In calculating the outstanding indebtedness of Kansas City allowable for general City purposes under Secs. 26(b) and 26(c) of Art. VI of the Constitution, i.e., the first 10 per cent of allowable indebtedness, there should be deducted $17,324,000 of outstanding street, sewer and waterworks improvement bonds. Said bonds should be classified under Secs. 26(d) and 26(e) of said Article which allow a second 10 per cent of indebtedness for said purposes. Const. Mo., 1945, Art. VI, Secs. 26(b), 26(c), 26(d), 26(e); Const. 1875, Art. X, Sec. 12; Const. Mo., 1875, Art. X, Sec. 12a; State ex rel. City of Carthage v. Hackmann, 287 Mo. 184, 229 S.W. 1078; State ex rel. City of Columbia v. Wilder, 197 Mo. 1, 94 S.W. 495. (7) The controlling valuation of taxable property in Kansas City in determining the amount of indebtedness the City may incur, and, also, the amount of said indebtedness, should not be determined as of November 4, 1947, the date of the bond election, as hereinbefore assumed, but should be...