The State ex rel. Clark County v. Hackmann

• Decision Date: 26 January 1920
• Parties: THE STATE ex rel. CLARK COUNTY v. GEORGE E. HACKMANN, State Auditor
• Court: Missouri Supreme Court

218 S.W. 318

280 Mo. 686

THE STATE ex rel. CLARK COUNTY v. GEORGE E. HACKMANN, State Auditor

Supreme Court of Missouri

January 26, 1920

Writ issued.

James H. Talbott, Prosecuting Attorney, for relator; Charles Hiller, T. L. Montgomery and Charles & Rutherford of counsel.

(1) "No county . . . shall be allowed to become indebted in any manner or for any purpose to an amount exceeding in any year the income and revenue provided for such year, without the assent of two-thirds of the voters thereof voting at an election to be held for that purpose." Mo. Constitution sec. 12, art. 10; State ex rel. v. Wilder, 197 Mo 1; Barnard & Co. v. Knox Co., 105 Mo. 382; Mt Grove Bank v. Douglas, 146 Mo. 42; Trask v Livingston Co., 210 Mo. 582; State ex rel. v. Neosho, 203 Mo. 40. (2) Municipal bonds which are valid when issued are not rendered void by the misapplication of the money received from their sale. 19 R. C. L. 1019; Anderson Co. v. Beal, 113 U.S. 227; Cairo v. Zane, 149 U.S. 122; Jones v. Camden, 44 S.C. 319, 51 Am. St. 855; Rose v. Road District, 275 Mo. 603. (3) The Constitution does not specify the purpose for which a county may become indebted. State ex rel. v. Orear, 210 S.W. 392. (4) Taxes may be levied and collected for public purposes only. Mo. Const. sec. 3, art. 10; State ex rel. v. Orear, 210 S.W. 396; State ex rel. v. St. Louis, 216 Mo. 90; Citizens Sav. & Loan Assn. v. Topeka, 20 Wall. 664. (5) The payment of municipal indebtedness is a public and corporate purpose. Stone v. Chicago, 207 Ill. 492; Natl. Ins. Co. v. Mead, 48 L.R.A. (S. D.) 787; State ex rel. v. Orear, 210 S.W. 392; Abbott on Public Securities, sec. 116, p. 250, note 99; City of New Orleans v. Clark, 95 U.S. 644. (6) The meaning of the words "in any manner or for any purpose" as employed in Section 12, Article 10 of the Constitution of Missouri. District of Doon Twp. v. Cummins, 142 U.S. 366, 35 L.Ed. 1047; Council Bluffs v. Steward, 51 Iowa 385; Grant v. Davenport, 36 Iowa 396; McPherson v. Foster, 43 Iowa 48; Mosher v. School Dist., 44 Iowa 122; Bank v. District, 86 Iowa 330; People v. Railroad, 253 Ill. 191; East Moline v. Pope, 224 Ill. 386; Schnell v. Rock Island, 232 Ill. 89; Davis v. County Court, 38 W.Va. 614; French v. Burlington, 42 Iowa 107; Anderson v. Orient Ins. Co., 88 Iowa 579; Spillman v. Parkersburg, 35 W.Va. 614; Brown v. Corey, 175 Pa. 528; Lake Co. Commrs. v. Rollins, 130 U.S. 662, 32 L.Ed. 1062; Litchfield v. Ballou, 114 U.S. 190, 29 L.Ed. 132.; Beard v. Hopkinsville, 23 L.R.A. 402-408, note; Voss v. Water Co., 66 L.R.A. 100; Superior Mfg. Co. v. School Dist., 28 Okla. 293; Springfield v. Edwards, 84 Ill. 626; Trask v. Livingston Co., 210 Mo. 582; State ex rel v. Neosho, 203 Mo. 40. (7) If the proceeds of the sale of the bonds in question are not applied to the payment of the judgments against relator county, then, the power existing to issue them, they will be valid and binding obligations of the county, and its indebtedness will have been increased to the extent of the par value of the bonds. Rose v. Springfield Road Dist., 275 Mo. 603; Anderson Co. v. Beal, 113 U.S. 227; Cairo v. Zane, 149 U.S. 122; Jones v. Camden, 44 S.C. 319. (8) The issuance and sale of refunding bonds creates a new debt and should be included in determining the amount of the debt limit. District of Doon Twp. v. Cummins, 142 U.S. 366, 35 L.Ed. 1044; State ex rel. v. McGraw, 12 Wash. 541; Atkinson v. Ross, 43 Wash. 290; Berkholz v. Dinnie, 6 N.D. 511; Heins v. Lincoln, 102 Iowa 69; Stone v. Chicago, 207 Ill. 492; Edmunson v. School Dist., 98 Iowa 639; Thompson v. School Dist., 102 Iowa 94; Smith v. Ormsby, 20 Wash. 396; Laws 1919, p. 179, sec. 1; Secs. 1249 and 1252, R. S. 1909. (9) The issuance and sale of refunding bonds does not create a new debt, and such bonds should not be taken into account in computing the debt limit of a county. Abbott on Public Securities, sec. 209, p. 431; Board of Commrs. v. Aetna Ins. Co., 90 F. 222; Maish v. Ariz. Ter., 164 U.S. 599; Goeman v. Sinking Fund Commrs., 25 F. 567; Board of Commrs. Lake Co. v. Platt, 79 F. 567; Lyon Co. v. Keene, 100 F. 337; Los Angeles v. Teed, 44 P. 580. (10) A judgment against the State Auditor commanding him to register the bonds in question will conclude all the tax-payers in relator county as to the validity of the bonds and the tax levied to pay the same, and will be res adjudicata. Sec. 1275, R. S. 1909; Ransom v. City of Pierre, 41 C. C. A. 585, 101 F. 665. (11) The several judgments against relator county sought to be funded by the issuance of the bonds in question are conclusive against it as to the validity of the debts merged into the judgments. Haishman v. Knox Co., 122 U.S. 316; State ex rel. v. Rainey, 74 Mo. 234; Scotland Co. v. Hill, 140 U.S. 41; Sec. 2103, R. S. 1909; Sioux City Ry. Co. v. Osceola County, 45 Iowa 168, 52 Iowa 26; Jones v. Hubbard, 193 Mo. 165. (12) That the Legislature has not enacted a special law for the holding of an election such as the one in question, is not material, since the general election laws furnish all the machinery necessary to enable the voters to register their will on the question of incurring the debt here sought to be evidenced by the issuance of bonds. Article 8, Mo. Constitution; Articles 2 and 5, Chap. 43, R. S. 1909. (13) Where an election is authorized by constitutional, statutory or charter provision, and there is no special law providing for the manner of holding and conducting such election, it may be held and conducted under any general law governing elections for counties or municipalities. The inference is that such an election is to be held and conducted in the usual way, when some unusual or different way is not provided. State ex rel. v. M. K. & T. Railroad, 164 Mo. 211; Laws 1919, p. 179, sec. 2; Bank v. Commissioners, 116 N.C. 339, 366; Kimbley v. City of Owensboro, 195 S.W. 1089; O'Bryan v. City of Owensboro, 113 Ky. 680. (14) In the absence of a statutory form of ballot any form of ballot giving the voter full knowledge of the question or proposition involved will be sufficient. Dick v. Scarborough, 73 S.C. 154; Kemp v. City of Hazelhurst, 80 Miss. 447, 467; State ex rel. v. Stauffer, 197 S.W. 251; State ex inf. v. Clardy, 267 Mo. 384, 385; State ex rel. v. Jones, 226 Mo. 199; Evans v. McFarland, 168 Mo. 727; Russell v. Gray, 164 Mo. 95; State ex rel. v. Hackman, 273 Mo. 698. (15) In the absence of a statutory form of notice of an election, one giving full and proper information will be sufficient. Rosebstock v. Supervisors, 112 Miss. 127; Kemp v. Hazelhurst, 80 Miss. 443; Abbott on Pub. Securities, secs. 127, 128. (16) County warrants must be paid out of the revenue of the year of their issuance, and if sufficient revenue is not collected in such year to pay them, then payment must be deferred until such time as there is a surplus in the county treasury after the payment of all the obligations of the year. K. C. Ry. Co. v. Thornton, 152 Mo. 574; State ex rel. v. Payne, 151 Mo. 663; Holloway v. Board of Commrs., 240 Mo. 601; Andrew Co. v. Schell, 135 Mo. 41.

