Stern v. City of Fargo

• Decision Date: 19 June 1909
• Citation: 18 N.D. 289,122 N.W. 403
• Parties: STERN v. CITY OF FARGO et al.
• Court: North Dakota Supreme Court

18 N.D. 289

122 N.W. 403

STERN

v.CITY OF FARGO et al.

Supreme Court of North Dakota.

June 19, 1909.

Syllabus by the Court.

Cities have only the following powers:

(a) Those granted in express words.

(b) Those necessarily implied or incident to the powers expressly granted.

(c) Those essential to the declared objects and purposes of the corporation-not simply convenient, but indispensable.

Doubtful claims of power, or doubt or ambiguity in the terms used by the Legislature, are resolved against the corporation.

The Constitution and statutes providing for the issuance of municipal bonds are more strictly construed in actions to prevent their issuance than in actions to prevent their payment after they have been issued and negotiated.

Section 2678, Rev. Codes 1905, in enumerating the powers of cities, among other things provides how and for what purpose bonds may be issued, and requires that the question of issuing bonds for the construction or purchase of waterworks shall be submitted to a vote of the electors of the city, at an election, after 20 days' notice stating, among other things, the purpose for which the bonds are to be issued, and the amount thereof.

Held, that a resolution of a city council, providing for the issuance of $100,000 in bonds, or such part thereof as may be required, and a notice of an election to submit such issuance to the voters, in the same language as the resolution, did not state the amount of bonds to be voted upon, and that without such statement the question of the issuance of bonds is not fairly presented to the electors, who are entitled to know definitely what is proposed in the way of increasing the indebtedness of the city.

The duties of the auditor in issuing the notice of such an election are purely ministerial, and such notice must follow the terms and conditions of the resolution authorizing the election.

The power to authorize the issuance of bonds is vested in the voters, and they cannot delegate such power to the city council.

The object of the notice of election, and the requirement that the amount of the bonds be stated, is to give the voters and taxpayers such information as will enable them to consider, weigh, and discuss the merits of the proposition, and to avail themselves of the opportunity so given to acquire information as to the necessity of the proposed expenditure and the amount of the indebtedness necessary to incur to enable the city council to carry out its plans. When the notice fails to state the amount of indebtedness proposed to be incurred by the issuance of bonds, opportunity is not afforded the voters to inform themselves so as to be able to vote intelligently.

An election for the issuance of bonds, under the provisions of section 183 of the Constitution and section 2678, Rev. Codes 1905, for the construction of part of a waterworks system, on a notice which did not state the amount of the bonds to be issued, is invalid, and the council is not authorized thereby to issue bonds voted.

A resolution of a city council, providing for an election, and a notice of such an election, under section 2678, Rev. Codes 1905, must state the purpose for which it is proposed to issue bonds.

The Legislature, by the provisions which it has made for the issuance of bonds by cities, has not provided for submitting the question of their issuance to the voters in such a manner as to permit only a vote for or against the issuance of bonds for two or more purposes on a single vote.

Under our system of elections, every voter is entitled to the opportunity to vote for or against any question submitted, separately and independently from his vote for or against any other proposition submitted.

The test whether questions submitted include one purpose or more is whether the objects for which bonds are to be issued have a natural or necessary connection with each other; and, if they have not, two purposes cannot be made one by verbal connection.

When the meaning of a statute is doubtful, so that either of two constructions may with propriety be adopted by the court, it is the duty of the court to adopt that construction best calculated to protect the public against fraud and imposition, even though in individual instances such construction may work slight hardship.

The fact that one construction of a statute of doubtful import, if it be conceded that the meaning of the statute in question is doubtful, would admit of the submission of a question devoidof merit in connection with another of unquestioned merit, and the adoption of a weak proposition by reason of its submission in connection with a meritorious one, furnishes a strong reason for the rule of construction stated in paragraph 11, and this reason applies notwithstanding no question is made in this case as to the good faith or merits of either proposition submitted by the city council.

