Mann v. City of Artesia

• Decision Date: 12 February 1938
• Docket Number: No. 4365.,4365.
• Citation: 42 N.M. 224,76 P.2d 941
• Parties: MANNv.CITY OF ARTESIA et al.
• Court: New Mexico Supreme Court

42 N.M. 224

76 P.2d 941

MANN

v.CITY OF ARTESIA et al.

No. 4365.

Supreme Court of New Mexico.

Feb. 12, 1938.

Appeal from District Court, Eddy County; James B. McGhee, Judge.

Suit by C. E. Mann against the City of Artesia and others to enjoin the defendants from the issuance of bonds for the purpose of erecting a municipal hospital. From an order dismissing the complaint, the plaintiff appeals.

Reversed and remanded, with direction.

A misrepresentation in notice of municipal bond issue election will support injunctive relief to stay issuance of bonds, even though the misrepresentation is of a matter not required to be included in the notice.

Jack Hanny, of Artesia, for appellant.

Stagner & Reese, of Carlsbad, for appellees.

SADLER, Justice.

This suit to enjoin the City of Artesia, its mayor and governing board from the issuance of bonds in the authorized amount of $30,000 is before us on appeal from an order dismissing the complaint after the trial court had sustained a demurrer thereto and the plaintiff had elected to stand upon said ruling.

The purpose of the bond issue was to erect a municipal hospital in the City of Artesia. The defendants rely upon 1929 Comp. § 90-402, subd. 6, as statutory authority for the proceedings. It contains no specific requirement as to notice, and the only portion of said section referring to an election is the following language: “But no such debt shall be created, unless the question of incurring the same shall, at a regular election of officers for the city, be submitted to a vote of such qualified electors of the city or town as shall in the next preceding year have paid a property tax therein, and a majority of those voting upon the question, by ballot deposited in a separate ballot box, shall vote in favor of creating such debt.”

Preliminary action looking to the bond issue was taken in the form of a resolution by the city council on February 14, 1936, and a proclamation signed by the mayor and city clerk was duly issued under that date, giving notice that an election on the bond issue would be held at the same time as the regular biennial election for municipal officers on Tuesday, April 7, 1936, and at the same places designated for said election. It further recited that the same judges and clerks would officiate, and the question to be submitted on the bond election was incorporated as follows:

“Question Submitted, Shall the City of Artesia, New Mexico, issue its negotiable coupon bonds in the sum of $30,000.00 for the purpose of erecting a municipal hospital, said bonds to be payable not more than 30 years nor less than 20 years after date of issue, and to bear interest not to exceed 5% per annum, payable semi-annually?

For Municipal Hospital ( ) Against Municipal Hospital ( )”

A proclamation for the regular biennial election, the form of which is not questioned, was contained in a separate proclamation by the mayor and city clerk issued under the same date, February 14, 1936. The mayor's proclamation calling the regular biennial election was published only one time, to wit, on February 20, 1936, whereas the governing statute, 1929 Comp. § 90-608, requires its publication “once a week for two successive weeks, the last insertion thereof to be at least one day before the date of said election.” However, the resolution of the city council authorizing the submission of the bond issue at said election was published three times, once each week for three successive weeks; the last publication being March 5, 1936, for the election to be held on April 7, 1936.

[1] The canvass of the election showed 163 votes for the municipal hospital and 39 opposed. While objection was not raised as to putting the question in the form, “For Municipal Hospital,” and “Against Municipal Hospital,” it was an indirect method at best for securing a true expression of the electorate on the vital issue, which was “For Bonds” or “Against Bonds,” the usual form of placing the question on the ballot. See Comp. 1929, § 73-118, as to irrigation bonds, and section 120-706 as to school bonds.

[2] While twelve separate errors are assigned, we shall discuss but one of them; it being decisive. It relates to the form of the preliminary resolution and the notice or proclamation of the election providing for bonds “to be payable not more than 30 years nor less than 20 years after date of issue,” etc. Under the provisions of an applicable statute, Laws 1929, c. 201, 1929 Comp. § 16-101 et seq., amended in a respect immaterial to this discussion by Laws 1937, c. 125, the proposed bonds cannot lawfully have a longer maturity than 20 years, and the various annual maturities must commence “not later than the third year after the date of issue of such bonds.”

