Price v. City of Mattoon

• Decision Date: 04 December 1936
• Docket Number: Gen. No. 23719.
• Citation: 364 Ill. 512,4 N.E.2d 850
• Parties: PRICE et al. v. CITY OF MATTOON et al.
• Court: Illinois Supreme Court

364 Ill. 512

4 N.E.2d 850

PRICE et al.

v.CITY OF MATTOON et al.

Gen. No. 23719.

Supreme Court of Illinois.

Oct. 27, 1936.

Rehearing Denied Dec. 4, 1936.

Appeal from Circuit Court, Coles County; Casper Platt, Judge.

Suit by Edgar T. Price and others against the City of Mattoon and others. From a decree dismissing their complaint upon defendants' motion, plaintiffs appeal.

Affirmed.

John G. Petteys, of Mattoon, for appellants.

Bryan H. Tivnen, of Mattoon, Stevens & Herndon, of Springfield, and Kiger & Dilsaver, of Mattoon (Carus S. Icenogle and Thomas R. Figenbaum, both of Mattoon, of counsel), for appellees.

ORR, Justice.

A suit in equity was filed by Edgar T. Price and others in the circuit court of Coles county to restrain the City of Mattoon, the Central Illinois Public Service Company and certain contractors from the financing and construction of a waterworks purchase-and-improvement program instituted by the municipality. It appears from the briefs that the city owned a municipal water-supply system supplying only commercial users with water, and the utility company also owned a water-supply system which exclusively supplied domestic consumers. The amended complaint was dismissed by the chancellor, on motion of defendants, because it was insufficient on its face and lacked equity. On certification of the chancellor that the validity of a municipal ordinance is involved, the appeal was brought directly to this court.

It appears from the amended complaint that plaintiffs are residents, taxpayers and water users, paying such rates as the city then charged or in the future will charge for that service. In March, 1935, the city council passed an ordinance for improving the existing municipal system by the construction of a plant addition for softening and filtering the water. A grant from the federal government was involved and the total cost ran less than $100,000. This ordinance was predicated upon the Act of April 22, 1899, as amended (Smith-Hurd Ill.Stats. c. 24, § 440 et seq.), and was defeated on a referendum vote. In November, 1935, the city council passed Ordinance 3487, which provided for the construction of a softening and filtering plant and the purchase of the water-supply system from the utility company. This ordinance was also based upon the abovecited statute. No referendum was held on this ordinance, because, according to the amended complaint, the city council and officials stated that the then present plans did not involve the construction of the softening and filtrating plant until the people desired it. After the time for a referendum had passed, bonds amounting to $450,000 were sold and the proceeds used to buy the water system of the utility company and to start construction of the softening and filtration plant. The amended complaint charged that defendants by conspiracy and fraud endeavored to circumvent the effect of the referendum vote, defeating the proposed erection of the softening and filtration plant by camouflaging that intent through the purchaseof the utility-owned system and promising the people not to go ahead with the construction of the softening and filtration plant. The plaintiffs say that because of these promises they were misled and deceived and did not endeavor to obtain a referendum vote upon Ordinance 3487.

The attack on the amended complaint centers about the application of certain equitable rights and principles. Plaintiffs maintain that their right to relief comes to them because they are taxpayers. Defendants counter with the fact that the indebtedness created under Ordinance 3487, evidenced by the $450,000 bond issue, was to be paid solely out of revenue derived from the sale of water to consumers and not out of any tax or taxes levied or to be levied. Under Ordinance 3487 no liability attaches to the general public funds of the city and no special tax liability is created, hence a taxpayer would have no right to interfere. Dudick v. Baumann, 349 Ill. 46, 181 N.E. 690;Koehler v. Century of Progress, 354 Ill. 347, 188 N.E. 445. A right of a taxpayer to sue rests upon a misappropriation of general public funds and the municipality must have a right in the funds alleged to be misappropriated. Dudick v. Baumann, supra. This right of the taxpayer to sue is founded upon the proposition of his equitable ownership of...