Sinclair v. Brightman
| Citation | 198 Mass. 248,84 N.E. 453 |
| Parties | SINCLAIR et al. v. BRIGHTMAN et al. |
| Decision Date | 11 March 1908 |
| Court | United States State Supreme Judicial Court of Massachusetts |
Jennings Morton & Brayton, for plaintiffs.
Hugo A Dubuque, City Sol., for respondents.
The waterworks of the city of Fall River have been constructed and rates for the use of the water supplied thereby have been fixed, under the authority of St. 1871, p. 509, c. 133, and some other special acts relating to the water supply of that city. St. 1873, p. 879, c. 356; St. 1874, p. 162, c. 244; St 1875, p. 843, c. 222; St. 1891, p. 727, c. 114; St. 1893, p. 866, c. 220; St. 1894, p. 209, c. 233; St. 1895, p. 544, c. 478; St. 1897, p. 277, c. 285; St. 1900, p. 104, c. 156. By a city ordinance of Fall River, adopted in 1874, in pursuance of the provisions of St. 1871, p. 511, c. 133, § 7, the Watuppa Water Board was created and has since been maintained, and has had the care and management of these waterworks. Revised Ordinances of Fall River (Ed. of 1879) c. 39; Id. (Ed. of 1904) c. 46. By the ordinances of Fall River in force up to November, 1907, it was provided that all receipts from water rates should be paid to the city treasurer and placed by him to the credit of the waterworks, and should be appropriated, first to the payment of the expenses of the management and repairs of the works; and then in the order mentioned, to the payment of interest on the water loan, to pay for extensions within certain limits, for expenses to be incurred for the better protection and preservation of the water supply under St. 1891, p. 727, c. 114, and all acts in amendment thereof, and finally to the principal of the water loan. Revised Ordinances of Fall River 1904, c. 46, §§ 13, 15. The cost of constructing the works was met by the issue of bonds as authorized by the statutes already referred to, issued to a large amount since the passage of these ordinances, and still outstanding. These bonds are direct obligations of the city, and constitute the water loan mentioned in the ordinances referred to. They contain no reference to these ordinances. Until 1897 the income from the water rates was not sufficient to pay the expenses of the management and maintenance of the waterworks and the interest upon the water loan, and large sums were applied for these purposes from the general funds of the city, raised by direct taxation; but the revenue from water rates has increased, so that a large surplus has accumulated therefrom over the amount of all expenses and interest upon the water loan, and was in the city treasury at the beginning of November, 1907. The bonds constituting the water loan now outstanding were issued at various dates from June 15, 1878, to May 2, 1904, inclusive; they amount to $1,550,000; and they become due at various dates from May 1, 1908, to May 2, 1934, inclusive. Some of these bonds were issued to provide funds for the payment of prior bonds issued under the Acts of 1871, 1873, 1874 and 1875, referred to above. But many of the bonds originally so issued have been paid from direct taxation and by means of sinking funds established by the city. The city has provided sinking funds to pay the principal of all outstanding water bonds when they mature, as provided under the general laws of the commonwealth, by means of yearly payments made into the sinking funds wholly from direct taxation; but the sinking funds do not provide for the interest on the water bonds. The present city charter of Fall River establishes the water department of that city 'to be under the charge of the Watuppa Water Board.' St. 1902, p. 310, c. 393, § 23, cl. 15.
Under this state of facts, on November 4, 1907, the board of aldermen of Fall River, which constitutes its city council under section 6 of its charter as amended by St. 1903. p. 185, c. 225, § 1, passed over the mayor's veto the following ordinance:
Section 1. Section 13, of chapter 46, of the Revised Ordinances is hereby amended by striking out all the words after 'latter,' in the third line of said section, and adding the words: 'In the general funds of the city of Fall River.' So that the section shall read:
And on December 2, 1907, the board of aldermen passed over the mayor's veto an order making certain appropriations and authorizing the city treasurer to transfer to the general revenue account of the city, $59,000 of the amount (which was then nearly $90,000) then credited to the account of the water-works department, and directing that the same be appropriated to various purposes mentioned in the order. The treasurer, the auditor, and the mayor of Fall River claim that the ordinance of November 4, 1907, and the order of December 2, 1907, are invalid and illegal, and they decline and refuse to recognize them or to act according to their provisions; and the first of the cases before us is a petition brought by the majority of the aldermen, individually and as a board, for a mandamus to command the treasurer, the auditor and the mayor to recognize the validity of the ordinance and of the order, and to command the treasurer and the auditor to carry out the said order.
The first question to be considered arises on the language of St 1871, p. 509, c. 133. By section 15 of this act the city of Fall River is authorized to issue 'scrip, notes or certificates of debt to be denominated on the face thereof 'water bonds of the city of Fall River,' to an amount not exceeding five hundred thousand dollars;' and it is provided by section 17 that 'the city council shall from time to time regulate the price or rent for the use of the water with a view to the payment from the net income and receipts [of] not only the interest, but ultimately the principal of the debt so contracted, so far as the same may be practicable and reasonable.' The respondents claim that this is a legislative requirement that the receipts from water rates shall be applied to pay the interest and principal of the water debt; that these net receipts are thereby constituted a trust fund for the benefit and security of the holders of the bonds authorized by that act and the acts supplementary thereto; and so that the ordinance of November 4, 1907, is invalid as being in contravention of this legislative provision. But we do not think so. When the Legislature has chosen to impose in a water act a requirement of this nature, it has not left its meaning to conjecture. For example, in the act for the supply of water to the city of Boston, after authorizing the city council to regulate the price or rent for the use of the water, the act expressly provides that the net surplus income 'shall be set apart as a sinking fund, and shall be appropriated for and towards the payment of the principal and interest' of the water debt, 'and shall * * * be applied solely' to that purpose until the water debt should be fully paid. St. 1846, p. 117, c. 167, § 11. And provision was made in sections 12 and 13 for an increase in the water rates if they should be insufficient for this purpose, and for their reduction if they yielded a greater amount than was needed. Minot v. Boston, 142 Mass. 274, 7 N.E. 920. The careful omission in the act of 1871 of anything corresponding to this provision must be presumed to have been intentional. In view of this omission and of the fact that the bonds authorized by this act were to be the direct obligations of the city, and of the fact that before the passage of this act, this court, in Attorney...
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