State v. Gordon

• Decision Date: 08 July 1916
• Docket Number: No. 19668.,19668.
• Citation: 268 Mo. 713,188 S.W. 160
• Parties: STATE ex rel. ST. LOUIS COUNTY et al. v. GORDON, State Auditor.
• Court: Missouri Supreme Court

188 S.W. 160

268 Mo. 713

STATE ex rel. ST. LOUIS COUNTY et al. v. GORDON, State Auditor.

No. 19668.

Supreme Court of Missouri. In Banc.

July 8, 1916.

Original proceeding in mandamus by the State, at the relation of St. Louis County and others, against John P. Gordon, State Auditor. Alternative writ of mandamus quashed.

This is an original proceeding in mandamus, whereby it is sought to compel respondent as state auditor, to register two separate issues of road bonds. These consist of 620 bonds, 100 of which are each of the denomination of $100, and the balance in denominations of $500 and $1,000, respectively, and amounting in the aggregate to the sum of $520,000. These bonds were issued by the county court of St. Louis county under the provisions of Laws of 1907, p. 411, now sections 10520 to 10525, R. S. 1909, both inclusive, pursuant to an election duly held (so far as that issue concerns this case at least), and are part of an aggregate issue of $3,000,000, issuance of which was assented to by the voters of that county at an election held on the 15th day of February, 1916. Upon the determination of the fact that more than two-thirds of the voters had voted in favor of the incurring of a bonded indebtedness of $3,000,000, the county court of St. Louis county made certain orders intending to carry into effect the permission so given. Not deeming it good policy for economy's sake to issue at once the entire sum of $3,000,000 voted, the said county court (hereinafter called simply county court), made an order to issue the two lots of bonds now here in question. This part of the order made by the county court is pertinent to show this purpose as well as for the making clear of another point on which much stress is laid. So much of the order of the county court as illuminates these points, reads thus:

"Whereas, in order to improve or construct the roads already contracted for or about to be contracted for, it is necessary to now issue five hundred twenty thousand ($520,000.00) dollars, road bonds of St. Louis county; and whereas, under the provisions of section 12, article 10, of the Constitution of Missouri, and section 10522 of the Revised Statutes of Missouri, 1909, it is the duty of this court, before or at the time of incurring the indebtedness of five hundred twenty thousand ($520,000.00) dollars by the issuance of said bonds, to provide for the collection of an annual tax sufficient to pay the interest of said indebtedness as it falls due, and also to constitute a sinking fund for the payment of the principal thereof, within twenty (20) years from the time of contracting the same; and whereas, the court is of the opinion that to levy for said purpose, an annual tax of more than one-twentieth of said five hundred twenty thousand ($520,000.00) dollars to constitute a sinking fund for the payment of said bonds at their maturity would be unjust and burdensome to the county and the taxpayers thereof; and whereas, section 10522 of the Revised Statutes of Missouri, 1909, provides that road bonds of all counties shall mature within twenty (20) years after their date and shall contain a provision that they are payable at any time within twenty (20) years upon the call of the county; and whereas, the taxes hereinafter levied will not be sufficient to pay off more than one-twentieth of said five hundred and twenty thousand ($520,000.00) bonds, annually, and whereas, from the evidence in this case the court finds and now declares that the price obtainable for these bonds depends to a large extent upon their date of redemption, and the longer the period of the redemption date the greater is the price obtainable; and whereas, to make all the bonds hereinafter provided for payable at any time within twenty (20) years upon the call of the county when there will be available from the taxes hereinafter levied a sum sufficient to retire only one-twentieth (1/20) of said bonds annually, would result in a loss to the county of the difference in price obtainable for bonds callable at any time and bonds callable at fixed periods; and whereas, the premises considered, to make all the bonds hereinafter provided for payable at any time within twenty (20) years upon the call of the county, would defeat the manifest intention of the Legislature to encourage road building in Missouri by enabling the various counties in the state to obtain the maximum possible price for their bonds:

