State v. City of Helena

• Citation: 63 P. 99,24 Mont. 521
• Parties: STATE ex rel. HELENA WATERWORKS CO. v. CITY OF HELENA et al.
• Decision Date: 17 December 1900
• Court: United States State Supreme Court of Montana

63 P. 99

24 Mont. 521

STATE ex rel. HELENA WATERWORKS CO. v. CITY OF HELENA et al.

Supreme Court of Montana

December 17, 1900

Appeal from district court, Lewis and Clarke county; S. H. McIntire Judge.

Application by the state of Montana, on the relation of the Helena Waterworks Company, for a writ of mandamus against the city of Helena and the city council of the city of Helena. From a judgment on the pleadings in favor of defendants, plaintiff appeals. Affirmed.

The appellant, in the district court of Lewis and Clarke county made an application for a writ of mandamus requiring the city of Helena, and the city council of the city of Helena, to audit, allow, and pay certain claims for water furnished to said city during and since the month of May, 1898, under the terms of an ordinance passed by the city council of the city of Helena on the 17th day of August, 1897, and also requiring the city and said city council to appropriate sufficient of the tax levied in the year 1899 to pay the amount due and to become due under said ordinance for water furnished during the fiscal year commencing the first Monday in May, 1900.

The facts are substantially as follows: On the 16th day of March 1897, in a suit then pending in the circuit court of the United States in and for the district of Montana, one James H. Mills was appointed receiver of the water plant owned and operated by the Helena Consolidated Water Company, and used for the purpose of supplying the city of Helena and the inhabitants thereof with water. On August 17, 1897, as stated above, the city council of the city of Helena duly passed Ordinance No. 367, entitled "To provide the city of Helena with water for fire, sewerage and other municipal purposes for a period of five years from August 1st 1897." Among other things, said ordinance provided that James H. Mills, as receiver of the Helena Consolidated Water Company, should furnish to the city of Helena, for a period of five years from the 1st day of August, 1897, an ample and sufficient supply of good, pure, wholesome, and clear water for fire, sewerage, and other municipal purposes. The consideration for the water so furnished was the sum of $1,500 per month, payable on or before the 10th day of each month, for water furnished during the preceding month. Section 11 of said ordinance is as follows: "There is hereby appropriated out of the yearly revenues of said city of Helena, for the use and benefit of said receiver, during the full term of five years from and after the first day of August, A. D. 1897, the sum of fifteen hundred dollars per month for the use of water through the present existing hydrants, by said city, for the purpose of fire, sewerage and other municipal purposes; and the further sum of five dollars and eighty-three cents per month per hydrant for each and every hydrant hereafter ordered to be erected by said city council for the use of water through the same for fire sewerage and other municipal purposes. And it is hereby made the duty of said city council during the term of five years to levy annual taxes under the provisions of the Political Code of the State of Montana authorizing the levy of taxes for general purposes, sufficient in amount to meet the appropriations hereby made." Said ordinance further provided that within 30 days after the passage thereof said receiver should file with the city clerk an acceptance in writing of all the terms and conditions thereof, and that immediately thereafter said ordinance should become effectual as a contract between the city and said receiver, for the purposes and upon the terms and conditions named therein. It appears from the petition that within said period of 30 days said James H. Mills, as receiver, filed his acceptance in writing of the terms and conditions of said ordinance. It further appears that since the acceptance of said ordinance water has been furnished to the city of Helena in accordance with the terms thereof, and has been used by said city for the purposes mentioned therein. It also appears that nothing has been paid for water furnished since the 1st day of May, 1898.

