Vallelly v. Bd. of Park Com'rs of Park Dist. of Grand Forks

• Decision Date: 20 February 1907
• Citation: 16 N.D. 25,111 N.W. 615
• Parties: VALLELLY et al. v. BOARD OF PARK COM'RS OF PARK DISTRICT OF CITY OF GRAND FORKS et al.
• Court: North Dakota Supreme Court

16 N.D. 25

111 N.W. 615

VALLELLY et al.

v.BOARD OF PARK COM'RS OF PARK DISTRICT OF CITY OF GRAND FORKS et al.

Supreme Court of North Dakota.

Feb. 20, 1907.

Syllabus by the Court.

Debts of a city contracted for paving and sewer purposes are not to be computed in ascertaining whether the debt limit has been exceeded. There is no general liability against the city for such indebtedness, except for the one-fifth portion of the cost of paving.

Bonds issued by an independent school district of the city of Grand Forks are not to be computed as debts of the city in ascertaining whether the debt limit has been exceeded.

A law empowering a city council to determine by a vote whether the city will avail itself of the provisions of the law is not unconstitutional as a delegation to the council of legislative power.

The fact that the 1905 law (Laws 1905, p. 256, c. 143) creates a board to be appointed by the council whose powers over the control and government of parks are the same as those conferred by law upon the city council by former laws, does not render the 1905 law invalid.

A municipality has power to provide for the payment of annual interest on bonds to be issued by it, although the law authorizing the issue of such bonds does not expressly authorize it to make provision for the payment of such bonds or annual interest thereon.

An act of the legislative assembly authorizing a board appointed by the city council without the consent of the people to levy general taxes is unconstitutional as a delegation of legislative power.

Appeal from District Court, Grand Forks County; C. J. Fisk, Judge.

Action by John Vallelly and another against the board of park commissioners of the park district of the city of Grand Forks and others. From an order sustaining a demurrer to the complaint, plaintiffs appeal. Reversed.Geo. A. Bangs, for appellants. Scott Rex, for respondents.

MORGAN, C. J.

This is an action brought to restrain the board of park commissioners of the city of Grand Forks from issuing bonds in the sum of $25,000 to be used for park purposes in said city. The action is brought by the plaintiffs as electors and property owners of said city. The park board commissioners were appointed by the city council of the city of Grand Forks under chapter 143, p. 256, of the Laws of 1905, entitled “An act creating park districts and for the government thereof, creating a board of park commissioners conferring power and authority upon such board and district and providing rules for the government thereof.” Section 1 of said act provides that any incorporated city in the state “may by a two-thirds vote of its council by yeas and nays, at a regular meeting thereof take advantage of the provisions of this act.” Section 2 provides that “any city desiring to take advantage of this act shall do so by ordinance expressing its desire and intent so to do, whereupon the territory embraced in such city shall be deemed and it is hereby declared to be a park district of the state of North Dakota.” Section 3 provides that each park district shall be known as “Park District of the city,” and as such “shall have a seal and perpetual succession with power to sue and be sued; contract and be contracted with; acquire by purchase, gift, devise or otherwise and hold, own, possess and maintain real and personal property in trust for the purpose of parks, boulevards and ways and to exercise all the powers hereinafter designated or which may be hereafter conferred upon it.” The park commission is further empowered by the act to condemn land for park purposes, and is given sole and exclusive authority to maintain, govern, and improve the same and to lay out, grade, pave, or otherwise improve any street in around or through said park and to erect, maintain, and govern all buildings and pleasure grounds in said park; to pass ordinances necessary for the regulation and government of the park and to enforce the same; to levy special assessments on all property specially benefited by the establishment of said park; to appoint such engineers, surveyors, clerks, and other officers, including such police force as may be necessary, and define their duties and fix their compensation; to issue negotiable bonds of the park district in a sum not exceeding 2 per cent. of the value of the taxable property therein situated for the purchase of lands for such park and the improvement thereof, and, upon an affirmative vote of the electors of such district, such bonds may be issued in the aggregate not to exceed 5 per cent. of the assessed value of such property. Section 5, subd. 7 (page 258), provides that the park board shall have power to “levy taxes upon all the property within said district for the purpose of maintaining and improving said parks, boulevards and ways and to defray the expenses of said board.” The indebtedness of the park district is by the act expressly limited to 5 per cent. of the valuation of the assessable property therein. The park commission initiated proceedings to issue $25,000 bonds under the provisions of this act. The plaintiff procured a preliminary injunction restraining it from issuing the bonds. The defendants demurred to the complaint on which the injunctional order was procured, and the trial court sustained the demurrer. The plaintiffs have appealed from the order sustaining the demurrer. The objections urged by the plaintiffs against the law under which the defendants are proceeding and against the contemplated proceedings of the park commission are numerous, and will be considered in the order in which they are presented.

