Lanigan v. Town of Gallup

• Decision Date: 10 April 1913
• Citation: 131 P. 997,17 N.M. 627
• Parties: LANIGANv.TOWN OF GALLUP ET AL.
• Court: New Mexico Supreme Court

17 N.M. 627

131 P. 997

LANIGAN

v.TOWN OF GALLUP ET AL.

Supreme Court of New Mexico.

April 10, 1913.

Syllabus by the Court.

Sections 12 and 13 of article 9 of the state Constitution do not confer the power upon municipalities to contract indebtedness, independent of legislative authorization. In this regard such sections are not self-executing.

A constitutional provision is self-executing when it takes immediate effect, and ancillary legislation is not necessary to the enjoyment of the right given or the enforcement of the duty imposed.

Where the board of trustees of a town, proceeding under sections 12 and 13 of article 9 of the Constitution, held an election to determine the question as to the issuance of bonds for the construction of a system of waterworks and sewers, and did not follow the procedure required by subsection 67, § 2402, Comp. Laws 1897, the bonds authorized at such election are invalid.

The 12-mill levy limitation fixed by section 12 of article 9 does not apply to debts contracted for the purchase or construction of a system for supplying water, or for a sewer system, for cities, towns, or villages.

Cities, towns, and villages are not authorized to submit to the voters of such municipality the joint proposition of issuing bonds for the double purpose of constructing a waterworks system and building a system of sewers, without providing for a separate vote upon each question.

Appeal from District Court, McKinley County; Raynolds, Judge.

Action by W. L. Lanigan against the Town of Gallup and others. From a judgment for defendants, plaintiff appeals. Reversed and remanded.

The town trustees of the town of Gallup, McKinley county, N. M., by ordinance provided for the submission to the voters of said town the question of the issuance of $64,000 of waterworks and sewer bonds, for the purpose of constructing and erecting a system of waterworks and sewers. The proposed issue of bonds was authorized by the vote of the taxpaying electors of said town, and thereafter, by ordinance, the town trustees provided for the sale of the bonds to the highest bidder. The bonds were sold, and the town trustees were proposing to issue $50,000 of said bonds, when the present action was instituted in the court below to enjoin the town officers from so doing. The lower court refused to restrain the issuance of said bonds and dismissed the complaint upon the merits, from which judgment this appeal is prosecuted.

The twelve mill levy limitation, fixed by section 12 of article IX, does not apply to debts contracted for the purchase or construction of a system for supplying water, or for a sewer system, for cities, towns or villages.

John A. Young, of Gallup, for appellant.

A. T. Hannett, of Gallup, and F. William Kraft, of Chicago, Ill., for appellees.

ROBERTS, C. J. (after stating the facts as above).

Subsection 67, § 2402, C. L. 1897, confers upon cities and towns the power to erect and operate waterworks, sewers and sewer systems, and other public utilities, and specifically provides the procedure by which the question of incurring an indebtedness therefor shall be submitted to a vote of the electors of such city or town. Provision is also made for the issuance and sale of the bonds as evidence of such indebtedness, and the levy of a tax to provide for the payment of the principal and interest of the bonds authorized.

The state Constitution adopted in 1911, and under which New Mexico was admitted as a state in January, 1912, by sections 12 and 13 of article 9, provides as follows:

“Sec. 12. No city, town or village shall contract any debt except by an ordinance, which shall be irrepealable until the indebtedness therein provided for shall have been fully paid or discharged, and which shall specify the purposes to which the funds to be raised shall be applied, and which shall provide for the levy of a tax, not exceeding twelve mills on the dollar upon all taxable property within such city, town or village, sufficient to pay the interest on, and to extinguish the principal of, such debt within fifty years. The proceeds of such tax shall be applied only to the payment of such interest and principal. No such debt shall be created unless the question of incurring the same shall, at a regular election for councilmen, aldermen or other officers of such city, town or village, have been submitted to a vote of such qualified electors thereof as have paid a property tax therein during the preceding year, and a majority of those voting on the question, by ballot deposited in a separate ballot box, shall have voted in favor of creating such debt.

