Scott v. Lichford
| Decision Date | 13 June 1935 |
| Citation | 180 S.E. 393 |
| Parties | SCOTT. v. LICHFORD et al. |
| Court | Virginia Supreme Court |
Appeal from Corporation Court of City of Lynchburg.
Suit by James A. Scott against Lewis E. Lichford and others. From a decree dismissing the bill, plaintiff appeals.
Affirmed.
Argued before CAMPBELL, C. J., and HOLT, HUDGINS, GREGORY, BROWNING, CHINN, and EGGLESTON, JJ.
Edward J. Hotchkiss, Jr., of Lynchburg, for appellant.
T. G. Hobbs, of Lynchburg, for appellees.
The appellant, a citizen and taxpayer of the city of Lynchburg, filed his bill of complaint, seeking to enjoin the issuance of $320,000 of bonds of the city of Lynchburg which were ordered issued by the city council for the purpose of refunding an outstanding indebtedness of the city.
The cause was heard upon bill and answer, and there was a final decree dismissing the bill as without equity, from which this appeal was allowed.
The material allegations of the bill as summarized in the petition are:
" * * * That petitioner was a citizen and tax payer of the City of Lynchburg; that by ordinance adopted August 13, 1934, the Council of the City of Lynchburg authorized the issuance of $320,000 of bonds of the said City for the purpose of funding certain floating indebtedness of said City; that the Council of said City has no authority or right, for the purposes set forth in said ordinance, to cause to be issued said bonds and that the issuance of said bonds would be illegal and a contravention of the laws of Virginia and if issued might be obligations of said City which would impose a burden upon the tax payers of said City, including petitioner, by the imposition of illegal taxes to pay said bonds, or other injuries to the tax payers of said City and petitioner; no part of said City's indebtedness sought to be funded by the issuance of said bonds was created prior to June 19, 1928, and, therefore, the Council of said City has no authority to authorize the issuance of said bonds and the Treasurer of said City has no authority to sell said bonds if issued, and if issued and sold, said bonds would not be valid obligations of the said City."
The answer of the defendants admits that no part of the indebtedness which it is sought to fund was incurred prior to June 19, 1928.
Defendants contend that the city council derives its authority to issue said bonds from section 44 of the city charter, which reads as follows:
"The council may, in the name and for the use of the city, contract debts and cause to be issued therefor notes or bonds; but no debt of the city shall be payable more than thirty-four years from the date thereof; provided that the council shall not have power to contract debts for thecity or issue evidences therefor, whether notes or bonds for sums which, when added to the net debt of the city then existing after the deduction of sinking funds and all bonds issued for or allocated to the water department, shall cause the total amount of the indebtedness of the city to be greater than sixteen per centum of the value of the real and personal estate, which shall include all capital on which a license is paid, in the city as assessed for taxation, either by the State or the city; provided, however, that in determining the limitation of the power of the city to incur indebtedness there shall not be included the classes of indebtedness mentioned in subsections (a) and (b) of section one hundred and twenty-seven of the Constitution of the State; and, provided, further, that the council shall not contract debts or issue any evidence thereof for the purpose of subscribing to the capital stock of any internal improvement company or private corporation, nor shall it cause the bonds of any such company to be endorsed by the city, and the council shall provide for the retirement of said bonds either by sinking funds as hereinafter provided, or it may cause said bonds to be issued as serial bonds to be retired periodically as provided by the ordinance authorizing the same from the current revenues of the city, in which case no sinking fund shall be provided." Acts of Assembly 1928, c. 343, p. 899.
Appellant contends that section 3090a of the Code of 1930 repeals by implication section 44 of the city charter and provides the only authority whereby the city may fund, refund, or redeem existing indebtedness. The pertinent provision of 3090a reads as follows:
"The council of any such city or town shall also have the right and authority to issue new bonds, or certificates of indebtedness, for the purpose of funding, refunding or redeeming any outstanding certificates or other form of obligations, issued for any indebtedness of such city or town which was incurred prior to June nineteenth, nineteen hundred and twenty-eight, such bonds or new certificates to be issued, so far as may be practicable, in conformity with the foregoing provisions concerning issuing new bonds."
Counsel for appellant concede that there is no express repeal of the charter provisions of the...
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