Town of Warwick v. Rhode Island Hosp. Trust Co.

• Decision Date: 10 February 1916
• Docket Number: No. 4855.,4855.
• Parties: TOWN OF WARWICK v. RHODE ISLAND HOSPITAL TRUST CO.
• Court: Rhode Island Supreme Court

96 A. 508

38 R.I. 517

TOWN OF WARWICK

v. RHODE ISLAND HOSPITAL TRUST CO.

No. 4855.

Supreme Court of Rhode Island.

Feb. 10, 1916.

Case certified from Superior Court, Providence and Bristol Counties.

Action by the Town of Warwick against the Rhode Island Hospital Trust Company. Certified from Superior Court. Question answered and papers remitted.

Harold R. Curtis and Wilson, Gardner & Churchill, all of Providence, for plaintiff. Tillinghast & Collins, Wm. R. Tillinghast, Harold B. Tanner, and James C. Collins, all of Providence, for defendant.

SWEETLAND, J. In the above-entitled case, certain questions of law have been certified by the superior court to this court for determination under the provisions of Gen. Laws, c. 298, § 5.

Under Public Laws, c. 942, passed November 20, 1901, the town of Warwick was authorized to issue bonds of the denomination of $1,000 each to an amount not exceeding $400,000. Section 2 of said act was as follows:

"Sec. 2. At the annual financial town meeting in said town there shall be annually appropriated a sum sufficient to pay the interest due or to become due on said bonds before the next annual financial town meeting, and also a sum to be placed as a sinking fund sufficient for the redemption of said bonds when due, and all premiums arising from the sale of said bonds shall be placed to the credit of said sinking fund."

Pursuant to said act, the town of Warwick issued 400 bonds of the denomination of $1,000 each; and thereafter in each year until 1913 the financial town meeting of said town appropriated a sum sufficient to pay the interest due or to become due on said bonds before the following annual financial town meeting, and also appropriated a sum to be placed as a sinking fund for the redemption of said bonds when due. The sums so annually appropriated to be placed as said sinking fund together with the premiums arising from the sale of said bonds were deposited by the town treasurer of said town with the defendant. The title of said deposit was "Town of Warwick Sinking Fund."

By chapter 1012 of the Public Laws, approved March 14, 1913, the General Assembly divided the town of Warwick into two new towns, one to constitute the town of Warwick and the other to constitute the town of West Warwick. Section 14 of said chapter 1012 of the Public Laws, among other things, provided as follows:

"All debts and liquidated liabilities of the present town of Warwick shall be and remain valid and binding. The Warwick Division Commission, hereinafter created, shall apportion the payment of said debts and liquidated liabilities between the towns of Warwick and West Warwick in proportion to the ratable property in said towns, according to the assessment of taxes last made in the present town of Warwick. Such apportionment shall not bar the holder of such debt or liability against the present town of Warwick from recovering as fully as said holder might have recovered against the present town, but shall be made only for the purpose of determining which town shall be primarily liable for each debt and for establishing a right of recoupment between said towns if the town primarily liable fails to pay any obligation apportioned to it."

Section 16 of said chapter 1012 provided for the appointment by the Governor of a commission of five members to be known as the Warwick Division Commission, and further provided that:

Said "commission shall perform the duties imposed upon it by the provisions of this act, and which is hereby authorized, empowered and directed to do and perform each and every act, necessary and essential to the complete division of the town of Warwick and not otherwise specifically devolved upon any official or person, and the acts of said commission in carrying out the provisions of this act shall be final."

Pursuant to said chapter 1012 of the Public Laws, the Governor of the state of Rhode Island duly appointed the Warwick Division Commission, and said commission proceeded to perform the duties imposed upon it by the act. In its report said commission, among other things, set forth that, of the 400 bonds issued by the former town of Warwick under the authority of said chapter 942 of the Public Laws, said commission had apportioned bonds numbered 1 to 251, both inclusive, to the present town of Warwick, and had apportioned bonds numbered 252 to 400, both inclusive, to the town of West Warwick. Said commission further reported that of said sinking fund, at that time amounting in all to the sum of $106,515.58, said commission had apportioned the sum of $66,799.11 to the present town of Warwick, and had apportioned the sum of $39,716.47 to the town of West Warwick. On August 11, 1914, the town council of the town of Warwick authorized the town treasurer of said town to withdraw from the defendant "the proportional part of the sinking fund of the town of Warwick, 1,932 bonds belonging to the present town of Warwick as the same has been apportioned to said town by the Warwick Division Commission, together with the interest accrued thereon." After the refusal of the defendant to permit such withdrawal, said town council directed the commencement of this suit to recover from the defendant said proportional part of said fund.

Of the questions certified by the superior court to this court for determination, the first is as follows:

"First: Did the Warwick Division Commission created under chapter 1012 of the Public Laws passed by the General Assembly at its January session, 1913, receive authority by and under said act to apportion between the new town of Warwick and the town of West Warwick created by said chapter 1012 the sinking fund established for the bonds of...