193 Mo. 693 | Mo. | 1906
— This is an original proceeding in this court in which the relators ask the court to issue its writ of mandamus commanding and requiring respondents to sign and execute certain refunding bonds as ordered by the school board of the school district of the city of Monroe in the State of Missouri. The facts upon which relators predicate their right to the writ sought in this proceeding are thus stated in the petition :
“Now at this day come relators and leave of court first being had, file their first amended petition and respectfully represent and show to the court that they, along with the respondent R. W. Walker, herein, are the duly elected, qualified and acting members of the school board of the school district of the city of Monroe in the State of Missouri, and that they have been such for many months last past; that the other respondent, Thomas J. Sharp, is the duly appointed, qualified and acting clerk of said school board of the said school district of the city of Monroe, Missouri.
“The relators further state that on July 1, 1892, the said school district, being duly authorized thereto by a vote of more than two-thirds of the qualified voters of the said district, issued bonds of the said district in the amount of $10,000 in the aggregate, bearing-date of July 1, 1892, bearing interest at five per cent
‘ ‘ That the said three issues of bonds amount in the aggregate to $18,000, and constitute the only debt of said district and do not now, and never did since their-issue, exceed five per centum on the value of the tax
“These relators further state that said refunding bonds have been prepared and presented to the said respondents to be signed and executed by them, and the law requires that said bonds be signed and executed by them as the officers of the said board of the said school district, and that the respondents have been requested to sign and execute the said bonds as ordered by the said board, but they have failed and refused, and still fail and refuse to sign and execute the same as ordered by the said board; and these relators say that they and the said school district have no means with which to meet and pay the said bonds heretofore issued by the said district and called as aforesaid for payment, and that they are without remedy in the premises by or
To this petition respondents filed their return and answer, which is as follows:
“Come now the respondents in the above-entitled cause and waive an alternative writ or any service herein, and for answer to the petition in said above-entitled cause, state that they admit each and every allegation therein contained.
“Respondents further answering, admit that the said R. W. Walker voted to refund the outstanding bonds mentioned in relato x*s’ petition.
“Respondents further answering, state that the proposed refunding bonds were to be issued by the school board of said school district, under authority of section 5157, Revised Statutes 1899, as amended by the Laws of 1901, p. 52.
“Respondents further state that they have been advised by legal counsel, and they verily believe, that said refunding bonds, if issued, would be void, because the. said section 5157, Revised Statutes 1899, as amended by Laws of 1901, page 52, and under which, said bonds are issued, is in direct conflict with section 12 of article 10 of the Constitution of Missouri, and therefore invalid.
“Respondents further answering, state that section 12 of article 10 of the Const! tixtion of Missouri*703 clearly prohibits the said school board to suffer the debt evidenced by said present outstanding bonds to remain unpaid for a period of more than twenty years from the date of incurring said debt, and that said present outstanding bonds have already run for a period of more than twelve years, and the said refunding bonds about to be issued do but evidence a renewal of said original debt for a further term of twenty years, making said debt run more than twenty years from the date of incurring it, and that said proposed refunding bonds are therefore prohibited and void.
“Respondents further answering, state that said proposed refunding bonds are void, because section 12 of article 10 of the Constitution of Missouri prescribed that said school board should provide for the collection of an annual tax sufficient to constitute a sinking fund for the payment of the principal of said debt within twenty years from the time of contracting the same.' And if said constitutional provision has been complied with there should now be on hand a sinking fund sufficient to pay more than one-half of said bonds, and at the maturity of said bonds there should be on hand a sinking fund sufficient to retire the whole indebtedness, and hence there could be no reason for said proposed refunding bonds.
“Respondents further answering, state that no authority could be granted by section 5.157, Revised Statutes 1899, as amended by the Laws of 1901, page 52, to the said school board to issue said refunding bonds, because said section 5157 is unconstitutional as above set out.
“Respondents further answering state that they are advised, and that they verily believe, and for the reasons herein mentioned, they will render themselves personally liable in the event they sign and execute said proposed refunding bonds.
