Palmer v. City of Helena

• Citation: 47 P. 209,19 Mont. 61
• Parties: PALMER v. CITY OF HELENA et al.
• Decision Date: 26 December 1896
• Court: Montana Supreme Court

47 P. 209

19 Mont. 61

PALMER v. CITY OF HELENA et al.

Supreme Court of Montana

December 26, 1896

Appeal from district court, Lewis and Clarke county; Henry W. Blake Judge.

Action by Harry B. Palmer against the city of Helena and others to restrain the issuance and sale of municipal bonds. Defendants recovered judgment on the pleadings, and plaintiff appeals. Reversed.

The plaintiff and appellant is a resident and taxpayer of the city of Helena. The defendants are the city of Helena and the may or, aldermen, treasurer, and city attorney of said city. This action is prosecuted by the plaintiff, as a taxpayer, to restrain the defendant city and its officers from issuing negotiating, and selling certain bonds, described in the complaint, which it is alleged that said city proposes to issue, negotiate, and sell for the purpose of refunding certain other bonds denominated "Sewer Bonds," and for the purpose of funding a large amount of outstanding warrants heretofore issued by said city. It is alleged in the complaint that the indebtedness which would be created by issuing, negotiating, and selling such bonds will be in excess of the limit prescribed by the provisions of article 13, § 6, of the state constitution. The complaint alleges that on July 9, 1895, a resolution was introduced in the city council of said city, and passed, to call an election to submit to the electors the question of declaring $280,000 sewer bonds outside of the constitutional limitation; that in pursuance thereof, an election was held, and a majority of the electors of said city voted in favor of declaring the bonds outside of the constitutional limitation. It is also alleged that on the 13th day of August, 1895, the city council of said city passed a resolution to call an election for the purpose of submitting to the voters the question of issuing bonds to refund and fund the bonds and warrants mentioned in the complaint; that said election was held, and a majority of the voters of the city voted in favor of the issuing of such bonds; that afterwards ordinances were passed by the city council of said city directing the bonds to be issued and sold to the highest bidder, that the city council of said city advertised for bids for the bonds, and on the 29th day of February, 1896, sold the bonds to one George F Cope. The plaintiff alleges, in substance, that at the time of the passing of said resolutions and ordinances by the city council of said city, and the election held thereunder for the purposes already stated, the debt of said city, already incurred and existing, exceeded the amount of the indebtedness which the city was permitted to incur under the provisions of article 13, § 6, of the constitution of the state; that the amount of warrants then outstanding, exclusive of interest, was $368,811.35; that the amount of bonds outstanding at that date was $391,500, making a total indebtedness of bonds and warrants, exclusive of interest, in the sum of $760,311.35; that the assessed valuation of the city for the year 1895 was $13,943,637; that the resolutions and ordinances passed by the city council of said city were absolutely null and void, because in violation of the provisions of the section of the constitution above referred to; and that the election held under and in pursuance of said resolutions and ordinances were also ineffectual and void for the same reason. The defendants, in their answer, claim that $161,500 of the bonds mentioned in the complaint are bonds which the city is seeking to refund at a lower rate of interest than said bonds are now drawing, and claim that the city has power and authority to refund said bonds under section 4800, subd. 64, of the Political Code, and claim, also, that the refunding of said bonds is not the creation of a new indebtedness. The defendants further contend that, without reference to the question of the city's undertaking to place the sewer bonds outside of the ordinary 3 per cent. limit fixed by the constitution, the city is entitled to issue bonds to the amount of $168,204 for any indebtedness that was existing on the 12th day of September, 1893, provided such indebtedness still remains unpaid. The defendants allege that on the 12th day of September, 1893, there were outstanding warrants, that still remain unpaid, to the amount of $145,171. This is not disputed by the plaintiff. The defendants further allege, and which is not disputed by the plaintiff, that the assessment of the city of Helena for the year 1892, and which remained the basis for calculating the limit of indebtedness until September, 1893, was $18,656,828, and that 3 per cent. of this amount is $559,704, and that the city was, therefore, authorized to incur an indebtedness for ordinary purposes, on the 12th day of September, 1893, to the amount of $559,704, from which said sum, they claim, if the bonded indebtedness of $391,500 is deducted, it will leave the sum of $168,204, and for which last sum the city is authorized to issue its bonds, for the purpose of funding said debt, without infringing upon said constitutional limitation. The defendants claim that, in any event, and without infringing upon the constitutional provision invoked by the plaintiff in this case, the city of Helena may issue refunding bonds to the amount of $161,500 to take up the old bonds, and $168,204 for the purpose of funding the warrant indebtedness of the city, with the accrued interest due on said bonds and warrants. Defendants deny that the resolutions and ordinances of the city council of said city and the elections held thereunder were ineffectual and void, and claim that the city had the right by such ordinances and elections to declare the $280,000 sewer bonds outside of the 3 per cent. limitation of indebtedness prescribed by the constitutional provision mentioned and invoked by plaintiff. The district court rendered judgment on the pleadings in favor of defendants, and dismissed plaintiff's complaint. From this judgment the plaintiff appeals.

Walsh & Newman, for appellant.

M. Bullard, for respondents.

PEMBERTON C.J. (after stating the facts).

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