19 Mont. 61 | Mont. | 1896
The first question presented by this appeal is as to whether the issuing and sale of new bonds in the sum of §161,500 by the city for the purpose of refunding a like amount of old bonds of the city, creates a new debt. The only objection urged by appellant to such proposed action by the city is that an additional debt will be created thereby.
This court, in Hotchkiss v. Marion et al. 12 Mont. 218, held that the funding of an existing indebtedness by the issuance of bonds did not create a new or additional indebtedness, but that the form of the liability of a county was only changed thereby. In that case this question is fully discussed, and, we think, the proper conclusion reached. We think that case is decisive of the question raised here.
The respondents contend that in any view of the case the city can issue bonds in the sum of §168,204, for the purpose of funding a like amount of city warrants now outstanding.
Upon this showing and these concessions, we think the city may lawfully fund, the warrants of the city by issuing its bonds to the amount of $168,204, provided said warrants were issued for indebtedness incurred under the assessment of 1892, if warrants to that amount remain now unpaid. This is in accordance with the views expressed in Hotchkiss v. Marion, supra. These warrants remaining unpaid should be funded according to the date of their issue.
The important question that arises on this appeal is as to the authority of the city by ordinance and vote of the electors, at an election held under such ordinance, to take the sewer bonds mentioned in the pleadings, out of the three per cent, limit of indebtedness for ordinary expenses prescribed by the constitution, and place the indebtedness evidenced by such bonds, under the larger limit allowed by the constitution for sewer and water systems, and which larger limit is fixed by section 4800, in subdivision 64 thereof, Political Code, at ten per cent, of the assessed valuation of property, as the maximum amount of indebtedness the city can incur for such sewer and water systems, when the same shall be necessary to construct such system or systems, and after the same shall be authorized by vote of the people.
Section 6, Article XIII of the constitution reads as follows :
That part of subdivision 61, section é800 of the Political Code, pertinent to this question, is as follows :
: 1 That an additional indebtedness may be incurred, when necessary, to construct a sewerage system. * * * The additional indebtedness authorized, including all indebtedness heretofore contracted, which is unpaid or outstanding, for the construction of a sewerage system, shall not exceed ten per centum over and above the three per centum heretofore referred to of the total assessed valuation of the taxable propperty of the city, as ascertained by the last assessment for state and county taxes; and provided further, that the above limit of ten per centum shall not be extended unless the question shall have been submitted to a vote of the taxpayers affected thereby and carried in the affirmative by a vote of a majority of said taxpayers who vote at such election.”
It will be observed that the section of the code quoted above is in harmony with the constitutional provision involved. The creation of an indebtedness greater than three per cent, of the assessed value of property within the limits is absolutely forbidden to the city by the constitution and the statute, unless the creation thereof is necessary, and is authorized by a vote
Was it necessa/ry in order to secure a sewerage system or supply of water for the city by ordinance and vote of the people to take these sewer bonds out of the three per cent, limit and place them in the ten per cent, limit, at the time the attempt to do so was made as shown in the statement? We think not. It could not be neeessa/ry, for the city had its sewer system at the time. Suppose, as suggested by counsel for appellant in the argument of the case, that a city which had constructed its sewer system since the adoption of the constitution, and had paid for it out of its general fund, should undertake to vote and place the amount of the cost of its con
‘ ‘ And in the matter before us it is better that we suffer all the inconveniences of a present loss of revenue than that we let go of the constitution for the sake of relief from temporary distresses. The argument of ah inconvenienti must be excluded from all control over the decision.” ' The provisions of the constitution are mandatory and prohibitory, unless by exr press words they are declared to be otherwise. (§ 29, Article III of the Constitution.)
We are, therefore, of the opinion that the city cannot now place the sewer bonds involved in the ten per cent, limit as it has sought to do, and that its attempt to do so Is void.
The cause is remanded to the district court with instructions to enter judgment in accordance with the views’ herein expressed. Remittitur forthwith.