List v. City of Wheeling.

• Decision Date: 13 July 1874
• Citation: 7 W.Va. 501
• Court: West Virginia Supreme Court
• Parties: List v. City of Wheeling.

7 W.Va. 501

List

v.City of Wheeling.

Supreme Court of Appeals of West Virginia.

July 13, 1874.

By an act of the Legislature, passed the 13th day of February, 1872, entitled, "An act to authorize the City of "Wheeling to subscribe, to the capital stock of the Wheeling and Lake Erie Railroad Company," the Council of the City of Wheeling were authorized to sub--scribe, in the name of the City, to the capital stock of said Company, to an amount not exceeding $300,000.00, and pay the same in the bonds of the City, provided, not less than three-fifths of the voters of the City, who voted on the question, were in favor of the same. By an act of the Legislature, passed February 15, 1872, entitled, "An act to incorporate the Wheeling and Ohio Union Railroad Company, "and the thirteenth section thereof, the Council of said City, was authorized to subscribe, in the name and on behalf of the City, to the capital of said Company, to an amount not exceeding $500,000.00, and might pay the subscription in the bonds of the City, or otherwise, provided, three-fifths of the voters of said City, voting on the question, voted for the subscription. Each of said acts authorized the Council of the City to submit to the voters, by an election, the question of the subscriptions. The Council, by two separate ordinances, submitted to the people the question of $300,000.00 subscription, under each act, the election to take place on the 1st day of June, 1872. On that day the election was duly held, and three-fifths of the voters of the City, voting at the election, voted in favor of each subscription. Afterward, on the 22d day of August, 1872, the people of the State adopted a new Constitution, which took effect on that day, by express provision of the Schedule thereto. The eighth section of the tenth article of the Constitution, so adopted, is in these words, viz: "No county, city, school district, or municipal corporation, except in cases where such corporations have already authorized their bonds to be issued, shall, hereafter, be allowed to become indebted in any manner, or for any purpose, to an amount, including existing indebtedness, in the aggregate, exceeding five per centum on the value of the taxable property therein, to be ascertained by the last assessment for state and county taxes, previous to the incurring of such indebtedness; nor without, at the same time, providing for the collection of a direct annual tax, sufficient to pay, annually, the interest on such debt, and the principal thereof, within, and not exceeding, thirty-four years: provided, That no debt shall be contracted under this section, unless all questions connected with the same, shall have been first submitted to a vote of the people, and have received three-fifths of all the votes cast for and against the same." After the adoption of the new constitution, and after it had taken effect, and on the 20th day of January, 1878, the Council of the City, by two separate ordinances, appointed three commissioners, (the same in each ease,) to subscribe to the stock of each of said Companies, the said sum of $800,-000.00, to be paid inthebondsof the City, and directing when such bonds should be paid by said commissioners. In each case the bonds to be payable in the City of New York, bearing seven per cent, interest, payable semi-annually, and the principal payable in thirty years. The Council failed to provide for the collection of a direct annual tax sufficient to pay, annually, the interest on the debt to be created by such subscription, or any part thereof. It is admitted that the subscription of both of said sums of$300,000.00, or either of them, would increase the debt of the City beyond the limit prescribed by the said eighth section of the tenth article of the Constitution. The making of each of said subscriptions were, by the Council, made subject to conditions. Before either of the subscriptions to the stock of said Companies were made, H. K. L., and others, resident voters, owners of property and tax-payers in said City, who sued in their own behalf as well as all other tax-payers of the City, except the defendants, filed in the circuit court of the county of Ohio, their bill of injunction against the said City, the members of the Council and said Commissioners, enjoining and restraining tliem from subscribing to the stock of said Companies, or either of them, the amounts aforesaid, payable in the_ bonds of the City, or any part thereof, or to contract a debt therefor, or any part thereof. Held:

1, That the provisions of said acts of the Legislature, authorizing the Council of the City to subscribe stock to each of said Companies, conferred a power upon a public corporation of government which could be modified, changed, enlarged, restrained or repealed by the Constitution the said acts, in neither case, importing a contract, within the meaning of the clause of the Constitution of the United States, prohibiting a state from passing a law impairing the obligation of contracts.