It is alleged in the petition that the said city of Helena levied a tax for general municipal and administrative purposes sufficient in amount to meet and discharge the appropriation made in said ordinance for the fiscal year beginning with the first Monday in May, 1898, together with all other liabilities and expenses of said city for said year; that a like tax was levied by the city council for the fiscal years commencing with the first Monday in May, 1899 and 1900, respectively, in each instance sufficient in amount to pay and discharge the appropriation made by said ordinance for each of said years, together with the other liabilities and expenses of the city. It is alleged that each year since the passage, approval, and acceptance of said ordinance the said city council has appropriated in the annual appropriation ordinance the sum of $18,000 to pay for water furnished under said ordinance. Then follows an allegation that the water plant and system of appellant is the only one in the city of Helena, and that no other person or corporation was, either at the time of the passage or acceptance of said ordinance, or long prior thereto, or is now, in a position to furnish water to said city of Helena for the purposes specified in said ordinance.

The amended answer to the petition consisted of denials of certain allegations contained therein, certain allegations not now material, and separate defenses in substance as follows: (1) That no bids were ever asked for or received prior to entering into the alleged contract between the said city and said James H. Mills, receiver, predecessor in interest of appellant; that no bids for entering into said alleged contract were ever asked or advertised for as required by the provisions of article 1 of chapter 16, relating to contracts, of the Revised Ordinances of 1897 of said city of Helena; and that when said contract was entered into a contract could have been made with responsible parties, who would have agreed within six months thereafter to supply the said city with water for the purposes mentioned in said ordinance, from sources other than those owned or controlled by the appellant. (2) That at the time the city entered into said contract, and during all of the year 1897, as shown by the last assessment for state and county taxes, the value of the taxable property in the city of Helena did not exceed the sum of $12,656,783, and that it has not at any time since exceeded such sum; that at the time said contract was entered into, and at all times since, the aggregate indebtedness of the city was, and still is, largely in excess of the 3 per centum of the value of the taxable property therein, as shown by all the assessments for state and county taxes made during any of the times mentioned in said petition, and was at all of said times, and still is, in excess of the sum of $516,000. To the amended answer a replication was filed. Defendant moved for judgment on the pleadings, which motion was by the court sustained. From the judgment entered upon said order, this appeal is taken.

Clayberg & Gunn, for appellant.

Edward Horsky, for respondent.

WORD, J. (after stating the facts).

The first question we shall consider is, did the city of Helena, by entering into the contract for a water supply, incur an "indebtedness," within the meaning of that term as it is used in section 6 of article 13 of the constitution of Montana? Section 6 of article 13 of the constitution is as follows: "No city, town, township or school district shall be allowed to become indebted in any manner or for any purpose to an amount, including existing indebtedness, in the aggregate exceeding three per centum of the value of the taxable property therein, to be ascertained by the last assessment for the state and county taxes previous to the incurring of such indebtedness, and all bonds or obligations in excess of such amount given by or on behalf of such city, town, township or school district shall be void: provided, however, that the legislative assembly may extend the limit mentioned in this section, by authorizing municipal corporations to submit the question to a vote of the taxpayers affected thereby, when such increase is necessary to construct a sewerage system or to procure a supply of water for such municipality, which shall own and control said water supply and devote the revenues derived therefrom to the payment of the debt." It is admitted by the pleadings that at the time when the contract between James H. Mills, receiver, and the city of Helena was executed the city of Helena was indebted in a sum in excess of 3 per centum of the assessed valuation of the taxable property in said city, as ascertained by the last assessment prior thereto for state and county taxes. In the court below counsel for defendants took the position that the city, thus indebted by entering into said contract, created an indebtedness, within the prohibition of the constitution. In support of this position, the case of Davenport v. Kleinschmidt, 6 Mont. 502, 13 P. 249, among others, was cited. In view of the fact that the respondents claim that this decision is conclusive of the questions here presented, and inasmuch as the appellant seeks to show that this case has been overruled, or, at least, should not, in the light of the facts here presented, be held to control the decision upon this appeal, we will examine the case of Davenport v. Kleinschmidt, and seek to determine if any of the questions therein decided are the same as those now presented.

The suit of Davenport v. Kleinschmidt was one for a perpetual injunction, brought against the mayor and aldermen of the ...