Rice v. City of Milwaukee

• Decision Date: 20 September 1898
• Parties: RICE v. CITY OF MILWAUKEE ET AL.
• Court: Wisconsin Supreme Court

100 Wis. 516

76 N.W. 341

RICE

v.CITY OF MILWAUKEE ET AL.

Supreme Court of Wisconsin.

Sept. 20, 1898.

Appeal from superior court, Milwaukee county; George E. Sutherland, Judge.

Action by Henry H. Rice against the city of Milwaukee and others. From an order dissolving a preliminary injunction, plaintiff appeals. Reversed.Miller, Noyes, Miller & Wahl, for appellant.

Carl Runge, for respondents.

BARDEEN, J.

The plaintiff seeks in this action to restrain and enjoin the defendant the city of Milwaukee from issuing three series of its corporate bonds, aggregating $300,000. The city had passed ordinances providing for the issue of $80,000 of so-called “garbage disposal bonds,” $80,000 “bridge bonds,” and $140,000 “bonds for permanently improving streets,” and was about to issue the bonds when this suit was commenced. The plaintiff secured a preliminary injunction from a court commissioner, and an order to show cause before the court why such injunction should not be continued pending the suit. The defendants contested the order, and moved to dissolve the preliminary injunction; and, upon a hearing had before the superior court, the injunction was vacated. The plaintiff appeals from such order. The basis of plaintiff's complaint, and the facts sought to be established on the hearing, were that the proposed bond issue was in excess of the constitutional limit of 5 per cent. of the assessed valuation of the city. Some other questions were raised, and ably discussed in the briefs and at the bar; but the view we have taken of the case renders it unnecessary to consider or dispose of them. As it appears to us, then, the main question is whether the showing on the hearing of the order to show cause was sufficient to indicate that the proposed bond issue was in excess of the constitutional limit. Const. art. 11, § 3. This section is of the following purport: No city shall be allowed to become indebted in any manner or for any purpose to an amount, including existing indebtedness, in the aggregate exceeding 5 per cent. on the value of the taxable property therein. Aside from the complaint and answer, the proof before the court consisted of affidavits of certain city officers and others who had made examination into the city's financial status, all of which are preserved in the bill of exceptions. All parties agree that the debt limit, as ascertained according to the constitutional basis, was $7,234,171.25. Admittedly, any indebtedness created in excess of that amount would be unlawful. The chief difficulty we have had has been in ascertaining, from the great mass of figures presented, the exact financial condition of the city. Counsel did not agree, and we have arrived at a result as best we could from the record.

At the date of the hearing, there were outstanding city bonds of the different series to the amount of $6,789,250, upon which there was due interest, July 1, 1898, amounting to $163,766.25, making total indebtedness due on bonds, at that time, $6,953,016.25. There was also other city indebtedness, on contracts, claims allowed, judgments, etc., admitted to be $1,050,586.25. The total city indebtedness would therefore be $8,003,602.50. It should be observed in passing that the claim was made on the argument that the item above, of interest on bonds, was included in the item of other city indebtedness, and is therefore included twice in reaching the results noted. We are unable to thus cipher it out from the great mass of figures presented. It is possible that in this great wilderness of figures, hidden in the maze of some “trial balance,” or lurking behind the totals of some “ledger balance,” there may be some way of demonstrating this to be a fact; but counsel were unable to make it clear on the argument, and our own efforts have not been more successful. We have therefore reached a pivotal point in our computation. By reference to the totals in the figures given, it will be noticed that the city's indebtedness considerably exceeds the 5 per cent. limit.

It is conceded on both sides that whatever cash there may be in the treasury properly applicable thereto is to be considered in reducing the city's indebtedness. It is admitted that, at the time of the hearing, there was a general cash balance in the treasury of $1,096,558.15. In dealing with this item, we have been furnished a great variety of computations, all depending upon how much of this fund is found properly and legally applicable to the reduction of the city's debts. In dealing with a kindred question, this court said, in Earles v. Wells, 94 Wis. 285, 68 N. W. 964: “So long as the current expenses of the municipality are kept within the limits of the moneys and assets actually in the treasury, and the current revenues collected or in process of immediate collection, the municipality may be fairly regarded as doing business on a cash basis, and not on credit, even though there may be for a short time some unpaid liabilities. * * * But the moment an indebtedness is voluntarily created ‘in any manner or for any purpose,’ with no money nor assets in the treasury, nor current revenues...