36 P. 293 | Or. | 1894
Opinion by
In Lowell v. Boston, 111 Mass. 460, 15 Am. Rep. 39, the supreme court of Massachusetts, in speaking of bonds which the city of Boston was authorized to issue by an act of the legislature to enable it to raise funds to be loaned to individuals to aid them in rebuilding that portion of the city destroyed by fire in November, eighteen hundred and seventy-two, which act established a sinking fund for the payment of such bonds, to consist of all premiums on the sale of bonds above their par value, of all receipts of interest on loans made over and above the interest paid on such bonds, and of all payments of the loans made under the authority of the act, said: ‘‘The issue of the bonds by the city, whatever provision may be made for their redemption, involves the possible and not improbable consequence of a necessity to provide for their payment by the city. The right to incur the obligation implies the right to raise money by taxation for payment of the bonds; or, what is equivalent, the right to levy a tax for the purposes for which the fund is to be raised by means of the bonds so authorized.” To the
Now, in this case there are no express words in the charter excluding the implication that the bonds to be issued for waterworks may be paid out of the general fund of the city; on the contrary, it clearly appears that the provision of the charter making water rates applicable to the payment of the bonds was only intended as an .additional provision for the payment of the proposed new debt, and not as a denial to the bondholders of the right to resort to the ordinary revenues from which payment of the debts of the city is made. It does not, in express terms, or by implication, import that they were thereby to be precluded from looking to the city for the payment of the debt. By the terms of the act authorizing the bonds it is expressly provided that the city shall “ be held and considered in substance and effect to undertake and promise, in consideration of the premises, to pay to the bearer of each of the said bonds, at the expiration of such time as the council shall prescribe, not exceeding twenty years, the sum named therein, in gold coin of the United States, together with interest thereon in like gold
Now, in this case the matter of erecting or purchasing waterworks is, by the charter of Corvallis, committed to the judgment and discretion of the council, and whether they act wisely or unwisely in so doing, it is not the province of a court of equity to interfere, so long as they exercise such judgment or discretion in good faith ; but the gist of the complaint upon this subject is that they have not exercised their judgment and discretion in such manner, but that arbitrarily, and without regard to the rights of the city or its taxpayers, they have agreed and are about to pay twenty-eight thousand dollars for a plant worth but little more than one third that amount, and wholly inadequate and insufficient for the purpose for which it is intended. Regarding this as true—being admitted by the demurrer—it evidently amounts to a legal fraud, and is such a manifest and gross abuse of power as will be prevented by an injunction at the instance of a taxpayer. Although the acts of the council are not charged to have been fraudulent, and the term fraud is not used in the complaint, facts are stated and alleged which show -such a gross and manifest abuse of discretion, and disregard for the rights of the taxpayer, as amóunt to the same thing. Fraud is not a fact, but a conclusion of law from facts, and the term may not be
Affirmed.