City of Superior v. Marble Sav. Bank of Rutland

148 F. 7 | 7th Cir. | 1906

SEAMAN, Circuit Judge

(after stating the facts). The bonds involved in this action were issued and sold by the city of Superior, under the authority of subchapter 18 of its charter of 1889 (chapter 152, p. 415, Laws Wis. 1889), as “sewer improvement bonds.” This charter is considered in the opinion filed herewith in White River Savings Bank v. City of Superior (No. 1,196) 148 Fed. 1, but the provisions of chapter 18, upon which recovery was awarded in the present suit, are plainly distinguishable from those found in chapter 16, relating to street improvement bonds. In that opinion, the sections of chapter 16 appear, together with such general provisions of the charter as affect either controversy in reference to the power of the city to incur indebtedness or general obligations, and recapitulation is needless in the present opinion.

Chapter 18 of the charter treats of “Sewers,” and section 201 prescribes the notice to be given, when a contract has been let and amounts chargeable to abutting lots have been determined, “if the common council deems it for the best interest of the property owners affected by the special assessments,” which notice is not substantially different from the form given for street improvements in section 158 of chapter 16. Section 202 authorizes the issue of bonds to cover all special assessments, which the lot owners do not elect to pay under the notice, which “shall specify on their face that they are sewerage bonds, and chargeable only to the particular lots and parcels of land described therein and such other provisions as the council may-think proper to insert.” With the important exception of the language we have italicized in the above quotation, the terms of this section are substantionally like those contained in sections 159 and 160, in chapter 16 for street improvement bonds. ‘

The succeeding provisions are sections 203, 204, and 205, as follows :

“Section 203. Said bonds may be sold by the common council at not less than par value, and the proceeds paid to the sewerage contractor, or the contract may provide that the contractor shall take the bonds as a payment on his contract at their par value with accrued interest.

“Section 204. The city shall pay the principal and interest on said bonds as they fall due, and shall reimburse itself by a tax on the particular lots mentioned in said bonds in the following manner.

“Section 205. The city clerk shall, in each year for five years succeeding the issue of said bonds, enter in the tax-roll as a special tax upon each of the parcels of land mentioned in said bonds, one-fifth of the special assessments as to each said parcel of land with six per cent interest on the whole amount of said special assessment on such parcel of land then unpaid. Said tax shall be treated in all respects as any other city tax, and when collected shall be credited to the sewerage fund of said city.”

Express authority is thus given: (1) to issue the bonds, with "such other provisions as the council may think proper to insert;” (2) to sell them, “at not less than par value” and pay the proceeds to the contractor, except when the contract provides for the contractor to take them; and (3) the city is required to pay principal and interest “as they fall due, and shall reimburse itself” through the special assessments. The purpose to make the bonds, when so issued and sold, general obligations of the city, to accomplish their sale at par value, is unmistakable; and under such legislative intent the authority to that end is ample. Fowler v. City of Superior, 85 Wis. 411, 419, 423, 54 N. W. 800; United States v. Fort Scott, 99 U. S. 152, 157, 160, 25 L. Ed. 348. Under the recitals in the bond, the city cannot now raise objection that funds were not provided to meet such requirement. King v. City of Superior, 117 Fed. 113, 118, 54 C. C. A. 499. The provisions referred to exempt the bonds in suit from the rule of Uncas National Bank v. Superior, 115 Wis. 340, 344, 91 N. W. 1004, referred to in the above mentioned opinion of this court in White River Savings Bank v. City of Supreior, and from the distinctions, as well, upon which we were constrained to pronounce against liability in the last mentioned case.

The judgment of the Circuit Court accordingly is affirmed.