[3] Just how those conducting the proceedings came to fix the maturities chosen is not clear. 1929 Comp. § 90-402, subd. 6, authorized a maximum maturity of 30 years, but fixed a minimum of 10 years. The maturities given do not even furnish compliance with this statute which, of course, in this respect is superseded by Laws 1929, c. 201. Whatever the explanation, and none is suggested, this defect is fatal. Bonds cannot be issued with maturities as represented in the proposal voted upon without violating the statute and thereby rendering them invalid. They cannot be issued under the statute because contrary to the proposal as respects maturities and because lacking the assent of the voters to bonds having such maturities.

[4] There is to be found in section 90-402, subd. 6, under which statute the defendants were proceeding, no specific requirement as to notice. Of course, notice was contemplated, but we may assume as defendants contend that it was unnecessary to fix maturities in the notice; that their inclusion was surplusage as respects either authority or direction therefor. Nevertheless, it was put in. The voters expressed themselves for or against the proposed issue with this representation before them. And its effect, now that it is discovered it cannot be complied with, is to deny the right to issue the bonds in question.

[5] While there is a division of authority upon the question, the better reasoned cases (and they seem to us to represent the weight of authority) hold such a misrepresentation in the election notice as that here shown will support injunctive relief to stay issuance of the bonds. See Skinner v. City of Santa Rosa, 107 Cal. 464, 40 P. 742, 744, 29 L.R.A. 512; City of North Sacramento v. Irwin, 94 Cal.App. 652, 271 P. 788, 272 P. 767; Neacy v. City of Milwaukee, 142 Wis. 590, 126 N.W. 8 Simpson v. City of Nacogdoches, Tex.Civ. App., 152 S.W. 858; City of Amarillo v. W. L. Slayton & Co., Tex.Civ.App., 208 S.W. 967; Eastern Shore Public Service Co. v. Town of Seaford, Del.Ch., 187 A. 115, 122; Oklahoma Utilities Co. v. City of Hominy, 168 Okl. 130, 31 P.2d 932; Percival v. City of Covington, 191 Ky. 337, 230 S.W. 300, 304; Madera Irr. Dist. v. Miller, 9 Cir., 47 F.2d 61. See 21 C. J. 1198, § 4171, and note, 93 A.L.R. 362.

The other line of authorities views with less concern the inclusion in the notice of something not required, particularly where to comply with the matter represented would be unlawful. See State v. Salt Lake City, 35 Utah 25, 99 P. 255, 18 Ann. Cas. 1130; In re Verde River Irr. & Power Dist. Bonds, 37 Ariz. 580, 296 P. 804; Allison v. City of Phœnix, 44 Ariz. 66, 33 P.2d 927, 93 A.L.R. 354; State v. City of West Palm Beach, 127 Fla. 849, 174 So. 334; Phillips v. Atkins, 229 Ala. 15, 155 So. 537. Cf. Bell v. City of Shreveport, 127 La. 691, 53 So. 928; Bay County v. Hand, 257 Mich. 262, 241 N.W. 256.

In Skinner v. City of Santa Rosa, supra, the Supreme Court of California dealt with the question before us. It said: “No question is made as to the regularity of the proceedings up to and including Ordinance No. 149, nor that bonds issued under that ordinance and in the form therein prescribed would have been valid, but the bonds proposed to be issued under Ordinance 156 do not conform to the ordinance calling the election, nor to important particulars specified in the notice of election, and in one of these particulars they do not conform to the statute under which it is proposed to issue them.”

Then follows discussion of Yesler v. City of Seattle, 1 Wash. 308, 25 P. 1014, greatly relied upon by proponents of the proposed bond issue. Following such discussion, the court continues: “We cannot assent to the conclusion reached by the learned justice who wrote the opinion, nor to the argument by which it is reached. The opinion concedes that under the constitution and laws of the state no indebtedness can be incurred beyond a certain limit, without authority expressed at an election duly held for that purpose; so that the real question to be determined is, has that assent been given? It is quite true that in that case, as in this, particulars were inserted in the submission which the statute did not require to be submitted; but these particulars having been submitted, the vote authorizing the indebtedness to be incurred imports the particulars named as the conditions upon which that assent has been given, and hence no one can say that, without these favorable conditions, the result of the election would have authorized the indebtedness to be incurred. The rate of interest, the place of payment, the kind of money in which payment must be made, would influence any business man in determining whether he should incur a personal debt, and must do so when he is called upon as a voter to determine whether he will favor his municipality's incurring a debt, for the payment of which, in common with others, his property is liable to taxation. He might readily consent, upon very favorable terms being offered or proposed, and strenuously oppose it if the terms were unfavorable or were uncertain. If the terms and conditions submitted to the electors may be departed from, and such election held to authorize the...