“Respondents further answering admit that the matters set forth in said petition are of far more than*704 ordinary magnitude and importance, and that any delay herein would work an irreparable injury to said school district, provided the said proposed refunding bonds would be a valid and subsisting legal obligation, but that the respondents believing said proposed refunding bonds to be void for the reasons herein set forth, join with relators in asking an early adjudication of the matter by this court.
“Defendants having fully answered, therefore pray this court that the writ of mandamus asked for in this cause be denied, and that the petition of the relators be dismissed.”
To this answer relators filed their reply, in the nature of a motion for judgment upon the pleadings, which was as follows:
“Now at this day come the relators and move the court to order a writ of mandamus prayed for by relators upon the allegations in the return and answer of respondents filed in this cause, because the same gives no good and sufficient and legal reason why the said writ ought not to issue, but shows on the face thereof the allegations of relators’ petition are true, and said writ ought to issue.’”
This constitutes the record in this cause, and it is now before us for consideration.
OPINION.
It is apparent that this record presents but one question for solution, that is, the validity of section 5157, Revised Statutes 1899, as amended by Laws 1901, page 52, which substantially provides that municipalities, counties, cities and school districts shall have the right to refund these bonds and extend the time of payment thereof, under a lower rate of interest. There is no dispute about the essential and necessary preliminary steps leading up to the issuance of the original bonds, evidencing the indebtedness of the school dis
Section 5157, so far as it is applicable to the question in controversy in this proceeding, provides that “the various counties in this State for themselves, as well as in behalf of any township or parts of townships for which said counties may have heretofore issued any bonds, and the several cities, villages, incorporated towns and school districts are hereby authorized by their respective county courts, and said cities, villages and incorporated towns by their proper authorities, and the said school districts by their respective school boards, to refund any part or all of their bonded or judgment indebtedness, including bonds, coupons, or any judgment whether based on bonded or other indebtedness at a lower rate of interest, and for that purpose may make, issue, negotiate, sell and deliver renewal or refunding bonds and with the proceeds thereof pay off, redeem and cancel such judgments, or old-bonds as the same are called'for redemption: Provided, that said funding bonds shall not be sold for less than par value thereof, and that in no case shall the
It is insisted by respondents that the act as above indicated is violative of and in contravention of the provisions of section 12 of article 10 of the Constitution of this State. This constitutional provision provides that “no county, city, town, township, school district or other political corporation or subdivision of the State, shall be allowed to become indebted in any manner or for any purpose to an amount exceeding in any year the income and revenue provided for such year, without the assent of two-thirds of the voters thereof voting at an election to be held for that purpose; norm cases requiring such assent shall any indebtedness be allowed to be incurred to an amount, including existing indebtedness, in the aggregate exceeding five per centum on the value of the taxable property therein, to be ascertained by the assessment next before the last
It is made manifest from the terms- employed in this provision of the Constitution that the dominating-thought in the minds of the framers of that instrument was to surround certain municipalities and other subdivisions of the State with constitutional restrictions upon the subject of incurring indebtedness. It is equally clear that it never entered the minds of the framers of the organic law of this State, by the language used in section 12 of article 10 of the Constitution, that after a debt had been incurred in strict compliance with the terms of the Constitution, the General Assembly should be prohibited from enacting appropriate measures -to meet the conditions confronting corporate bodies which had incurred such indebtedness, providing for the extension and settlement of such indebtedness along lines not prohibited by any provision of the Constitution, and which, in view of the conditions surrounding the municipality, would be less burdensome to the taxpayers. This constitutional provision, which was leveled at the creation of debts by municipalities more than at the time within which such debts should be paid, when it undertakes to limit the amount of indebtedness, uses no uncertain terms in doing so; but it expressly prohibits the incurring of a lia
We repeat, that, if the bondholder or any taxpayer should insist upon a compliance with the provisions of the Constitution in respect to levying and collecting the tax to meet the indebtedness, there is an appropriate remedy for compelling such compliance; but we are unwilling to say, the debt being in existence, that the terms of the Constitution furnish an absolute barrier to the enactment of appropriate legislation which permits the creditor and debtor to adjust such indebtedness along lines to meet existing conditions and less burdensome to the taxpayers. At least we are of the opinion that if such inhibition upon the lawmaking power was intended by the framers of that instrument, such intention would have at least been manifested or indicated by reasonably clear and definite terms employed in the instrument.
