Moller v. City of Galveston

• Decision Date: 14 June 1900
• Citation: 57 S.W. 1116
• Parties: MOLLER et al. v. CITY OF GALVESTON et al.<SMALL><SUP>1</SUP></SMALL>
• Court: Texas Court of Appeals

57 S.W. 1116

MOLLER et al. v. CITY OF GALVESTON et al.¹

Court of Civil Appeals of Texas.

June 14, 1900.

Appeal from district court, Galveston couty; William H. Stewart, Judge.

Action by Jens Moller and others against the city of Galveston and others. From a judgment partly in plaintiffs' favor, they appeal, and defendants prosecute a cross appeal. Reversed.

Davidson, Minor & Hawkins, for appellants. James B. Stubbs, for appellees.

GARRETT, C. J.

This action was brought by Jens Moller and other taxpayers of the city of Galveston to restrain the city authorities from negotiating bonds of the city, amounting to $300,000, which had been executed to raise money for the construction and establishment of a sewerage system, and to cancel and annul said bonds, to restrain the levy and collection of taxes to pay the interest thereon, and to create a sinking fund thereof, and to recover back from the city taxes that had already been collected from the plaintiffs for that purpose. It was averred that the proposition to issue said bonds had never been submitted to a vote of the property taxpayers of the city of Galveston, and that for that and other reasons alleged in the petition the bonds about to be sold by the city were invalid. In defense the city pleaded authority to issue the bonds, its compliance with the law in their execution, and that an obligation had already been incurred in the establishment of a sewerage system, in the sum of $93,600, for the value of the plant of the Galveston Sewer Company, by arbitration had in accordance with its charter, and for which sum judgment had been rendered against the city. A trial below, by the court without a jury, resulted in a judgment sustaining the legality of $93,600 of the bonds, and declaring the remainder invalid, and canceling the same and restraining the city from selling them. The court denied plaintiffs a recovery for the taxes paid by them. Both parties have appealed.

