State v. Wilder

• Decision Date: 01 June 1906
• Citation: 197 Mo. 1,94 S.W. 495
• Parties: STATE ex rel. CITY OF COLUMBIA v. WILDER. State Auditor.
• Court: Missouri Supreme Court

94 S.W. 495

197 Mo. 1

STATE ex rel. CITY OF COLUMBIA v. WILDER. State Auditor.

Supreme Court of Missouri.

June 1, 1906.

MUNICIPAL CORPORATIONS—BONDS—ISSUANCE —DEBT LIMIT.

Const. 1875, art. 10, § 12, provides that no city or town shall incur any indebtedness to an amount "including existing indebtedness in the aggregate exceeding five per centum of the value of the taxable property therein." Section 12a refers to section 12, and declares that any city in the state containing not more than 30,000 or less than 2,000 may, with the assent of two-thirds of the voters thereof, etc., be allowed to become indebted in an amount not exceeding an additional "five per centum" on the value of the taxable property therein, for the purpose of purchasing or constructing waterworks and light plants to be owned exclusively by the municipality. Held, that where a city of the third class, with 8,000 population and taxable property amounting to $2,462,050, had a bonded indebtedness of $140,700, of which $110,000 had been issued for waterworks and an electric light plant owned by the city, the latter amount should be counted in determining whether a subsequent proposed bond issue of $10,000 for sewers was within the city's debt limit.

Brace, C. J., and Valliant and Lamm, JJ., dissenting.

In Banc. Mandamus by the state, on relation of the city of Columbia, against William W. Wilder, State Auditor. Writ denied.

W. H. Rothwell, H. D. Murry, and Silver & Brown, for relator. The Attorney General and N. T. Gentry, for respondent.

GANTT, J.

This is an original proceeding in this court to obtain a peremptory writ of mandamus compelling the respondent, the State Auditor, to register certain sewer bonds to the amount of $10,000 which the city of Columbia has presented to him for registration, and which he has refused to register. The undisputed facts are that the city of Columbia is a municipal corporation, organized under the general laws of the state, a city of the third class, and has a population of nearly 8,000. According to the last previous assessment, the assessed valuation of the taxable property in said city amounts to $2,462,050. At the present time, and at the time of holding a special election, hereinafter referred to, the bonded indebtedness of said city was $140,700. Of this indebtedness bonds to the amount of $110,000 were issued in payment for waterworks and electric light plant, which were to be owned by said city. All of said water and light bonds were issued on April 1, 1904, except $10,000 worth, which were issued October 2, 1905. On July 21, 1905, an ordinance of the city was passed and approved having for its purpose the incurring of an additional bonded debt of $10,000, for the purpose of constructing sewers in the said city. The bonds were to mature in 15 years, payable at the option of the city in five years, and to bear not more than 5 per cent. The proposition was submitted in due form to a vote of the people at a special election held on August 8, 1905, and received the assent of more than two-thirds of the voters. The city authorities, in accordance with law, afterwards declared by ordinance that said proposition had been declared in favor of the issuance of said bonds. Thereafter the bonds in question were prepared and presented to the respondent, the State Auditor, and he refused to register them because they were in excess of the power of the city to become indebted, and this proceeding, as already said, is to require him to register the said bonds.

Section 12 of article 10 of the Constitution of Missouri of 1875 provides: "No county, city, town or township, school district or other political corporation or subdivision of the state shall be allowed to become indebted in any manner or for any purpose to an amount exceeding in any year the income or value provided for such year, without the assent of two-thirds of the voters thereof voting at an election to be held for that purpose; nor in cases requiring such assent shall any indebtedness be allowed to be incurred to an amount including existing indebtedness in the aggregate exceeding five per centum on the value of the taxable property therein to be ascertained by the assessment next before the last assessment for city and county purposes previous to the incurring of such indebtedness, provided that with such assent any county may be allowed to become indebted to a larger amount for the erection of a courthouse or jail. And provided further that any county, city, town, township, school district or other political corporation or subdivision of the state incurring any indebtedness requiring the assent of the voters as aforesaid shall before or at the time of doing so provide for the collection of an annual tax sufficient to pay the interest of such indebtedness as it falls due, and also to constitute a sinking fund for payment of the principal thereof within twenty years from the time of contracting the same." At the general election held in this state in November, 1902, another section, designated as section 12a, was added to the Constitution. Said amendment to the Constitution is as follows: Section 12a: "Any city in this state containing not more than thirty thousand (30,000) nor less than two thousand (2,000) inhabitants may with the assent of two-thirds of the voters thereof voting at an election to be held for that purpose be allowed to become indebted in a larger amount than specified in section 12 of article 10 of the Constitution of this state, not exceeding an additional five per centum on the value of the taxable property therein for the purpose of purchasing or constructing waterworks, electric or other light plants to be owned exclusively by the city so purchasing or constructing the same," with the same proviso, practically, as that contained in the original section 12, article 10 of the Constitution in regard to the providing for annual tax to pay the interest and to constitute a sinking fund for the payment of the principal. Laws Mo. 1901, pp. 268, 269; Laws Mo. 1905, pp. 324, 325.

As the bonds which the Auditor refused to register were not issued for the purpose of constructing waterworks, electric or other light plant to be owned by the city, they do not fall within the provisions of section 12a of the Constitution, so that the only question presented is whether the bonded indebtedness to the amount of $110,000, which was contracted in payment of the water and light plant in 1904, is to be included in determining what is the 5 per cent. limit of said city's indebtedness. It is insisted by the city that it should not be taken into account in determining the amount of its indebtedness at the time the bonds to the amount of $10,000 were voted and issued for the purpose of constructing sewers in the city. Including the $110,000 or bonded indebtedness, the total indebtedness of the city, when the bonds which the city now seeks to have registered were voted and issued, was $140,700, and 5 per centum on the value of the taxable property in said city, to wit, $2,462,050, was $123,102.50, so that it is evident that if the $110,000 of bonds constituted a part of the indebtedness of the city within the meaning of section 12 of article 10 of the Constitution, there was no authority for incurring this additional indebtedness of $10,000 because the 5 per centum on the assessed value had already been exceeded. But it is insisted by the learned counsel for relator that by excluding the bonds for the $110,000 from the total indebtedness of $140,700, and adding the $10,000 of the proposed bond issue to the indebtedness incurred previous to the issuing of the $110,000 bonds, this issue of $10,000 of bonds is kept within the 5 per cent. limitation and the entire bonded indebtedness is within the 10 per cent. limit provided in section 12a of the Constitution as amended in 1902, and that therefore the city had the right to have these $10,000 bonds registered. And it is argued that if the city had, before it issued this $110,000 of bonds for waterworks and electric light plant, issued this $10,000 of bonds for the purpose of constructing sewers, the $10,000 of bonds thus added to the then pre-existing debt would have made the indebtedness incurred up to that time only $40,700, and it would have been perfectly lawful for the city to have then voted and issued the $110,000 of bonds under the provisions of section 12a of article 10 of the Constitution, as amended in 1902, and that therefore the fact that the $110,000 of water bonds were first issued will not deprive the city of the privilege the amendment of 1902 was intending to confer upon it, and hence the $110,000 of bonds is not to be taken into account in estimating the then existing indebtedness. In consideration of these respective contentions on the part of the Auditor and the city, it is obvious, we think, that section 12 of article 10 of the Constitution, and section 12a of the amendment thereto in 1902, must be read together, being in pari materia, and the amendment being evidently intended to...