Street v. Town of Ripley

• Citation: 173 Miss. 225,161 So. 855
• Decision Date: 10 June 1935
• Docket Number: 31801
• Court: United States State Supreme Court of Mississippi
• Parties: STREET v. TOWN OF RIPLEY

161 So. 855

173 Miss. 225

STREET v. TOWN OF RIPLEY

No. 31801

Supreme Court of Mississippi

June 10, 1935

Division A

1. MUNICIPAL CORPORATIONS.

Statute authorizing proceedings for validation of municipal bonds wherein bonds were defined as every form of written obligation that may be now or hereafter legally issued by any municipality held to include validation proceedings for bonds issued by municipality for purchase and maintenance of municipal waterworks, notwithstanding bonds were payable solely out of revenues from such enterprise (Code 1930 section 312 et seq.; Laws 1934, chapter 317).

2. MUNICIPAL CORPORATIONS.

Main purpose of statutory proceedings for validation of bonds issued by municipality is to provide a forum and course of legal procedure to which a political district or subdivision may resort for the purpose of having the validity of the proposed bonds finally determined and adjudicated in advance of their issuance.

3. MUNICIPAL CORPORATIONS.

Validation statute requiring notice of proceedings to be given only to taxpayers held to require notice to taxpayers of proceedings to validate issuance of bonds for purchase and maintenance of municipal waterworks, notwithstanding bonds were to be paid solely from revenue from waterworks, since taxpayers were entitled to opportunity to determine whether their financial interests would be affected by proposal (Code 1930, section 312 et seq.; Laws 1934, chapter 317).

4. MUNICIPAL CORPORATIONS.

Under statute authorizing proceedings before chancery court for validation of municipal bond issue and wherein bond was described as every form of written obligation legally issued by any municipality, chancery court had jurisdiction to entertain proceedings for validation of bonds issued by municipality for purchase and maintenance of municipal waterworks, notwithstanding bonds were to be paid solely by revenue from waterworks (Code 1930, section 312 et seq.; Laws 1934, chapter 317).

5. MUNICIPAL CORPORATIONS.

Where taxpayers were given notice of proceedings for validation of bonds issued for purchase and maintenance of municipal waterworks and municipality was made party to proceeding, all necessary parties were properly joined (Code 1930, section 312 et seq.; Laws 1934, chapter 317).

6. MUNICIPAL CORPORATIONS.

Validity of provision in bond ordinance providing for issuance of bonds for purchase and maintenance of municipal waterworks which obligated municipality to pay into a sinking fund a fixed sum as reasonable value of fire protection derived from given number of hydrants could be determined in validation proceedings, since questions to be decided in proceedings extended to any question touching validity of bonds (Code 1930, section 312 et seq.; Laws 1934, chapter 317).

7. MUNICIPAL CORPORATIONS.

In determining proper net revenue of a municipal enterprise, a municipality in its governmental capacity may make payments to itself in a proprietary capacity reasonable cost of services rendered by enterprise to municipality in the discharge of its governmental functions.

8. MUNICIPAL CORPORATIONS.

Municipality could issue bonds for purchase and maintenance of municipal waterworks payable serially over period of twenty-five years and municipality's right to contract to pay for service in aid of maintenance of sinking fund for retirement of bonds was coextensive with right to issue bonds (Code 1930, section 312 et seq.; Laws 1934, chapter 317).

HON. N R. SLEDGE, Chancellor.

APPEAL from chancery court of Tippah county, HON. N. R. SLEDGE, Chancellor.

Proceeding by O. F. Street against the Town of Ripley. From an adverse decree, plaintiff appeals. Affirmed.

Affirmed.

Oscar F. Street, of Ripley, for appellant.

If this waterworks revenue bond is not such a class of bond as contemplated by chapter 10 of the 1930 Code, then the court had no jurisdiction to entertain this proceeding.

The court had no jurisdiction of the subject-matter and certainly if it had no jurisdiction of the subject-matter as a whole, it would be without jurisdiction as to any part thereof.

Love v. Mayor and Board of Commissioners of Yazoo City, 138 So. 600; West Point v. Hawkins, 145 So. 345.

It is a well established principle of the law that no municipality has any authority to enter into any agreement or covenant unless it is authorized by the expressed provision of statute or necessary implication.

S. N. Ayres, Jr., of Ripley, for appellee.

We concede that the proceeding to validate bonds in this case was instituted under chapter 10, Code of 1930, and unless that statute vests jurisdiction of the subject-matter in the chancery court then neither that nor any other court has jurisdiction thereof.