While we do not mean to be understood as saying that the question of the power of the Legislature to enact section 5157, providing for the refunding of indebtedness of the character indicated in this proceeding, is absolutely without doubt, yet we do mean to say that in the absence in terms of any prohibition of extension of time of payment or of legislation of that character, and in view of the many conditions which might arise concerning the indebtedness permitted by the Constitution, and recognizing the Constitution as an instrument of a practical nature, founded upon the common business of life, it is extremely doubtful if any inhibition in respect to extension of time of payment or refunding the indebtedness, was contemplated by the provisions of the Constitution.
No one can apply that practical and common sense rule of interpretation of constitutional provisions as announced by that eminent and distinguished jurist and
While legislation of the character involved in this proceeding, providing for the refunding of existing indebtedness and issuing renewal bonds, has been upon the statute books of this State for a number of years, yet the precise question, so ably presented by counsel for respondents, involved in this proceeding, has never been in judgment before this court. The Supreme Court of Illinois, however, in Kane v. City of Charleston, 161 Ill. 179, has decided this precise controversy under a constitutional provision nearly identical with ours. In that case, as in the one at bar, the contention was urged that section 12 of article 9, Constitution of Illinois, 1870, put a limit upon the duration of all municipal indebtedness, that every municipal debt created since 1870 must be paid within twenty years, and that bonds issued for the purpose of refund
“It is not pretended that a municipal indebtedness, otherwise legally incurred, ceases to be valid and binding against the municipality upon the expiration of' twenty years from the date of its being contracted. On the contrary, it is conceded that the obligation of the city to pay the $20,000 outstanding bonds still exists, and that it can be compelled to pay the same in full, notwithstanding more than twenty years have intervened since their issue. Conceding this to be true, it must also be admitted that if the holders of those bonds should take no steps to compel their payment, and the city should not voluntarily, by some means, liquidate the same, they would continue to be binding; obligations upon the municipality, and it could be compelled to pay them at any time within the statutory period of limitation. It cannot, therefore, be said that the Constitution ‘puts a limit upon the duration of all municipal indebtedness,’ or that it requires absolutely all such indebtedness to be paid within twenty years.
‘ ‘ The real question in the case is, can the city council, when its power to do so is questioned by a taxpayer, issue its bonds in place of, or to supply means to meet maturing bonds, or for the consolidation or funding of the same, thereby consenting to an extension of the original indebtedness beyond the period of twenty years ? In other words, is clause 6, section 63, of the statute above quoted, void under section 12, article 9, of the Constitution? That that clause of the statute is broad enough in its terms to authorize, and does expressly authorize, the issuing of bonds like those here in question, cannot be, and is not, denied. Does the language of the Constitution, which requires the muni*712 cipal authorities to provide for the collection of a tax sufficient to pay the interest on bonds issued, ‘ and also to pay and discharge the principal thereof within twenty years from the time of contracting the same,’ amount to a limitation upon the power of the Legislature to empower such authorities to refund the indebtedness by issuing other bonds at the expiration of the first period? There is no ground for claiming that this language of the Constitution is an express limitation upon such power of the Legislature, and if held to be such at all, it can only be done by construction or implication. That the language is not mandatory to the extent of affecting the validity of the indebtedness is clear from what we have already said, — that is to say, the mere fact that municipal authorities may fail to levy and collect a sufficient tax to pay the interest and principal within twenty years does not affect the validity or binding force of the indebtedness. By this we do not mean that municipal bonds issued without an attempt to make such provision would necessarily be valid. That question is not involved in this case, because the bill expressly states that the original bonds were issued in strict conformity with the provisions of this section of the Constitution. It is a well-known fact, that however honestly, or even wisely, public officers may attempt to provide, by taxation, a sufficient fund to meet an indebtedness maturing twenty years in the future, that effect will often fail because taxes levied can not always be collected, and because what may seem to be a sufficient levy at the time it is made, may, on account of changes in the valuation of assessable property, prove insufficient. And so we held in City of East St. Louis v. People ex rel., 124 Ill. 655 (following the decision of the Supreme Court of the United States in East St. Louis v. Amy, 120 U. S. 600), that if, at the end of twenty years, the provision first made proves insufficient to pay the whole indebtedness, the municipal authorities can be compelled to levy a sufficient tax upon the taxable*713 property within its jurisdiction to pay a judgment recovered for any part of the indebtedness remaining unpaid.
