Searle v. Town of Haxtun

• Decision Date: 22 October 1928
• Docket Number: 12157.
• Citation: 271 P. 629,84 Colo. 494
• Parties: SEARLE v. TOWN OF HAXTUN.
• Court: Colorado Supreme Court

271 P. 629

84 Colo. 494

SEARLE v. TOWN OF HAXTUN.

No. 12157.

Supreme Court of Colorado

October 22, 1928

Error to District Court, Phillips County; H. E. Munson, Judge.

Action by Avery T. Searle against the Town of Haxtun, Phillips County. Judgment for defendant, and plaintiff brings error and moves for supersedeas.

Affirmed.

Coen &amp Sauter, of Sterling, for plaintiff in error.

Pershing, Nye, Tallmadge & Bosworth, of Denver for defendant in error.

DENISON C.J.

Searle brought suit against the town of Haxtun and the mayor, clerk treasurer, and trustees thereof to enjoin the issue of bonds for improvements to the town's electric light plant. A demurrer to the complaint was sustained, and plaintiff brings error and moves for supersedeas. Both parties wish a final decision of the whole case on the motion.

The complaint shows that the defendant town owns an electric light system which was acquired at a cost of about $70,000 and produces an annual income of about $5,000; that the defendants propose to make certain extensions and improvements thereto and have passed ordinance No. 12 for that purpose by which bonds are authorized in the sum of $18,000, payable only out of the income of the works, and for their payment it is provided by said ordinance and by terms of the bonds that the income of the whole property, both from the proposed improvements and the present plant, is pledged.

The first and most important objection which plaintiff makes to these proceedings is that it will create a debt in excess of the town's constitutional limit, and it is conceded that it will do so if the bonds will constitute a debt, but defendants claim that since the town, by the terms of the bonds, is under no obligation to pay them except out of said income, they are not a debt within the meaning of our Constitution, and they cite Shields v. Loveland, 74 Colo. 27, 218 P. 913, where we held valid similar bonds of the town of Loveland on the ground that they were not a debt. The plaintiff, however, conceding that if the town were acquiring a wholly new plant an agreement to pay out of the revenue thereof only and a pledge of the revenue therefrom to pay the purchase price would not be a debt, and that such an agreement and pledge of the revenue of the mere improvements would not be such, insists than an agreement to pay out of the income of property already acquired and a pledge thereof creates a debt within our Constitution, and distinguishes Shields v. Loveland, supra, by saying that there was, at the time of the issue of the Loveland bonds, no income from the plant of that city as it then stood.

We see, however, no difference in substance between a promise or pledge of the future income of property which now has an income and a promise or pledge of the future income of property which now has none. If one would make the sum secured debt, the other would. In either case the income is produced by property already owned by the city, which seems to be the condition which is condemned by the cases which plaintiff cites on this point. It cannot be said, then, that the Shields Case is not in point as to its facts; it is true, however, that the particular point, though there involved, was not argued.

Counsel for the defendant, relying upon Shields v. Loveland, cites several closely analogous cases from other states which we think sustain their position. Winston v. Spokane, 12 Wash 524, 41 P. 888, where the bonds were for completion of waterworks; Griffin v. Tacoma, 49 Wash. 524, 95 P. 1107; Bowling Green v. Kirby, 220 Ky. 839, 295 S.W. 1104, which is directly in...