Petition of City of St. Louis

• Decision Date: 08 March 1954
• Docket Number: No. 2,No. 43950,43950,2
• Citation: 364 Mo. 700,266 S.W.2d 753
• Parties: Petition of CITY OF ST. LOUIS. CITY OF ST. LOUIS v. SOMMERS
• Court: Missouri Supreme Court

Page 753

266 S.W.2d 753

364 Mo. 700

Petition of CITY OF ST. LOUIS.

CITY OF ST. LOUIS v. SOMMERS.

No. 43950.

Supreme Court of Missouri, Division No. 2.

March 8, 1954.

Motion for Rehearing or to Transfer to Court en Banc Denied

April 12, 1954.

Melvin L. Hertzman and Harold E. Goldberg, St. Louis, for intervenor-appellant.

Samuel H. Liberman, City Counselor, John P. McCammon, Associate City Counselor, St. Louis, for respondent.

Coburn, Storckman & Croft, Richmond C. Coburn, Joseph M. Kortenhof, St. Louis, for Chamber of Commerce of Metropolitan St. Louis, amicus curiae.

WESTHUES, Commissioner.

This is a suit to determine the validity of a proposed bond issue of $500,000 of the City of St. Louis. The City filed the petition for pro forma decree pursuant to Sections 108.310 and 108.320 RSMo 1949, V.A.M.S. Walter Sommers intervened. The trial court decreed that the proposed bond issue was valid. From the judgment entered, intervenor appealed.

The purpose of the proposed bond issue is to acquire land and to install or equip buildings and facilities thereon for parking motor vehicles. The City relies on Sections 82.470 and 82.480 RSMo 1949, V.A.M.S., for its authority to issue the bonds.

Intervenor has briefed three points wherein he contends the proposed issuance of bonds is void. It is stated in the brief that the ordinance authorizing the bonds is void because it violated Sections 1 and 3 of Article XVII of the Charter of the City. Section 1 reads in part: 'Some of the purposes, hereby specifically authorized for which the bonds of the city may be issued and given, sold, pledged or disposed of on credit of the city or solely upon the credit of specific property owned by the city or solely upon the credit of income derived from and property used in connection with any public utility owned or operated by the city or upon any two or more such credits, are the following:' There are then enumerated the various purposes for which bonds may be issued, incuding public utilities and charitable and penal institutions. Parking facilities as proposed to be purchased by the bonds in question are not mentioned. However, the concluding part of Section 1 reads as follows: '* * * the authority to issue bonds for any of the purposes aforesaid is cumulative and shall not be construed to impair any authority to make any public improvements under any provisions of this charter or of any law.'

The Legislature of the state, by Sections 82.470 and 82.480, supra, expressly authorized the City to acquire land and to construct and equip buildings and facilities thereon for parking motor vehicles and to issue bonds in payment thereof. The concluding portion of Section 1, supra, contemplated that the City may, under authority of law, undertake other improvements than those named in the body of the section. The section expressly provides that the enumeration made in the Charter shall not impair any authority to make other improvements under any provisions of this Charter or of any law. (Emphasis ours.) Such a law is embodied in Sections 82.470 and 82.480, supra.

Section 3 of Article XVII of the Charter provides in part that 'No bonds of the city, except bonds for paying, refunding, or renewing bonded indebtedness, and except bonds payable only from proceeds of special assessments for local improvements, shall be issued without the assent of two-thirds of the voters of the city voting at an election to be held for that purpose.'

It is conceded that no election was had authorizing the issue of bonds. It is, therefore, contended that the bonds are void by virtue of the above-quoted provision of Section 3. We find similar restrictions on the power of cities to issue bonds in the constitutions of a number of states including our own. See Sections 26(a) through 26(e) of Article VI, 1945 Constitution of Missouri, V.A.M.S.

Such limitations have as a rule been construed to apply to an indebtedness incurred by a city which is to be paid from funds raised through the taxing power of the city. In other words, the limitations provide protection to the taxpaying public. If the taxpayer of the city cannot be taxed to pay the bonds, the constitutional limitation does not apply. 64 C.J.S., Municipal Corporations, Sec. 1911, p. 502, and notes 5-9 at page 503. If the obligation to be incurred is payable solely from income derived from the operation of the proposed improvement, the obligation is not considered to be debt of the city within the meaning of the constitutional restrictions. 64 C.J.S., Municipal Corporations, Sec. 1853b, and numerous cases there cited. That rule is well established in this state. State ex rel City of Hannibal v. Smith (Auditor), 335 Mo. 825, 74 S.W.2d 367, loc. cit. 371(1); City of Springfield v. Monday, 353 Mo. 981, 185 S.W.2d 788, loc. cit. 790(3) and 792(6-8); Kansas City v. Fishman, 362 Mo. 352, 241 S.W.2d 377, loc. cit. 379(1, 2).

It is conceded that the City authorities may not in any event levy or collect a tax to raise funds wherewith to discharge the bonds proposed to be issued. The proposed bonds in this case are to be issued under authority of Section 82.480, supra, which reads, subd. 1(3):

'(3) Negotiable interest-bearing revenue bonds, the principal and interest of which shall be payable solely from the revenues derived by such municipality from the leasing of such parking facilities, which revenue bonds may be issued and sold by the municipality when so authorized by the city council, board of aldermen, or other legislative authority of such city.'

We rule that the proposed bond issue does not come within the prohibition of Section 3 of Article XVII of...