“It being the duty of the city authorities to provide for the payment of this indebtedness, and being given authority to do so by clause 6, section 63, supra, is there any sufficient reason for holding, by construe-, tion or implication, that the Constitution renders that statute void? We think not. The Constitution does not say that the indebtedness must be paid within twenty years. It does not say that if, from any unforeseen circumstances, the debt, or a part of it, remains due at the expiration of twenty years, without a sufficient fund on hand to pay it, the city council may not provide for an extension of the debt. The principle is elementary, and has been' applied in cases almost without number by this court, that statutes should not be held unconstitutional where any reasonable construction can be given them which will avoid that result, and that they will not be declared void, as in violation of the Constitution, except where the violation is clear and plain. ’ ’
It will be observed by an examination of that case that it was argued, as it is here, that it was the object of the people in adopting the latter clause of section 12 of article 9 of the Constitution of Illinois, which is the same as section 12 of article 10 of the Constitution of this State, to indicate a policy of the State that municipal indebtedness should not be created to extend beyond a period of twenty years. The learned judge in that case, responding to such contention, said: “We are not disposed to dissent from that view. On the contrary, we think an intention that such a limit should be placed upon such indebtedness is sufficiently manifested by the language of the Constitution itself. Nor are we disposed to call in question the wisdom of such provision. Evidently it is the duty, under this Constitution, of every city council, when it contracts a municipal in*714 debtedness, to faithfully and honestly provide for the levy of the tax sufficient to pay it within twenty years. Failing to do so, it could doubtless be compelled to perform that duty. But the question here is, when the attempted discharge of that duty has failed to accomplish its object, what is the remedy? Does the public policy which should have been carried out but was not, take away from the city council the power given it by the Legislature, as provided in paragraph 6, supra? It is also a matter of public interest that oppressive taxation should, as far as possible, be avoided, and if, in the judgment of the city council, the emergency which has here arisen can be met with less inconvenience and with less oppression by issuing bonds bearing the lower rate of interest, to mature in the future, than by levying a tax to be collected in a single year, we see no reason why, from the standpoint of public policy, it might not be allowed to do so. It was said in City of Quincy v. Warfield, 25 Ill. 317: ‘It is true, the provisions of the charter authorizing the issuing of bonds do contemplate that the city council will provide, by taxation, for their payment when due, . . . and establish a sinking fund for that purpose, and doubtless that is the true policy.’ Nevertheless, it was held in that case that the failure to perform that duty did not deprive the city council of the power to issue a new bond in payment of the old, if not prepared to pay it at maturity. ’ ’
Legislation substantially in form as that assailed in this proceeding his been in existence in this State for nearly a quarter of a century, and it is but common knowledge that municipalities and other subdivisions of the State have availed themselves of its provisions and put them into practical operation. Its validity has' been fully recognized by the people, the legal profession and all officials of this State who were required to perform any duty under the provisions of such legislation; hence it is important that we be not unmindful of the repeated admonition to courts, when they are called upon
We have thus indicated our views upon the proposition involved in this proceeding. The respondents, by their return, challenge the constitutionality of section 5157, Revised Statutes, as amended by the Laws of 1901; hence the burden is upon them to show that said section is plainly and clearly in violation of the provisions of the Constitution; having failed to do so and it appearing that all the provisions of law in respect to refunding the bonds heretofore issued, as well as those sought to be issued, in renewal of them, have been complied with, it is therefore ordered that the peremptory writ of mandamus be awarded as prayed for in the petition.