A resolution adopted by the city council, providing for an election to vote on the issuance of bonds, and a notice by the city auditor of such election, which state the purposes of the proposed bond issue to be “to defray the cost of building and constructing a new waterworks pumping station and installing therein a new high duty pump and necessary steam boilers, * * * and for the purpose of installing an electric light plant in connection with said pumping station for furnishing street and other lights and power,” state two purposes and an election held pursuant to such resolution and notice is illegal, and a majority vote in favor of issuing bonds for the purposes stated does not authorize or empower the city council to issue them.

Section 183 of the Constitution, and the statute, provide a debt limit, for general purposes of cities, of 5 per cent., with power to incur additional indebtedness equaling 3 per cent. of the assessed valuation on a two-thirds vote, making a possible indebtedness for general purposes of 8 per cent. It is also provided that a city, when authorized by a majority vote, may increase its indebtedness, not exceeding 4 per cent., without regard to existing indebtedness, for the construction or purchase of waterworks or constructing sewers, and for no other purpose whatever.

Query: Can a city issue bonds for the construction of waterworks or sewers in such a manner as to necessarily include the amount of such bonds in the 5 per cent. or 8 per cent. debt limit provided for ordinary purposes, or must they be issued in such a manner as to be included within the 4 per cent. provision for the construction of waterworks and sewers? If they must be so issued as to admit of their being included within the 4 per cent. special waterworks provision, the connection of an electric light plant, or of any other subject except sewers, with waterworks in the issuance of bonds furnishes an additional reason for holding the proposed issue under consideration illegal.

Appeal from District Court, Cass County; Pollock, Judge.

Action by Max Stern to enjoin the city of Fargo, and the Mayor and Auditor thereof, from issuing bonds voted for the construction of a pumping station and electric light plant. Judgment for defendants, and plaintiff appeals. Reversed, with directions to enter a decree in accordance with a prayer of the complaint.

E. H. Wright, for appellant. W. C. Resser and Engerud, Holt & Frame, for respondents. Andrew Miller, Atty. Gen., for Board of University and School Lands.

SPALDING, J.

Section 130 of the Constitution of this state requires the legislative assembly to restrict the powers of municipal corporations as to levying taxes and assessments, borrowing money and contracting debts, and prohibits the diversion of money raised by taxation, loan, or assessment for any purpose, to any other purpose, except by authority of law. Section 183 provides that the debt of any municipality shall never exceed 5 per centum upon the value of the taxable property therein, but permits any incorporated city, by a two-thirds vote, to increase such indebtedness 3 per cent. on such assessed valuation beyond said 5 per cent. limit, and provides that any incorporated city may become indebted in any amount not exceeding 4 per centum of such assessed valuation, without regard to the existing indebtedness of such city, for the purpose of constructing or purchasing waterworks for furnishing a supply of water to the inhabitants of such city, or for the purpose of constructing sewers, and for no other purpose whatever.

The legislative assembly, in chapter 30 of the Political Code, commencing with section 2632, Rev. Codes 1905, has provided for the organization and incorporation of cities. Article 4 of said chapter, commencing with section 2678, enumerates the general powers of city councils in 78 paragraphs or articles. Paragraph 5 gives it power to borrow money on the credit of the corporation, for corporation purposes, and to issue bonds therefor in such amounts and forms, and on such conditions, as it shall prescribe, and provides that no such city shall become indebted in any manner, or for any purpose, to an amount, including existing indebtedness, exceeding 5 per cent. of the taxable property therein. Then follows the proviso, contained in the section of the Constitution quoted, relating to an increase of such indebtedness, on a two-thirds vote, of 3 per cent., and the further proviso quoted relating to indebtedness in any amount, not exceeding 4 per cent., for the purpose of constructing or purchasing waterworks, with the additional power to issue bonds therefor, and the further proviso that the city, before or at the time of issuing any of the bonds mentioned, or incurring the indebtedness for which the same are to be issued, shall provide for a direct annual tax sufficient to pay the interest on such debt or bonds when it falls due, and to pay and discharge the principal when the same becomes due, and that such provisions shall be irrepealable until such debt is paid. The final paragraph of the section provides ...