2. The ordinances submitting said subscriptions to the vote of the voters, and the mere vote of the prescribed number of voters for the subscription, did not, in, and of themselves, together, or separately, form such a contract with the Railroad Companies, as would be protected by the tenth section of the first article of the Constitution of tbe United States. Until the subscriptions were each made, the contract, in each case, was unexecuted.

3 The said eighth section of the tenth article of the Constitution of the State is not addressed alone to the Legislature, but is addressed to the several counties, cities, &c, and all other departments and persons in the State, and took effect and became binding and operative, so far as it is prohibitory and restrictive in its provisions, upon counties, cities. &c, on, and from the 22d day of August, 1872; and the action of the Council of the City in appointing commissioners to make said subscriptions, payable in the bonds of the City, was, under the circumstances, without authority of law, and for said subscriptions to be made for said amounts and a debt be thereby created therefor, or for any part thereof, payable in the bonds of the City, would be in violation of the said eighth section of the tenth article of the Constitution of the State.

4. Equity, in such case, has jurisdiction to perpetually enjoin the making of the subscriptions and the issuing of the bonds of the City.

5. The third section of the eleventh article of the State Constitution does not qualify or suspend the operation of said eighth section of the tenth article thereof.

43. The final decree, perpetuating the injunction, whereby the court orders and decrees "that the defendants, and each, of them be, and they, and each of them, are, hereby, enjoined and restrained from contracting the debts and issuing the bonds in the bill of ccnplainants mentioned, cr either of them, or any part thereof," should be construed to apply only to the ordinances of the Council of the City authorizing the subscriptions to be made to the stock of said Companies, and the making of the subscriptions for the said amounts, or any part thereof, and payment thereof, or any part thereof, in the bonds of the City, and the making of subscriptions to the stock of said Companies, or either of them, for the said amounts, or any pari thereof, in such manner as to create a debt against the City under and according to said ordinances, or either of them. That the said perpetual injunction does not prohibit the City of Wheeling, or its Council, from hereafter contracting any such debt, and issuing the bonds of the City therefor, when done according to the provisions and within the limits, restrictions and requirements of said eighth section of the tenth article ot the Constitution, and any act of the Legislature which may then be in force, not in conflict with, or contrariant to, said section and article.

7. The said eighth section of the tenth article of the Constitution was not intended to, and does not in any wise, interfere with, or prevent, the levying, collecting and expenditure, annually, by authority of law, by the proper legal authorities, of the several counties, cities, &c, taxes for county, city, &c, purposes, and to do and cause to be done, whatever is necessary or proper for that purpose, including the making, or causing to be made, contracts touching the expenditure of the taxes so levied and collected annually, and the like And all this without a vote being taken, under the eighth section of said tenth article of the Constitution.

Appeal by George Baird, Andrew Wilson, John But-terfield, Porter Smith and others, defendants, from a deeree of the circuit court of Ohio county, rendered May 7, 1873, perpetuating an injunction, theretofore granted, by the judge of said circuit court.

The complainants below were Henry K. List and a large number of other citizens and tax payers of the city of Wheeling, sucing for themselves and on behalf of all the other taxpayers of said city, (except the defendants in the suit,) and the respondents the said City of Wheeling, the members of the First and Second Branches of the City Council of said City setting out their names George W. Jeffers as Mayor of said City, and George Adams, Josiah F. Updegraff and Benjamin Fisher, who had been, theretofore, appointed by said Council, for and on behalf of said city of Wheeling to make certain subscriptions to "The Wheeling and Lake Erie Railroad Company", and to the "Wheeling and Ohio Union Railroad Company," in accordance with certain conditions set forth in the ordinance appointing them commissioners. The material facts will be found set forth; at length, in the opinion of the Court.

The Hon. Thayer Melvin, judge of said circuit court, presided at the hearing below.

C. IF. B. Allison for the appellants.

Daniel Lamb and Asbury J. Clarke for the appellees.

Haymond, President:

This is a bill of injunction in which the circuit...