Reed v. President and Com'rs of Town of North East
| Decision Date | 13 July 1961 |
| Docket Number | S,No. 102,102 |
| Citation | 226 Md. 229,172 A.2d 536 |
| Parties | Albert H. REED v. PRESIDENT AND COMMISSIONERS OF the TOWN OF NORTH EAST. ept. Term. |
| Court | Maryland Court of Appeals |
Roger D. Redden, Baltimore (Richard W. Case and Smith, Somerville & Case, Baltimore, on the brief), for appellant.
Edward D. E. Rollins, Jr., Elkton, for appellees.
Before BRUNE, C. J., and HENDERSON, PRESCOTT, MARBURY and SYBERT, JJ.
The appellant, as a taxpayer, brought this suit in the Circuit Court for Cecil County to test the validity of a proposed bond issue of the Town of North East. His petition prayed declaratory and injunctive relief against the effect of two resolutions passed to amend the charter of the municipal corporation for the purpose of authorizing the issuance and sale of $235,000 of general obligation bonds of North East in order to construct a water treatment plant and accessory equipment and thus remedy the inadequacies of the Town's existing water supply system.
The Town Charter (§§ 221-275, Code of Public Local Laws of Cecil County, 1953 ed.) contains provisions for the issuance of general obligation water bonds, which provisions were enacted by the General Assembly as public local laws prior to the effective date of Article XI-E of the Constitution of Maryland, known as the Municipal Home Rule Amendment, approved November 2, 1954. Under those provisions, the Town established its original water supply system from the proceeds of bonds issued in 1946 and in 1948. The system has proven unsatisfactory and extensive improvements are now contemplated, including construction of the water treatment plant.
The two resolutions now under attack are amendatory of § 274 of the County Code, one of the Charter provisions of the Town. These Charter amendments were passed in pursuance of the authority given the municipalities in Maryland, other than Baltimore City, by the Municipal Home Rule Amendment and by the implementing legislation enacted by Chapter 423 of the Acts of 1955, adding §§ 9 to 43 to Art. 23A of the Maryland Code--specifically pursuant to § 13 of said Article.
The first amendatory resolution, adopted by the President and Commissioners of the Town on November 19, 1959, authorized the issuance of bonds in the amount of $300,000 (including the $150,000 sold in the 1946 and 1948 issues), and provided that the new issue should be made in accordance with the terms and conditions of a resolution or ordinance to be passed in conformity with and pursuant to the authority of §§ 31 through 39, Art. 23A, Code, and also provided that no prior referendum should be necessary in connection with any issue of bonds under § 274 as had theretofore been required by that section. No referendum petition was filed relative to this resolution as permitted by § 13 of Art. 23A, Code, and therefore the resolution was declared effective as amending the Town's Charter on January 8, 1960.
The Town Commissioners caused plans to be prepared for the improvements to the water system and obtained a permit from the State Department of Health to proceed with the work. However, it became apparent that additional money would be required and question was raised as to whether the amount of bonds authorized by the resolution of November 19, 1959, could legally be issued. Furthermore, in order to economize on the costs of issuance, the Commissioners desired to have the authority to negotiate a private sale of the bonds. Accordingly, on July 19, 1960, the second of the resolutions intended to amend the Charter of the Town was passed. This resolution provides for the issuance of bonds in the aggregate amount of $385,000, which includes the $150,000 issued in 1946 and 1948, the $150,000 authorized under the resolution of November 19, 1959, and $85,000 in additional bonds, with the result that $235,000 in new funds would now be made available. It also provides that the 'bonds may be sold at private sale without advertisement or publication of notice of sale or solicitation of competitive bids, any public general or public local low to the contrary notwithstanding,' if the resolution or resolutions actually authorizing the issuance of the bonds shall so specify. Section 2 of the resolution provides that the amendment to the Charter of the Town proposed by the resolution should become effective on September 9, 1960, unless a proper petition for a referendum thereon should be filed as permitted by law, 'provided a complete and exact copy of this resolution shall be posted in the Town Hall of North East until August 30, 1960, and provided further that a copy of the title of this resolution shall be published in 'Cecil Whig' and 'Cecil Democrat' newspapers of general circulation in the Town of North East once in each of the weeks of July 27, August 3, 10 and 17, 1960.' As no referendum petition was filed with respect to this resolution, it was declared effective under its terms on September 9, 1960.
