The City of Indianapolis v. Wann

• Decision Date: 13 February 1896
• Docket Number: 17,724
• Citation: 42 N.E. 901,144 Ind. 175
• Parties: The City of Indianapolis v. Wann, Receiver
• Court: Indiana Supreme Court

42 N.E. 901

144 Ind. 175

The City of Indianapolis v. Wann, Receiver

No. 17,724

Supreme Court of Indiana

February 13, 1896

From the Marion Superior Court.

The judgment is reversed and the cause remanded, with instructions to sustain the demurrer to the complaint.

J. E Scott, for appellant.

Herod & Herod and Miller, Winter & Elam, for appellee.

OPINION

McCabe, J.

The appellee, as receiver of the Sun Vapor Street Light Company sued the appellant to recover the sum of $ 552.75 as an installment due from the city for vapor lights furnished it for the month of January, 1895, under the terms of an alleged contract and seeking certain injunctive relief.

The superior court overruled a demurrer to the complaint, and the defendant, appellant, refusing to plead further, judgment was rendered upon demurrer in favor of appellee.

The only error assigned calls in question the ruling upon the demurrer. It appears from the complaint that the executive department of public works of the city, on September 18 1893, entered into contract with the Sun Vapor Street Light Company, by which such company covenanted that it would furnish to said city a certain number of sun vapor street lights for a period of five years from said date at a certain price per light per year, payable in monthly installments and the city covenanted to pay accordingly, and among other things the contract contained the following mutual covenants: "To each of the provisions, conditions and stipulations of this contract, the undersigned, each for itself, hereby covenants, agrees and binds itself, its successors and assigns." Upon the part of the city the contract is executed in the name of the city, by its board of public works, with the city seal affixed, and the contract is also signed by the mayor. It further appears that the appellee was duly appointed receiver of said light company, and as such he had secured the permission of the court appointing him to bring this suit. It is also shown that the monthly installment for which the suit is brought was due and unpaid. The ground on which it was sought to defeat the action in the trial court and to reverse its judgment in this court is, that the contract sued on was and is absolutely void because made in violation of the statute. At the date of the contract the appropriations by the common council to the several executive departments of said city for the current expenses of the fiscal year had not been made.

The prior fiscal year had expired August 31, 1893. For that year the council had, on September 26, 1892, appropriated to the board of public works a certain sum for public light, and by said ordinance said appropriation continued and carried to October 1, 1893, unless the appropriation ordinance for the fiscal year ending August 31, 1894, was sooner passed by the council. The appropriation ordinance for the fiscal year ending August 31, 1894, was passed September 21, 1893, and carried an appropriation to said department for public light of $ 76,000 for said year. So far as appears by the complaint this appropriation was not more than sufficient to meet the expenses during the fiscal year for which the appropriation was made for public light of all kinds, including gas and electric light upon existing contracts then in force. Upon September 18, 1893, being the day and date upon which the contract sued on was entered into, there remained unexpended of the sum appropriated to said department for public lights for the fiscal year ending August 31, 1893, the sum of $ 15,000, which sum was sufficient only to meet the expense of lighting the city by gas, electricity and vapor light for and during the months of September and October, 1893. In other words, the complaint shows that upon the date of the execution of the contract, the appropriation to the department of public works was only sufficient to pay upon existing contracts for the current and succeeding month, and even this sum was not available after October 1, because upon that date the appropriation by its terms lapsed.

Subsequent appropriations were made to the department of public works for public light as appears by the complaint, but at no time did the common council authorize the execution of said contract, or take any action to confirm or approve the same. In the last appropriation ordinance, being exhibit G of the complaint, there is an express provision in section 3 that the appropriation for vapor lights, by item 28, under heading "Department of Public Works," the provision is made that it is not to be taken or deemed as a ratification of any contract heretofore entered into by the department of public works of said city, which may not have been authorized by previous appropriations therefor. It is further shown that the board of public works, on December 19, 1894, notified appellee in writing that said city was not bound by said contract, that the same was illegal, and that it would not pay for any lights furnished under said contract by appellee after December 31, 1894.

The appellee, nevertheless, continued to furnish them for the month of January, 1895, and now seeks in the complaint to recover therefor upon said contract.

The board of public works, by the act commonly known as the city charter for said city, is an executive department of said city government, with certain powers conferred to contract on behalf of the city, subject to certain limitations therein prescribed. R. S. 1894, sections 3812-3819. Among these powers is the power: "To contract for the furnishing of gas, either natural or artificial, water, steam or electricity, light or power, to said city or the citizens thereof, by any company or individual, and in such contract to fix the price to be charged for the same in such city, subject to ordinances of such city, in relation to consumption by private consumers," provided that such powers can only be exercised pursuant to an ordinance specifically directing the same. R. S. 1894, section 3830, top page 359. The board of public works assumed to act under this power in entering into the contract sued on. This power is subject to the limitations expressed in the statute already mentioned, wherein it is provided that: "The legislative authority of the city shall be vested in a common council." R. S. 1894, section 3780.

"All ordinances, orders, resolutions and motions for the government or regulation of such city, and all ordinances for the appropriation of money, shall originate in the common council. No appropriation shall be made for the payment of money, otherwise than by ordinance, specifying by items the amount thereof, and the department for which such appropriation shall be made." R. S. 1894, section 3789.

Sections 50, 51, 52 and 62 of the act read as follows:

"Sec. 50. It shall be the duty of each executive department, before the commencement of each fiscal year, to submit to the joint meeting of the heads of the departments and of the various boards hereinbefore provided for in section 45, an estimate of the amount of money required by their respective departments for the ensuing fiscal year, stating with as great particularity as possible each item thereof. The comptroller shall at the same time submit a statement or estimate of city expenditures for other purposes, for the ensuing year, over and above the moneys proposed to be used by various executive departments, giving with as great particularity as possible each item thereof. After such meeting, and reports and consultation, the city comptroller shall thereupon proceed to revise such estimates for the ensuing year, and the comptroller shall then prepare a report to the mayor of the various estimated amounts required in said comptroller's opinion for each executive department, and for other city expenses, together with an estimate of the necessary per cent. of taxes to be levied. The mayor shall at the next meeting of the common council present such report with such recommendations as he may see fit. It shall be the duty of the committee of finance of said common council thereupon to prepare an ordinance fixing the rate of taxation for the ensuing year, and also an ordinance making appropriations by items for the use of the various executive departments and other city purposes for the ensuing year. Said ordinance may reduce any estimated item for any executive department, from the figure submitted in the report of the city comptroller, but shall not increase the same unless recommended by the mayor. Such appropriation ordinances shall thereafter be promptly acted upon by the common council. If at any time after the passage of such ordinance an emergency shall arise for further appropriations for the use of any department, as certified by such department, as hereinbefore provided, or other purposes during the year, such additional appropriations may be made on the recommendation of the comptroller by a two-thirds vote of the council.

"Sec. 51. No executive department, officer or employe thereof, shall have power to bind such city by any contract, agreement, or in any other way, to any extent beyond the amount of money at the time already appropriated by ordinance for the purpose of such department, and all contracts and agreements, express or implied, and all obligations of any and every sort, beyond such existing appropriations, are declared to be absolutely void.

"Sec. 52. Any city official who shall issue any bond, certificate or warrant for the payment of money which shall purport to be an obligation of such city, and be beyond the unexpended balance of any appropriation made for such purpose, or who shall attempt to bind such city by any contract, agreement, or in any other way, to any extent beyond the amount of money at the time already...