It is first contended that the bonds proposed to be issued will create a debt against the city of Grand Forks in excess of the debt limit. Both parties concede that the proposed indebtedness by the issue of these bonds will be an indebtedness of the city of Grand Forks. Whether it will exceed the debt limit will depend upon the fact whether the debts of the independent school district of the city of Grand Forks and the city indebtedness created by the issuing of paving and sewer bonds or warrants are debts of the city within the meaning of the Constitution limiting the indebtedness to be incurred by cities. It is also conceded that one-fifth of the bonds issued by the city for paving its streets is a city debt proper and to be computed as such in determining what the debts of the city are. The paving and sewerage bonds or warrants were issued under laws authorizing cities to issue such bonds or warrants. These laws expressly provided for the payment of the costs of these improvements by assessments to be made against the property improved, and such assessments, when paid into the treasury, constituted a fund out of which the warrants issued were to be paid. The statute (chapter 41, p. 47, Laws 1897) expressly provided that upon payment by the city of one-fifth of the cost of paying such payment should be considered a full satisfaction of all claims against the city for such paving. The contracts for the paving and sewers expressly stated that the city assumed no liability, and without such provision we are satisfied that the acts under which these improvements were made and the indebtedness incurred cannot be construed, except as to negative such general liability. The contracts having been entered into under these acts, the holders of the warrants can claim no rights thereunder not based on the provisions of these laws. They contracted for a lien and payment out of a particular fund, and cannot claim a general liability unless the city wrongfully diverts this fund. It is generally held that constitutional provisions limiting corporate indebtedness are held not to apply to assessments upon property for improvements. Cooley on Taxation, p. 175; Davis v. Des Moines, 71 Iowa, 500, 32 N. W. 470;Raleigh v. Peace, 110 N. C. 32, 14 S. E. 521, 17 L. R. A. 330.

It is also claimed that the bonded indebtedness of the independent school district of the city of Grand Forks should be included in the computation of the city's indebtedness. The boundaries of this school district are coterminous with the territory embraced in the city. The functions of the school district are entirely separate from those of the city. The scope of the powers of the school district are outside that of the city municipal government proper. It acts independently under express statutory authority, and is in no sense an agent of the city. The indebtedness inhibited by the Constitution is that contracted by the city for its own purposes, and does not refer to the indebtedness of the school district, an independent and distinct corporation organized for a special purpose not within the province of the city government proper. The precedents generally are to that effect. Gray on Limitation of Taxing Power, §§ 2148, 2101; Wilson v. Board, 133 Ill. 443, 27 N. E. 203;Adams v. East River Institute, 136 N. Y. 52, 32 N. E. 622;Hyde v. Ewert, 16 S. D. 133, 91 N. W. 474;Kennebec Water District v. Waterville, 96 Me. 234, 52 Atl. 774;Tuttle v. Polk, 92 Iowa, 433, 60 N. W. 733. There is therefore no force in the contention that the debt limit will be exceeded by the issue of the proposed bonds. Adding the amount of the proposed bonds to the city's present indebtedness, there is still left a considerable sum over and above the aggregate 12 per cent. limit of debts that can be legally imposed upon the city. This would be true even if the park district commissioners were to issue bonds or create an indebtedness equal to 5 per cent. of the valuation of the property; that being the aggregate percentage of indebtedness permitted by the act of 1905.

It is claimed by the appellants that the act is void because it creates a municipal corporation authorized to exercise powers over territory under the control of the city council, and that two corporations cannot exercise the same powers coextensively over the same territory. It is true that the city council...