The gist of the argument of the appellant on this point is that the bonds under consideration are not general obligations of the town but are payable solely from a special fund which is a novel type of municipal obligation in Mississippi, wholly unknown in Mississippi law at the time chapter 10, Code of 1930, was enacted. We do not believe that the purpose of chapter 10, Code of 1930, is so limited.

We submit that the plain intent and meaning of section 315, Code of 1930, is to broaden the meaning of the word "bonds" so as to include every form of obligation which the Legislature might thereafter authorize any municipality to issue whether payable from taxes or from some other and special fund. It was certainly not intended to limit the meaning to obligations such as were then authorized to be issued, and the words "every form of written obligation that may be now or hereafter legally issued" can hardly be given any meaning unless they include bonds of the character now before the court.

State ex rel. Divers v. City of Miami, 152 So. 6; State v. Citrus County, 157 So. 4.

The town of Ripley is undoubtedly a party to the proceeding. The entire validation proceeding is instituted for the purpose of testing its authority to issue the bonds and the validity of the proceedings taken therefor. The state of Mississippi is a party complainant with the town of Ripley.

Section 312, Code of 1930.

The taxpayers of the town of Ripley have been summoned by publication of notice as provided by section 313, Code of 1930, and so are parties defendant.

Love v. Yazoo City, 138 So. 600.

The bonds in this case are being issued under authority of chapter 317, Laws of 1934.

The United States of America is authorized to enter into this agreement by the National Industrial Recovery Act. The town of Ripley is authorized to enter into this agreement by section 2 (f) of chapter 317, Laws of 1934.

The ordinance provides that the town shall maintain and operate the system entirely separate and distinct from all of its other affairs just as though the waterworks system were owned and operated by a separate and different corporation. This is necessary if the system is to be made self-supporting as is the plain intent of the statute.

Sections 2 (f) and 3, chapter 317, Laws of 1934; Section 2428, Code of 1930; McQuillin, Municipal Corporations (2 Ed.), sec. 1859.

Appellant has contended that even though the town is authorized to make such an agreement still it must be for a reasonable period of time and that twenty-five years is unreasonably long.

No evidence was offered, even if such were competent, to show that the term of the contract is, in fact, unreasonably long. Therefore, we are compelled to rely upon previous decisions of the court.

Dillon, Municipal Corporations (5 Ed.), sec. 1307; Light, Heat & Water Co. v. City of Jackson, 73 Miss. 644, 19 So. 771; Reid v. Trowbridge, 78 Miss. 542, 29 So. 167; Vicksburg v. Waterworks, 202 U.S. 453.

The Supreme Court of Mississippi in the case of Bacot v. Board of Supervisors of Hinds County, 124 Miss. 231, 86 So. 765, held that the Legislature might constitutionally vest the chancery court with jurisdiction to validate bonds before their issuance, citing cases of Lippett v. City of Albany, 131 Ga. 629, 63 S.E. 33; Lassiter v. State, 67 Fla. 240, 64 So. 847; Steen v. Palm Beach County, 85 So. 684.

The present case is clearly an attempt to validate proposed action by the town of Ripley, and so is within the rule announced in the Bacot case.

The question as to whether, granting that the town has the right to contract for fire protection, a twenty-five year period is an unreasonable length of time, has been decided by our court favorable to appellee, in the case of Light, Heat & Water Co. v. City of Jackson, 73 Miss. 598, 19 So. 771, in which case the Supreme Court of Mississippi held that such a contract entered into by the city of Jackson, for a term of twenty years as an inducement to a waterworks company to construct a new waterworks system was not an unreasonable length of time. In that case the court made the point that no person would invest money in constructing a waterworks system, without being assured in advance that the city would take and pay for fire protection over a period of at least twenty years.

Borroum et al. v. Purdy Road Dist., 95 So. 677; Bryant v. Board of Supervisors, Yalobusha County, 98 So. 148; Board of Sup'rs, Prentiss County v. Holley, 106 So. 644; Jackson & E. Ry. Co. v. Burns, 113 So. 908; Von Zondt v. Town of Braxton, 115 So. 557; Love v. Mayor & Bd. of Aldermen, Yazoo City, 138 So. 600; City of West Point v. Hawkins, 145 So. 345; Liddell v. Municipality of Noxapater, 92 So. 631; Dye v. Brewton, Mayor, 80 So. 761.

OPINION

Cook, J.

This is an appeal from a decree of the chancery court of Tippah county validating a proposed issue of revenue bonds, for the purposes of acquiring, improving, operating, and maintaining a waterworks system in and for the town of Ripley.

By chapter 317, Laws of 1934, the...