Percival v. City of Covington

• Decision Date: 29 April 1921
• Citation: 230 S.W. 300,191 Ky. 337
• Parties: PERCIVAL ET AL. v. CITY OF COVINGTON ET AL.
• Court: Kentucky Court of Appeals

230 S.W. 300

191 Ky. 337

PERCIVAL ET AL. v. CITY OF COVINGTON ET AL.

Court of Appeals of Kentucky.

April 29, 1921

Appeal from Circuit Court, Kenton County.

Action by H. W. Percival and others against the City of Covington and others. Judgment for defendants, and plaintiffs appeal. Reversed in part, and affirmed in part.

John L Rich, of Covington, for appellants.

A. E Stricklett, of Covington, for appellees.

HURT C.J.

The appellants, who as citizens and taxpayers of the city of Covington sought by this action to enjoin the board of commissioners of the city from issuing and selling $250,000 of bonds of the city for the purpose of obtaining money to build an addition to the waterworks of the city. The grounds upon which the validity of the proposed issue of bonds is assailed are as follows:

(1) The ordinance submitting the question to the qualified voters of the city was not advertised as required by section 3069, Ky Stats.

(2) The purpose for which the bonds were to be issued was not sufficiently set out and defined in the ordinance by which the incurrence of the indebtedness was submitted to a vote of the electors and the authority to incur the indebtedness obtained.

(3) The incurrence of the proposed indebtedness is in violation of sections 157 and 158 of the Constitution.

(4) The bonds, as proposed to be issued and sold in accordance with an ordinance adopted after the election, do not contain a provision which was embodied in the ordinance by which the incurrence of the proposed indebtedness was submitted to the voters of the city, and which provision was as follows:

"The city of Covington reserves the right to fund all of the said bonds, at any interest-paying time, at a lower rate of interest after the expiration of ten years from date of issue."

These contentions were all denied in the trial court, and the petition was dismissed, and from the judgment the plaintiffs have appealed. Neither of the contentions has any merit, except the last one stated, and no further notice will be taken of them, but the fourth or last-mentioned contention presents a serious ground for consideration, and requires a reluctant, but adverse, decision to the right of the commissioners to issue or to sell the bonds in the form now proposed.

Section 3069, Ky. Stats., which is a part of the charter of cities of the second class to which the city of Covington belongs, in so far as it is pertinent to the present controversy or necessary to be stated, provides as follows:

"The general council shall not expend any money in excess of the amount annually levied, collected or appropriated for any special object: Provided, if, in any year, the general council shall deem it necessary to incur any indebtedness, the payment of which cannot be met without exceeding the income and revenue provided for the city for that particular year, it shall, by ordinance, order an election by the qualified voters of the city to be held, to determine whether such indebtedness shall be incurred. Such ordinance shall specify the amount of indebtedness proposed to be incurred, the purpose or purposes of the same, and the amount of money necessary to be raised annually by taxation for an interest and sinking fund, as herein provided. Such ordinance shall be published for at least two weeks just preceding the election in the official newspaper in and for such city, or by posting written or printed copies thereof at three or more public places in such city, if there be no such official newspaper. Upon filing by the city of a certified copy of an ordinance ordering such an election with the county clerk of the county in which such city is located, thirty days prior to any regular election, it shall be the duty of the county clerk to cause to be printed upon the ballots, to be used in the city precincts of such county at said election, the question of the issuance of bonds by said city as proposed by such ordinance. The expenses thereof shall be paid as other election expenses are paid. The election shall be held in the manner provided by general law for submitting public measure to a vote of the people, and shall be held at the same time and place, and in the same manner, and by the same officers as the regular election of that year. The votes on said question shall be canvassed and certified by the election officers in the same manner as votes cast in the regular election. It shall be the duty of the county board of election commissioners to canvas the returns of the election on said question, and certify the result thereof at the same time and in the same manner as the returns of the regular election.

If, upon a canvas of the votes at such an election, it appears that two-thirds of all the qualified voters of said city, voting on said question, shall have voted in favor of incurring such indebtedness, the general council may incur such indebtedness and issue bonds of the city in evidence thereof, and it shall be the duty of the general council to pass an ordinance providing for the mode of creating such indebtedness and of paying the same."

It will and must be conceded that, before the board of commissioners is authorized to incur an indebtedness for the city of Covington in the sum of $250,000, and to issue bonds of the city therefor, payable in the sum of $5,000 annually for a period of 20 years, and thereafter in the sum of $7,500 payable annually for a period of another 20 years, and all bearing interest at a rate not exceeding 6 per cent. per annum, payable semi-annually, until paid, under the provisions of the Constitution and the statute laws bearing upon the subject, and considering the stipulated value of the taxable property of the city and its indebtedness, bonded and floating, and the rate of taxation allowed by law, it must receive authority to do so by the approval and assent of at least two-thirds of the qualified voters of the city, voting at an election held for the purpose, of ascertaining whether the electorate approved or disapproved the incurrence of the debt, and the election for that purpose must be conducted in the manner provided by the statute quoted. Until the assent of the electorate has been obtained, the general council, or in the instant case the board of commissioners, is entirely without power to incur such an indebtedness on behalf of the city. A paragraph of the statute quoted prescribes the essential things which must be submitted to the voters at the election, and which must be necessarily stated in the ordinance submitting the proposal to the voters, and this same paragraph prescribes the course to be followed in regard to the publication of the ordinance, its certification to the county court clerk, the preparation of the ballots to be used at the election, the time of the election, and the canvassing of the result, and these and similar provisions have been uniformly held to be mandatory, and without a substantial compliance with which the assent or approval of the electorate has not been considered to have been obtained. Kash et al. v. City of Jackson et al., 159 Ky. 523, 167 S.W. 676; Ex...