Douglass v. Mayor of Virginia City

5 Nev. 147 | Nev. | 1869

By the Court,

Lewis, C. J.:

On the twelfth day of April, a.d. 1864, the City of Virginia, by its Mayor and Board of Aldermen, leased of the plaintiffs certain rooms in the city for the accommodation of its Common Council, agreeing to pay therefor a monthly rental of two hundred dollars in gold coin. The parties to this lease knowing that the city would probably not be able to pay the rent as it became due, incorporated in the instrument a provision to this effect: That the notes of the city, bearing interest at the rate of five per cent, per month, payable monthly, should be considered and received by the lessors as equivalent to cash. As anticipated, the money was not paid as it became due; consequently, in accordance with this provision of the lease, the notes here sued on were executed in regular form and delivered to the plaintiffs. To the complaint, fully setting out these facts, the city interposed a general demurrer, taking the ground that the corporation, although having the power to enter into the lease, (a fact which is here admitted) had no right or authority to execute these notes. This demurrer was overruled by the Court, and no answer being filed within the time granted for that purpose, judgment was rendered for the plaintiffs in accordance with the prayer of the complaint. From that judgment, and an order subsequently made refusing to correct it, this appeal is taken, the same points, and those only, being made here as in the Court below.

That a municipal, like a trading corporation, may, unless in some way restricted by charter, enter into any contract necessary to enable it to carry out the powers conferred upon it — incur debts and execute and give promissory notes in the discharge of its legitimate powers; or, in other words, that it has the right to adopt all the ordinary or usual means which may be necessary to the full execution or enjoyment of the power expressly given by its charter, is so firmly established by the authorities that at the present day it may be considered an elementary principle of the law of corporations. (Ketchum et als. v. The City of Buffalo, 4 Kernan, 356.) It is admitted that the taking of the lease and the agreement to pay the specified rent, were strictly within the authority conferred upon the defendant, but it is objected that it had no right to give its promissory notes bearing interest for the rent as it became due, counsel arguing that if it had the authority to issue any evidence of indebtedness whatever, it was confined t'o ordinary warrants or scrip, which upon their face bear no interest. We find nothing in the Act incorporating the defendant restricting it to the issuance of any particular kind or character of paper as evidence of its indebtedness. It is true, in the absence of special contract to the contrary, the proper course and the one usually pursued, is to -issue a warrant on the treasury for money payable by the city. However, as in this case it was expressly agreed by the defendant that promissory notes, bearing a certain rate of interest, should be issued to the plaintiffs instead of the ordinary warrants; that agreement should be fully upheld, unless it be found that the defendant had not the authority to make it. Why, it may be very properly asked, if it had the authority to lease the rooms and contract to pay rent for them at the rate of two hundred dollars a month, had it not the right to agree that the rent, if not paid when due, should' draw interest and be evidenced by a promissory note ? Under the rule already announced it certainly had that right, if not in some way restrained by the law of its creation, for the giving of the notes was an ordinary means employed for carrying out a power expressly conferred. Having the authority to lease, it had the right to adopt all the usual means necessary to the complete execution of such authority. In Ketchum v. The City of Buffalo it was held that the power to “ regulate and establish markets” gave to the city the power to purchase market grounds on credit, and to execute its bond, bearing interest at seven per cent, per annum, for the purchase money. We can observe no difference upon principle between that case and this. If the power to establish and regulate markets conferred the right to purchase grounds for that purpose and to execute an interest-bearing bond for the purchase money, so it would seem, upon like reasoning, would the power to rent rooms or buildings for the use of the city authorize the issuance of interest-bearing promissory notes for the rent as it becomes due.

But it is argued for the city that section twenty-three of the charter in fact prohibits it from issuing any evidence of indebtedness whatever unless there was money in the treasury to meet it; and it is not claimed that there was at the time these notes were executed. This conclusion it is claimed is warranted by the last clause of subdivision eighteen of the section which is in this language : “ The Common Council shall not authorize the issuance of, nor shall any city officer issue any scrip or other evidence of debt, or order on the Contingent Fund, unless there be actually cash in the treasury to meet the order or warrant so drawn.”

It appears to us this language simply prohibits the issuance of orders or scrip on the Contingent Fund alone, whilst the city was left at liberty to issue such evidences of indebtedness, or any other kind on the General Fund of the treasury — that is, that the restriction here imposed applies solely to one fund of the treasury — the contingent. Such certainly seems to be the fair and grammatical construction of this clause of' the section. If it were intended to make this prohibition apply to the entire treasury or all the funds, why mention the Contingent Fund .and not the others ? By the arrangement of the language “ scrip ” and “ other evidence of indebtedness,” are as clearly confined to the “ Contingent Fund ” as the word “ order ” — that is, scrip or other evidence of debt could no more be issued upon the Contingent Fund than an order. That the words “ scrip or other evidence of debt ” applies to the treasury generally, and that an order only is prohibited from being issued against the Contingent Fund, thus leaving the defendant free to issue any evidence of debt upon that fund except an order, is in our opinion a proposition which cannot be satisfactorily maintained upon the words of the statute. If the words “ scrip or other evidence of debt,” like the word “ order,” have reference to the Contingent Fund, they do not apply to any other; but if they do not, it must follow that any kind of evidence of debt could be issued against that fund, except such as might be strictly called an order —a proposition which we hardly think will be contended for by counsel. The Legislature having clearly expressed its purpose, and there being no ambiguity in the language, it is not for the Courts to inquire why. the restriction is confined to the Contingent Fund alone. To restrict the prohibition to that particular fund may appear to convict the Legislature of doing a foolish act, but there may have been a very wise and good reason for it, nevertheless, not apparent to us. However, it is not certain that we should not be as reluctant to convict that body of doing an unwise or useless act, as of utter inability to express its intentions in grammatical English. We conclude upon this point that the prohibition is exclusively confined to the Contingent Fund, and as the notes here sued on were not drawn on or made payable out of that fund they were not improperly issued.

Again: It is argued, that as the twenty-first subdivision of the section already referred to limits the interest to be paid on certain bonds therein authorized to be issued to twelve per cent., it is by implication a denial of the right to pay a higher rate upon any other character of indebtedness. The correct rule of interpretation, we think, authorizes an entirely different conclusion. The Legislature having limited the amount of interest to be paid on one peculiar character of paper authorized to be issued by the city, it must be presumed that upon all other kinds no limitation was intended. Such is certainly the rule generally adopted, and we see no reason why it should not apply here.

The judgment must be affirmed.