The Town Commissioners acquired a tract of land as a site for the treatment plant and entered into negotiations with a financial institution for the private sale of the bonds authorized by the resolutions. Thereupon the appellant, as a taxpayer (and voter and resident) of North East, brought this action seeking a declaration of invalidity of the two amendatory resolutions and an injunction prohibiting issuance of the bonds.
Both below and here the appellant made the following contentions:
(1) The Town Commissioners who voted to adopt the two amendatory resolutions were neither de jure nor de facto officers of North East at the time of passage and both resolutions are therefore void and without amendatory effect.
(2) Even if the Commissioners were de facto officers at the time of passage, the public policy rule which might be applied to validate their ministerial acts is nevertheless inapplicable to validate their attempt to enact basic legislation under the Home Rule Amendment to the Maryland Constitution.
(3) The title of the second resolution was not published in one of the two local newspapers, as required by the resolution, and hence the resolution itself, by its own terms, did not become effective.
(4) The provision of the second resolution permitting private sale of water bonds is invalid because it conflicts with the express requirement of public sale set forth in § 34(4) of Art. 23A, Code, on the ground that that section is binding on all Maryland municipalities (except Baltimore City).
The chancellor found in favor of the appellee Town on all points. He held, in his written opinion, that the President and Commissioners are at least de facto officers and as such competent to pass the resolutions and to take all other action necessary in the issuance and sale of the bonds; that the requirement of publication in two newspapers was directory and not mandatory, and that publication in one newspaper was substantial compliance with the requirement; and that the provision in Code, Art. 23A, § 34(4) for public sale of municipal bonds is inapplicable because under § 31 of that Article the procedure established by a municipal charter for the sale of bonds shall be paramount in case of any conflict. In his opinion, the chancellor stated that in view of his findings a declaratory decree would be unnecessary and he simply signed an order dismissing the petition of the appellant.
Additional facts will be stated, as necessary, in our consideration of the points raised by appellant.
(1) and (2)
Since these questions are inter-related, we shall consider them together.
From the record it appears that the holding of elections for President and Commissioners of North East (hereinafter sometimes called 'Board') has been somewhat sporadic. Section 223 of the County Code provides for annual elections of the Commissioners of that Town, to be held on the third Monday in March. A President and two Commissioners are to be elected in oddnumbered years to serve terms of two years each, or until their successors are elected and qualified, and the remaining two Commissioners are to be elected in even-numbered years, also to serve terms of two years each, or until their successors are elected and qualified. Section 224(c) requires any candidate to file a certificate of candidacy at least ten days before the third Monday in March. Section 225 requires the Board annually to designate the hours and place of holding elections by giving ten days' notice posted in five prominent places in the town. Section 228 requires every elected President and Commissioner to take an oath of office, prior to entering office, before a justice of the peace of Cecil County, whose duty it is to return a certificate of qualification to the Board to be filed and recorded among its proceedings. At least since 1952, elections have been 'few and far between'. Without unduly extending this opinion, suffice it to say that the five Commissioners who were in office at the time of the adoption of the 1959 resolution, as well as the four Commissioners who held office at the time of the adoption of the 1960 resolution (there being one vacancy at that time) had initially either been elected or appointed as President or Commissioner as the case might be. During each of the years in which elections were not held, the record shows that notices of registration for election were posted as required by the Town's Code, and in those years in which no applications for election were received, no elections were held and the incumbent President and Commissioners simply continued to serve. It appears that this procedure was followed in the interest of saving expense and not with any idea of perpetuating the incumbent Commissioners in office. It does not appear from the record that any citizen of North East ever raised any question concerning a deprivation of the right to vote for members of the Board.
The last election actually held was on March 18, 1957 (more than two years prior to adoption...
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