Scott v. City of La Porte

• Decision Date: 27 January 1904
• Citation: 69 N.E. 675,162 Ind. 34
• Parties: SCOTT et al. v. CITY OF LA PORTE et al.
• Court: Indiana Supreme Court

162 Ind. 34

69 N.E. 675

SCOTT et al.

v.CITY OF LA PORTE et al.

Supreme Court of Indiana.

Jan. 27, 1904.

Petition for rehearing denied.

For former opinion, see 68 N. E. 278.

Daniel Noyes and W. B. Biddle, for appellants. E. D. Salsbury, W. C. Ransburg, Weir, Weir & Darrow, C. H. Truesdale, M. R. Sutherland, H. S. Oakley, Smith, Duncan, Hornbrook & Smith, and H. W. Worden, for appellees.

GILLETT, C. J.

Appellees have petitioned for a rehearing herein, and their counsel have filed able briefs in support of the petition. Their first complaint is that the case was decided upon a ground not formally urged by appellants' counsel. We are not advised of the absence of any averment in the complaint, or of any defect of proof, which would render the conclusion reached inadmissible, assuming its abstract correctness. The matter of fact on which our decision was based stood out upon the face of the proceedings, without and beyond dispute, and the only real difference between the position of the court and that of appellants' counsel was that we held that certain elements in the transaction constituted an unauthorized undertaking to stand sponsor for the success of the enterprise, while they contended that the transaction amounted to the creating of a debt. Having reached the conclusion we did as to the nature of the transaction, it was proper to consider as to the power of the municipality in the premises, and, if it were found that there was a want of power to enter into the contract, it was our duty not to permit ourselves to drift along the current of argument found in the briefs until we were confronted with the constitutional question. In the case of Big Creek Stone Co. v. Seward, 144 Ind. 205, 42 N. E. 464, 43 N. E. 5, where the cause had been reversed for a defect in the complaint not pointed out by the counsel who prosecuted the appeal, it was said on rehearing, “When an error is presented by the record, the case is decided upon the record, and not upon the argument of counsel.”

Our attention has been called by appellees' counsel to a number of sections of the statutes which it is claimed contain grants of power sufficiently broad to authorize a city to buy water for its use, and for that of its inhabitants. We have no disposition to take issue with counsel on the points thus made, since they are not involved in the question in hand. Our decision rests upon the proposition that it is not competent for a city, in contracting for a supply of water for its use, and also for that of the private water consumers therein, to bind itself for a term of years to buy, at a fixed price, at least a certain number of gallons per month. The statement in the opinion that the court judicially knew that the city of La Porte would be compelled to sell a large part of the 30,000,000 gallons of water that it had contracted to buy each month, had reference, not to the needs of the city and its inhabitants, but to that of the city proper; and the purpose of the statement was to guard against the inference that we were holding that the authorities might not determine the quantity of water that the city would consume for its own purposes. We were endeavoring to show by such statement that the purchase was for the use of private consumers as well-a use that, while it might exceed the amount the city had to sell, might also be much less, depending upon the population of the city in the future, the necessities of the private consumers, and their disposition to extend or refuse their patronage to the city in the matter of the purchase of water. But the observation as to our judicial knowledge was really unnecessary, since, as before shown, the title of the grant recited that the water was to be furnished “to the city of La Porte and its inhabitants.”

As the opinion affirmatively discloses, what was therein said as to the want of power in a municipality to tax for a private purpose had no reference to the power of the city to make a contract which would secure to it and its inhabitants the means of obtaining a sufficient supply of wholesome water, but to the attempted equipping of a private corporation with a credit by a means unauthorized by law. Since the case turns on this proposition, we shall examine it somewhat more at length; first considering the matter as one of statutory interpretation and construction.