Frank W. McAllister, Attorney-General, and Shrader P. Howell, Assistant Attorney-General, for respondent.

(1) It is the duty of the State Auditor to determine whether there is authority of law for the issuance of the bonds; and, if such exists, whether all the conditions of the Statutes applicable thereto have been complied with in the particular issue presented for registration. Sec. 1275, R. S. 1909; State ex rel. Dexter v. Gordon, 251 Mo. 311; State ex rel. Pike County v. Gordon, 268 Mo. 326; Thornburg v. School District, 175 Mo. 12. Respondent represents the tax payers in the bond issuing county, and may urge any question attacking the validity of the bond issue. Ransom v. City of Pierre, 101 F. 665. (2) It is clearly the intention of the framers of the Constitution to place the public business of the county on a cash basis to limit the ordinary county expenditures to the income and revenue for each year. Sec. 12, Art. 10, Mo. Constitution; Book v. Earl, 87 Mo. 251; Trask v. Livingston Co., 210 Mo. 595; Holliway v. Howell Co., 240 Mo. 613; State ex rel. Christian Co. v. Gordon, 265 Mo. 188. (3) The only manner by which an indebtedness in excess of the income and revenue for any year may be lawfully created is with the assent of two-thirds of the qualified voters voting at an election held for that purpose, as provided by Section 12 of Article 10 of the Constitution. State ex rel. v. Wabash Ry., 169 Mo. 576; Barnard v Knox County, 105 Mo. 388; Anderson v. Ripley Co., 181 Mo. 61; Bank v. Douglass Co., 146 Mo. 56; Decker v. Diemer, 229 Mo. 330; Campbell v. State, 99 P. 778; Beard v. City of Hopkinsville, 95 Ky. 241; Brown v. City of Corry, 175 Penn. 528; 5 McQuillin, Munic. Corp. sec. 2206, p. 4683. (4) Section 12 of Article 10 of the Constitution authorizes a bond issue in excess of the annual current revenue of a county only when a new indebtedness is incurred; and since the instant bond issue does not constitute a new obligation but is merely an attempt to fund an indebtedness theretofore created by the issuance of county warrants, represented by the several judgments herein, the bonds are invalid and void. State ex rel. v. City of Neosho, 203 Mo. 76, 95; 5 McQuillin, Munic. Corp. sec. 2770, p. 4798; City of Poughkeepsie v. Quintard, 136 N.Y. 278; Edmundson v. School Dist., 98 Iowa 645; County Comm. v. Etna Life Ins. Co., 90 F. 222; Abbott's Pub. Sec., sec. 209, p. 431; 1 Dillon, Munic. Corp. sec. 202, p. 379; Geer v. Board, 97 F. 435; City of Los Angeles v. Teed, 112 Cal. 326; Leach v. Comm., 97 Ky. 124; Palmer v. City of Helena, 19 Mont. 67; Wallace v. Camp, 200 Pa. St. 223; Powell v. City of Madison, 107 Ind. 114; Veatch v. City of Moscow, 18 Idaho 317; Lake County v. Standley, 24...