Voorhies v. City of Houston

• Decision Date: 23 March 1888
• Citation: 7 S.W. 679
• Parties: VOORHIES <I>et al</I> v. CITY OF HOUSTON.
• Court: Texas Supreme Court

Page 679

7 S.W. 679

VOORHIES et al v. CITY OF HOUSTON.

Supreme Court of Texas.

March 23, 1888.

Appeal from district court, Harris county; JAMES MASTERSON, Judge.

Action brought by Elizabeth Voorhies et al. against the mayor, aldermen, etc., of the city of Houston, to revive a judgment against the city, and to secure a writ of mandamus for the payment of the same. The court dismissed the application, and plaintiffs appeal.

W. C. Oliver, for appellants. Hutcheson, Carrington & Sears, for appellee.

STAYTON, C. J.

This action was brought by appellants to revive a judgment for $13,639.60, interest and costs, rendered in their favor against the appellee in the district court for Harris county on November 29, 1881. They also seek a writ of mandamus to enforce the payment of the judgment to be rendered. The judgment which the appellants seek to revive and enforce was rendered on part-due coupons for interest due on bonds executed July 1, 1876, in pursuance of an ordinance passed December 10, 1875, which was approved by an act of the legislature passed May 30, 1876. At the time the ordinance referred to was passed, the appellee had a large outstanding indebtedness, and the purpose of the ordinance was to consolidate this by taking up the outstanding bonds with bonds authorized by the ordinance to issue. The bonded debts of the city known as the "market-house" and "ship-channel" bonds were not embraced in the outstanding debts which might be replaced by the bonds authorized by the ordinance to issue. The appellants obtained a judgment, which they seek to revive and enforce, on coupons to bonds, issued under the ordinance referred to, in lieu of bonded indebtedness existing before the ordinance was passed. The ordinance provided "that one per cent. on the assessment on the ad valorem taxes of the city shall, and the same is hereby, set apart annually, and specially reserved for the purpose of paying the interest, and creating a sinking fund, for the redemption of the bonds provided for in this ordinance, and before their maturity." The ordinance further provided that any sum in excess of that necessary to meet interest should create a sinking fund for the redemption of the bonds to be issued, which might be invested, when there was as much as $5,000 on hand, in the purchase of bonds of that issue. The ordinance was expressly made a part of the contract with all persons who should accept bonds authorized by it to issue, and nothing had been paid on the judgment sought to be revived, although the tax of 1 per cent. was duly levied for the years 1879-1884, and of this there was outstanding and uncollected the sum of $112,686. The same tax seems to have been levied for subsequent years. There are part-due coupons, on the same series of bonds held by appellants, amounting to $350,000. It is admitted that the sum to be raised by the 1 per cent. tax authorized by the ordinance is insufficient to pay the interest annually on the series of bonds of which appellants' are a part. The city levies a 1 per cent. tax, and applies the proceeds, so far as collected, pro rata upon all its bonded indebtedness, of which there is other than that evidenced by the series of bonds issued under the ordinance before referred to. The only other ad valorem tax levied by the city is a tax of 1 per cent. which it levies and applies to its current expenses which cannot be met through a less tax. It is shown that the city has no means of paying its bonded indebtedness otherwise than through an ad valorem tax, and that it refuses to levy such a tax, for all purposes, in excess of 2 per cent. The petition prayed for a judgment for the sum due on the former judgment, and for a writ of mandamus commanding the municipal corporation to collect the uncollected taxes at once, so far as the same can be done, and out of the collections so made pay the judgment to be rendered, with interest and costs; and, in case enough of the taxes uncollected cannot be collected to satisfy the judgment, that it be commanded forthwith to levy and collect, upon property within the city subject to an ad valorem tax, sufficient to pay the judgment in full. After entering a judgment in favor of appellants for the sum due them on the former judgment, the judgment proceeds as follows: "It further appearing to the court that, at the time of the issuance of the series of bonds on part of which series this suit is brought, the charter of defendant limited its taxing power to two per cent. per annum, and does now so limit it, and it further appearing that said defendant had levied taxes to said limit, the mandamus requiring defendant to levy a special tax sufficient to pay said judgment, interest, and costs, is hereby denied." "And it appearing to the court that there remained uncollected, under the levies of one per cent. laid for the series of bonds of which plaintiffs are a part, for the several years 1879, 1880, 1881, 1882, 1883, and 1884, taxes amounting in the aggregate to the sum of $112,680, and that the same are due and uncollected on account of bond tax, and that plaintiffs' judgment herein of $18,144 is entitled to share pro rata with $350,000 of like series of past-due coupons, the court here now orders, decrees, and directs that said defendant pay at once to said plaintiffs, or their attorney of record, the sum of $5,841.66, being said pro rata, and all costs of suit out of the first moneys collected on account of said tax levies of bond tax for said years 1879, 1880, 1881, 1882, 1883, and 1884, after payment of the judgment this day rendered in cause No. 12,044, in favor of Luther C. Voorhies v. The Mayor, etc., of Houston, the payment of which is hereby decreed to have priority over this judgment." No question exists as to the validity of the debt the appellant seeks to enforce, nor of the inability of the appellee to pay the interest on the series of bonds of which the appellants hold a part, with the interest on its other bonded indebtedness, from a tax of 1 per cent. on the property within the city subject to an ad valorem tax.

The first assignment of error is: "The court erred in holding that the charter of the city of Houston (defendant herein) limited the taxing power of defendant to two per centum per annum ad valorem of the assessed value of the property of said defendant, the debt for which an additional tax levy was sought having been contracted before the adoption of the constitution now in force; because the constitution of the state of Texas, art. 11, § 6, provides, `that counties, cities, and towns are authorized, in such manner as now or may be hereafter provided by law, to levy, assess, and collect the tax necessary to pay the interest, and provide a sinking fund, to satisfy any indebtedness heretofore legally made and undertaken; but such taxes shall be assessed and collected separately from that levied, assessed, and collected for current expenses of municipal governments, and shall, when levied, specify in the act of levying the purposes therefor; and such taxes may be paid in the coupons, bonds, or other indebtedness for payment of which such tax may have been levied.'" The city of Houston was chartered by a special act passed August 2, 1870, and that provides "that it may assess and collect annual and direct tax upon all property, real and personal, situated and being within the limits of the corporation, not exceeding two per cent. ad valorem." It is contended that this fixes the power of the city, and limits it to the assessment of a tax of 2 per cent., beyond which it cannot go without further legislative authorization; and, furthermore, that for no purpose whatever could the legislature legally authorize it to levy a tax exceeding 2½ per cent. This is based on section 5, art. 11, Const., which provides that "cities having more than ten thousand inhabitants may have their charters granted or amended by special act of the legislature, and may levy, assess, and collect such taxes as may be authorized by law; but no tax for any purpose shall ever be lawful for any one year which shall exceed two and one-half per cent. of the taxable property of such city, and no debt shall ever be created by any city unless at the same time provision be made to assess and collect annually a sufficient sum to pay the interest thereon, and create a sinking fund of at least two per cent. thereon." It may be that a city such as is contemplated by this article, whose charter places a limit on the amount of tax it may levy, could not exceed this, and levy to the extent of 2½ per cent., for the purposes contemplated by that article, without some further authorization by law to do so. That such authority might be given by a general...