"Now, therefore, it is hereby ordered that the road bonds of St. Louis county, Missouri, to the amount of five hundred and twenty thousand dollars ($520,000.00) shall be issued without delay, which bonds shall consist of two issues, one of which shall be dated May 1st, 1916, and consist of twenty thousand ($20,000.00) dollars, to be known as `St. Louis County, Missouri, Road Bond Issue Number One,' and the other shall be dated June 1st, 1916, and consist of five hundred thousand ($500,000.00) dollars, to be known as `St. Louis County, Missouri Road Bond Issue Number Two.' Each issue shall mature twenty (20) years from the date of their issuance. The bonds of issue number one shall be numbered from one (1) to one hundred twenty (120) inclusive, and one half (½) of said issue, or ten thousand dollars ($10,000.00) face value of said bonds, shall be in denominations of one hundred dollars ($100.00) and the remainder in denominations of five hundred ($500.00) dollars. All of the bonds of issue number two shall be in denominations of one thousand ($1,000.00) dollars each, and the bonds of said issue shall be numbered from one hundred and twenty-one (121) to six hundred and twenty (620), both numbers inclusive.

"All the bonds of each issue shall bear interest at the rate of four and one half (4½) per centum per annum, payable semiannually, principal and interest to be payable at the Mercantile Trust Company in the city of St. Louis, Missouri, the said bonds shall be signed by the presiding judge of the county court and attested by the clerk and the seal of the county. The coupons attached to all of said bonds shall be executed with the facsimile signature of the presiding judge of the county court.

"Said five hundred twenty thousand ($520,000.00) dollars bonds shall be payable at the times hereinafter stated upon the call of the county and an order of the court made of record and published twice in two (2) newspapers of St. Louis, Missouri, stating the date when the court will order any of said bonds to be paid, and if said order is made three months (3) before the date of payment the interest on said bonds shall stop after such date of payment, provided the county has on hand said date a sufficient amount of money applicable to their payment to pay the same. Calls for any of the bonds of either issue for payment shall be by number, beginning with number one and continuing in consecutive order until the highest number is reached. This court on behalf of St. Louis county, hereby covenants and agrees with the purchasers of any of said five hundred and twenty thousand ($520,000.00) dollars bonds that none of said bonds shall be callable for payment at any time prior to the dates hereinafter stated, and said agreement is hereby expressly made a part of the consideration and a part of the contract, for the purchase price of said bonds, and the county pledges its faith that said agreement will be fully complied with by the county court and by all present and future officials of said county who may be vested by law with authority in regard to said bonds."

Upon the presentation for registration of said two issues of road bonds to the respondent as state auditor, he refused to register the same, contending, not alone in statutory phrase, "that all of the conditions of the laws" (section 1275, R. S. 1909) had not been complied with, but urging that a law passed by a co-ordinate branch of government is constitutionally invalid. Whereupon this original proceeding in mandamus was commenced against respondent by the county of St. Louis, through the relators, who are the present judges of the county court of said county.

The return of the respondent admits all of the facts stated by relators to be true, but sets up as reasons why respondent as such state auditor should not register these bonds: (1) That sections 10520 and 10522, which (with section 10521) confer authority to issue such bonds as are here in question, are unconstitutional and void, for that: (a) Said section 10520 is in violation of section 12, art. 10, of the Constitution of Missouri; (b) likewise in violation of the provisions of section 21, art. 2, of the Constitution; (c) also of section 53 of art. 4, of the Constitution; and (d) of section 1 of the Fourteenth Amendment and of the Fifth Amendment to the Constitution of the United States. (2) That said section 10522 violates section 7, art. 10, of the Constitution of Missouri, in that it attempts to exempt bonds of the sort here in question from taxation. (3) That the title of the act of March 19, 1907 (Laws of 1907, p. 411), now the sections here in controversy, is constitutionally insufficient, for that it fails to comply with section 28, art. 4, of the Constitution, in this, that said title does not disclose the contents of sections 10523 and 10524, which are urged as being vital to the act, and (4) that the amounts, tenor, and dates of redemption of the two issues of 620 bonds, aggregating $520,000, offered for registration, are not in compliance with the provisions of the statute, and so for the latter reason, regardless of the other points raised, these issues of bonds are not entitled to be registered.

In passing it may be stated that of the total sum of $3,000,000 voted, only the bonds here in question have ever been issued or ordered by the county court so to be.

To the foregoing return the relators demur, thus leaving the matter at issue upon cold questions of law, all facts pleaded being admitted.

Richard F. Ralph, Pros. Atty., of...