Vill. of East Moline v. Pope

• Decision Date: 22 December 1906
• Citation: 79 N.E. 587,224 Ill. 386
• Parties: VILLAGE OF EAST MOLINE et al. v. POPE.
• Court: Illinois Supreme Court

224 Ill. 386

79 N.E. 587

VILLAGE OF EAST MOLINE et al.

v.POPE.

Supreme Court of Illinois.

Dec. 22, 1906.

Appeal from Circuit Court, Rock Island County; W. H. Gest, Judge.

Bill by Charles H. Pope against the village of East Moline and others. From a judgment in favor of complainant, defendants appeal. appeal. Affirmed.

Wilkin, J., dissenting.

J. B. & J. L. Oakleaf, for appellants.

W. R. Moore, for appellee.

On October 13, 1905, the president and board of trustees of the village of East Moline passed a resolution authorizing its special waterworks committee to advertise for bids for the erection and construction of a system of waterworks. On November 14, 1905, this committee reported that they had advertised for bids, and recommended that the sum of $32,100 be expended for said purpose. A resolution was adopted authorizing the president and clerk to enter into a contract with the parties recommended by the committee. An ordinance was passed providing for the issuing of $35,000 of bonds for the payment of said work, and for levying a tax of not more than 1 cent on the dollar annually on all property within the corporate limits of the village for a period of 15 years. On November 15, 1905, in compliance with the authority vested in them, the president and clerk entered into a contract with E. W. Crellin, W. H. Jackson, and B. N. Moss for the construction of the works, which contract, however, was subject to the approval of the voters of the village at a special election held on Saturday, December 3, 1905. At this election a majority of the votes were cast in favor of the ratification of the said contract. On January 18, 1906, the president and finance committee reported that they had arranged for the sale of the bonds. At the January term, 1906, of the circuit court of Rock Island county, the appellee, Charles H. Pope, filed his bill, in which he set up the above facts, and alleged that he was a citizen and taxpayer of said village; that the village authorities claimed that under an act of the Legislature approved April 19, 1899, in force July 1, 1899 (Hurd's Rev. St. 1905, p. 344, c. 24), they had authority to issue said bonds in addition to the limit of 5 per cent. prescribed by section 12 of article 9 of the Constitution, but that, in truth and in fact, said authorities had no such right; that said act is unconstitutional and void, in that it permits authorities of cities and villages to issue bonds against the tax levied under the act, and against the net revenue, if any, derived from the waterworks constructed under the provisions of the act. The bill further alleged that the assessed value of property in said village for the year 1905 for the state and county purposes was $241,058; that the indebtedness at the time of the passage of said ordinance providing for the issue of said bonds was, and now is, $12,052.90, the full amount allowed by law; that the issuing of said bonds creates an indebtedness against the village which, including existing indebtedness, is and will be in excess of the limit allowed by law, and is in violation of the constitutional provision above cited; that said village authorities claim and pretend that they have lawful right, power, and authority to levy said tax, issue said bonds, make said contract, and also to own, maintain, manage, and control said waterworks and appropriate and expend its money for said purpose; and that they threaten to issue said bonds and do said illegal acts. Walter H. Ammerman, president, Frank, J. Clendenin, clerk, W. A. Wahlgren, treasurer, and the village of East Moline, were made parties defendant, and the prayer of the bill was that they, their agents, or servants be enjoined from levying said tax, certifying to the county clerk of said county the amount of tax levied under said ordinance and from issuing the bonds provided by said ordinance; also from executing the contract for the construction of said waterworks, from constructing the same, from drawing any order on the village treasury for the purpose of paying for the construction or for material furnished, from expending any money for such purpose derived from the levy of said tax or the sale of said bonds, and from signing or issuing orders or warrants for the same. The parties defendant entered their appearance and filed a general demurrer, which was overruled by the court. They elected to stand by their demurrer, and a decree was entered in accordance with the prayer of the bill. To reverse that decree an appeal has been prosecuted to this court.

SCOTT, J. (after stating the facts).

Section 12 of article 9 of the Constitution provides that no municipal corporation shall be allowed to become indebted, in any manner or for any purpose, to any amount, including existing indebtedness, in the aggregate exceeding 5 per centum on the value of the taxable property therein, to be ascertained by the last assessment for state and county taxes previous to the incurring of such indebtedness. This is a limitation on the power of the General Assembly to authorize indebtedness. All legislation in conflict with the said section must yield to its provisions. The purpose of such legislation makes no difference. It may be for the building of waterworks or the erection of libraries, schools, or hospitals; but, if the amount of existing indebtedness of the municipality already exceeds 5 per cent. of the assessed value, the legislation is in conflict with this constitutional provision, and void. It will be observed, however, that the provision does not place a limitation upon the amount or rate of taxes to be raised, but merely upon the amount of indebtedness to be incurred. In 1899 the General Assembly passed a statute for the purpose of enabling cities and villages to secure the benefits of waterworks. This act was amended in 1905, and section 1 provides (Hurd's Rev. St. 1905, p. 344) that cities and villages shall have the power to levy, in addition to the taxes now authorized by law, a direct annual tax of not more than 1 cent on the dollar upon all the property within its corporate limits, to be payable yearly for a period of not more than 30 years, for the sole purpose of purchasing, constructing, or enlarging waterworks. Sections 2 and 3 provide for the making of the contract and the submission of the same to a vote of the people for ratification. Section 5 provides that the municipal authorities shall have the power to issue bonds against the tax levy, the same to by payable only out of the special tax when collected and out of the net revenue derived from the operation of the works, which bonds are to draw interest at the rate of 6 per cent., and be used for the purposes specified. Section 7 provides for the form of the bond, and contains this provision: ‘This bond * * * is payable solely out of funds derived from special tax levy and net revenue of the waterworks of the city, * * * and out of no other fund.’ These are the provisions of the statute under which it was sought by the village of East Moline to pass the ordinance and erect the waterworks.

It is admitted by the pleadings that at the time this ordinance was passed the village was indebted to the full amount of 5 per cent. of its assessed valuation, as provided in the Constitution. It seems to be conceded that if this 1 per centum tax had been levied for the purpose of creating a sinking fund out of which the waterworks was to be built, and no bonds were to be issued, the ordinance would be valid and not in conflict with the constitutional limitation, for the reason that the constitutional limitation is not against the rate of taxation, but against the amount of indebtedness. But it is insisted by appellee that the issuing of the bonds will create an...