Sec. 13. No county, city, town or village shall ever become indebted to an amount in the aggregate, including existing indebtedness, exceeding four per centum on the value of the taxable property within such county, city, town or village, as shown by the last preceding assessment for state or county taxes; and all bonds or obligations issued in excess of such amount shall be void: Provided, that any city, town or village may contract debts in excess of such limitation for the construction or purchase of a system for supplying water, or for a sewer system, for such city, town or village.”

All proceedings looking to the issuance of the bonds in question were had after the adoption of the Constitution and the admission of New Mexico as a state. No attempt was made by the town trustees to comply with the requirements of subsection 67 of section 2402, C. L. 1897, but it appears that they assumed that the provisions of the Constitution, above quoted, were self-executing and repealed all of subsection 67.

[1] The first question, therefore, which presents itself for determination is whether the above provisions of the Constitution are self-executing, in that they confer the power upon municipalities to contract indebtedness independent of legislative authorization.

If such power is granted, it must be by the language used in the proviso to section 13, viz.: “Provided, that any city, town or village may contract debts in excess of such limitation for the construction or purchase of a system for supplying water, or for a sewer system, for such city, town or village,” for it could not be argued with any plausibility that other language used in either of said sections confers such power, or authorizes the creation of any indebtedness, for any purpose, independent of legislative authorization. It will not be contended that a city or town has an inherent right, independent of legislative sanction, express or implied, to borrow money.

“Of every municipal corporation the charter or statute by which it is created is its organic act. Neither the corporation nor its officers can do any act or make any contract, or incur any liability, not authorized thereby, or by some legislative act applicable thereto. All acts beyond the scope of the powers granted are void.” Dillon's Municipal Corporations (6th Ed.) § 237. The power to borrow money may be granted to such corporations or withheld from them by the Legislature; and the Legislature may limit the right to certain purposes. It may grant the power for one purpose and withhold it as to others.

Section 12 of said article contains no language which, by any rule of construction, could be held to confer power upon such municipalities, independent of a legislative grant, to incur indebtedness for any purpose. Said section begins, “No city, town or village shall contract any debt except by an ordinance,” and this language is followed by specific provisions as to what the ordinance shall contain. It does not say that cities, towns, and villages may contract debt in the manner provided, but that no debt shall be created, unless it be created in a certain way. This portion of the section is simply a procedure provision, and no debt created in any other manner would be valid. It is true the language used, “and which shall provide for the levy of a tax, not exceeding twelve mills,” etc., “sufficient to pay the interest on, and extinguish the principal of, such debt within fifty years,” is either a limitation upon the debt-contracting power, or upon the tax-levying power; but whether the one or the other such clause cannot be held to authorize the incurring of indebtedness, in and of itself. By the language used we do not understand that the Legislature might not properly limit the time the bonds should run to less than 50 years, but certainly it could not provide that such bonds should run for a longer period. The concluding clause in said section is, like the first clause, a procedure provision.

That portion of section 13 which precedes the proviso, above quoted, is a limitation upon the debt-contracting power of such municipalities. It does not undertake to confer upon such governmental agencies the power to contract debts, in the aggregate, amounting to 4 per centum of the value of the taxable property, but limits the amount of such aggregate debts to such ratio of the taxable property, beyond which the Legislature is powerless to authorize. The limitations contained in said sections upon the debt-contracting power of such municipalities are certainly self-executing. Doon Tp. v. Cummins, 142 U. S. 366, 12 Sup. Ct. 222, 35 L. Ed. 1044; Dunbar v. Canyon County, 5 Idaho, 407, 49 Pac. 409; Law v. People, 87 Ill. 385. And the procedure provisions of section 12 are self-executing in the sense that no debt contracted, except in compliance therewith, would be valid. But no language used in either of said sections can be held to confer the authority upon municipalities to contract debts, unless such power is conferred by the proviso to section 13, to contract debts for water and sewer systems. By this proviso the framers of the Constitution were carving an exception out of the limitations theretofore imposed upon the debt-contracting power of such municipalities. In other words, by previous language used the convention placed limitations upon...