The city of Galveston is legally incorporated, and its charter is made a public act, so that it may be read in evidence without proof, and judicial notice taken thereof. Charter of Galveston, § 169 (Sp. Laws 1876, p. 43). General power is conferred by the charter upon the city council to put drains and sewers in the streets, alleys, public grounds, and highways of the city, and "to establish, erect, construct, regulate and keep in repair bridges, culverts and sewers, sidewalks and crossways, and to regulate the construction and use of the same," etc. Id. §§ 34, 35. By an amendment to the charter passed in 1891 the city was authorized to issue bonds to procure a water supply, and for the erection of a sufficient system of sewerage and drainage. A special act was passed by the 25th legislature, entitled "An act to amend the charter of the city of Galveston by amending sections 39, 116, 127, and by adding thereto sections 90a, 132d, 132e, 176, 188a, 188b, 188c, 188d, 188e, 188f, 188g, 188h, 188i, 188j, 4a, 6a, 72a, 91, 92, 93." Sp. Laws 1897, p. 88. Article 132d, added to the charter by this act, gave the city power, in addition to the issue of bonds provided for in section 132c, to issue $200,000 for the payment of the floating general indebtedness of the city, and $300,000 "for the construction and establishment of a sewerage system." This section, among other provisions, also contained the following: "The city of Galveston shall acquire by purchase the plant of the Galveston Sewer Company, the value of said plant to be ascertained by arbitration, the city of Galveston to appoint one arbitrator, the Galveston Sewer Company another, and the two so appointed to name a third man, the determination of a majority of the arbitrators to be final and binding on both parties." This amendment became effective 90 days after adjournment of the legislature. An unsigned notice of an intention to apply to the legislature for the passage of this act was published in the Galveston Tribune, a newspaper published in the city of Galveston, on the 6th, 13th, 20th, and 27th days of December, 1896, and no other publication thereof was made. It was as follows: "Legal Notices. Notice of Application to Amend the Charter of the City of Galveston. To All Whom It may Concern: Notice is hereby given that application will be made, by a joint committee appointed for that purpose, to amend, revise, alter, change, and re-enact the charter of said city of Galveston in the following particulars, to wit: * * * Second. An amendment authorizing the issue of three hundred and fifty thousand dollars of five per cent. semiannual bonds, to be used for the construction of a city sewerage system. * * *" The city of Galveston borders on the coast of the Gulf of Mexico, and has more than 10,000 inhabitants. The plaintiffs are resident citizens and property taxpayers of the city of Galveston, and have been since before the year 1897. On December 11, 1897, the city council duly passed "An ordinance to provide for the issuance, sale and redemption of bonds in the sum of three hundred thousand dollars, for the construction and establishment of a sewerage system in the city of Galveston, under and by virtue of section 132d of the charter of the city of Galveston, as enacted by the 25th legislature of the state of Texas, at its regular session May 19, 1897, to be styled `Sewerage Bonds of the City of Galveston.'" Section 1 of the ordinance is as follows: "Section 1. That the mayor of said city and the committee on finance and revenue of the city council of said city be, and they are hereby, authorized and instructed to have printed and engraved bonds of the city of Galveston to the amount of three hundred thousand dollars ($300,000.00) which shall be styled `Sewerage Bonds of the City of Galveston.' These bonds are issued under and by authority of section 132d of the charter of the city of Galveston, as enacted by the 25th legislature of the state of Texas, at its regular session on May 19, 1897. Said bonds shall be payable forty years after the respective dates of their issuance, to bearer, at the office of the treasurer of the said city of Galveston, or, at the option of the holder thereof, at the fiscal agency of the city of Galveston in the city and state of New York; shall bear interest at the rate of five per centum per annum, payable semiannually, and shall have attached thereto eighty coupons, each of which shall represent the interest due for six months on the bond to which it is attached; said coupons shall be payable at the office of the treasurer of said city, or, at the option of the holder thereof, at the fiscal agency of the city of Galveston in the city and state of New York. Said bonds shall be issued under the seal of the city, signed by the mayor and countersigned by the city clerk. Each bond shall be for the sum of ($1,000.00) one thousand dollars, and the bonds shall be numbered consecutively from one to three hundred, inclusive. They shall be sold as needed, for cash, and at not less than par. They shall be registered by the city clerk in a bond registry book kept for that purpose, and it shall be the duty of the mayor, as soon as said bonds shall have been issued, and before such bonds are offered for sale, or before the sale of said portion of them as may be needed, to forward the same to the comptroller of the state of Texas for registration by the comptroller of the state, after approval by the attorney-general, as required by the registration law of the state of Texas." Section 2 reserves the right to redeem any of the bonds after the dates of their respective issuance, and provides for the manner of their redemption. Section 3 is as follows: "Sec. 3. To provide for the payment of interest on said bonds, and to create a sinking fund of two and one-half per cent. for the redemption of the same, there is hereby levied and set apart and specially appropriated an annual ad valorem tax on all property, real, personal and mixed, within the said city of Galveston, not exempt from taxation by the constitution and laws of the state of Texas, of and at the rate of ten cents on the one hundred dollars valuation of all said property, and such tax, or so much thereof as may be necessary, shall be assessed and collected annually, until the principal and interest of said bonds are fully paid up and discharged." Section 4 sets aside and appropriates the interest and sinking fund so levied for that special purpose, but provides for its investment from time to time in bonds of the city, and for the punishment of any officer of the city for misapplication thereof. Section 5 is as follows: "The mayor of said city and the committee on finance and revenue of said city council are hereby authorized and empowered to negotiate and sell the said bonds as and when needed, provided, however, that none of said bonds shall be sold for less than par or except for cash, and provided, that the proceeds of the sale of said bonds shall not be used for any other purposes than those described by section 132d of the charter of this city as enacted by the 25th legislature on May 19, 1897." The assessment value of the property of the city of Galveston for the year 1897 was $27,278,579, and for the year 1899 $26,777,338. The sewerage tax as provided for in section 3 of the foregoing ordinance was assessed for 1897, and the plaintiffs paid the tax for that year, to wit, Jens Moller, $32.87, and Fannie Mellon, $2.40. There has been no assessment of the tax for any other year. The city budget for the year March 1, 1897, to March 1, 1898, contains $22,500 for proposed issue of sewerage bonds. The execution of the bonds was delayed until August, 1899. In the meantime there had been a suit brought, affecting the validity of the tax, and an arbitration was had between the city and the Galveston Sewer Company to ascertain the value of the plant of the company. An award was made by the arbitrators, fixing $93,600 as the value of the plant; and judgment upon...