As said by Judge Dillon in his authoritative work on Municipal Corporations (section 39): “When it is remembered that the charter of such a corporation is its constitution, and gives to it all the powers it possesses, unless other statutes are applicable to it, its careful study, in any given case, is indispensable to an understanding of the nature and extent of the powers it confers, the duties it enjoins, and liabilities it creates. The construction of its various provisions, and the determination of the relation which it bears to the general statutes of the state- how far the charter controls, or how far it is controlled by other legislation-are often among the most difficult problems which perplex the lawyer and the judge. The study of a question of corporation law begins with the charter, but it must oftentimes be pursued into the Constitution, the general statutes, and legislative policy of the state, and after this into the broad field of general jurisprudence.” The express or direct powers of the city relative to the obtaining of a supply of water, so far as our examination has revealed, seem to relate to the constructing and establishing of waterworks by the city, or to authorizing a private corporation so to do. We do not mean to intimate that the above courses are the limit of the powers of cities of the general class in obtaining water. To do so would be to leave out of account the implications which may flow from some of the more general grants of authority. Just the precise breadth of the legislative grant to cities of the general class in the matter of obtaining water need not now be determined, but obstacles and difficulties in exercising powers fairly to be implied cannot operate to enlarge the authority as applied to a particular instance. Grand Rapids, etc., Co. v. Grand Rapids, etc., Co. (C. C.) 33 Fed. 659.

As to the question whether a city can contract to buy a definite quantity of water at a fixed price, to be furnished for its use and that of its inhabitants during a term of years, it is first to be considered that such a course has no direct authorization. The maxim, “Expressio unius exclusio alterius,” has been frequently applied in the construction of grants of power to corporations, municipal and private. First Presbyterian Church of Ft. Wayne v. City of Ft. Wayne, 36 Ind. 338, 10 Am. Rep. 35;English v. Smock, 34 Ind. 115, 7 Am. Rep. 215;Gaslight, etc., Co. v. City of New Albany, 156 Ind. 406, 59 N. E. 176;Mayor of Nashville v. Ray, 19 Wall. 475, 22 L. Ed. 164;People v. Utica Ins. Co., 15 Johns. 358, 383, 8 Am. Dec. 243;New York, etc., Co. v. Ely, 2 Cow. 678;City of Ft. Scott v. Eads Brokerage Co., 117 Fed. 51, 54 C. C. A. 437;Farmers, etc., Bank v. School District, 6 Dak. 255, 42 N. W. 767. And see City of Logansport v. Dykeman, 116 Ind. 15, 17 N. E. 587;Woodford v. Hamilton, 139 Ind. 481, 39 N. E. 47; Broom's Legal Maxims, p. *664. This rule, however, is not necessarily to be applied to the extinguishment of powers implied from general grants, in cases where the specific provision is but a grant of discretionary authority, that, upon the whole, does not appear to have been intended to exclude a power to be implied from a more general grant. Clark v. City of South Bend, 85 Ind. 276, 44 Am. Rep. 13. Whether the general grant is to be treated as limited by the direct legislation, may depend upon a number of considerations -as to whether the express power is couched in such terms as to make it fairly inferable that the statute was intended to establish the only method, whether such power seems reasonably adequate to meet the necessities of cities generally, upon the language of the general grant from which another method is sought to be implied, and upon the consideration as to whether the latter method is reasonable and fairly calculated to attain an authorized municipal end. See 20 Am. & Eng. Encyc. of Law (2d Ed.) 1142. Mr. Tiedeman says: “Express provisions in a charter or statute modify the inherent or conferred power to contract, and consequently deserve the carefulest consideration in determining the scope of the general powers. And, furthermore, too much emphasis cannot be given to the rule that any power to contract, whether conferred upon or inherent in the corporation, does not authorize the making of every sort of contract, but of such only as are fit, usual, and necessary to enable the corporation to carry into effect the purposes for which it was chartered.” Mun. Corp. § 163. Section 3616, Burns' Rev. St. 1901, which is sometimes referred to as the equivalent of a general welfare clause, seems to be designed to enlarge the legislative powers of cities, rather than their contractual powers, except as the contractual element may exist in general ordinances, the provisions of which have been accepted by third persons. See Citizens', etc., Co. v. Town of Elwood, 114 Ind. 332, ...