7 Neb. 270 | Neb. | 1878
This is a suit in equity to enjoin the collection of certain taxes, and is brought into this court upon appeal. The several questions presented for determination will be considered in the order in which they appear in the pleadings.
I. It is complained that certain street bonds, bearing date December 13, 1873, were issued without authority of law and are void, and therefore the taxes levied to pay the same are illegal. These bonds were issued under sub-division XXXYIII of section 31 of the act relating to cities of the second class. It confers on the city council power “ to issue, from time to time, street bonds to contractors, or other persons performing work or furnishing materials in said city, on such terms and in such manner as the council may provide.” It is contended that this subdivision is unconstitutional because it contains no provision restricting the power of taxation as required by section 4, art. YIII of the constitution of 1867'. Gen. Stat., 64. But it will be observed that the constitution does not prescribe the character of the restrictions which shall be imposed on this power of taxation. It is
Section 32 provides that “ before the city can make any contract for building bridges or sidewalks, or for arvy work on streets, or for any other works or improvements, an estimate of the cost thereof shall be .made by the city engineer, and submitted to the council, and no contract shall be entered into for any works or improvements for a price exceeding such estimate”; and by subdivision II, of section 31, for opening, widening, and grading streets, th'e city is limited to a tax not exceeding five mills on the dollar of the assessed -value of real estate within the corporate limits of the city.
These provisions of the act not only limit the power of taxation for grading streets to the estimate made by the city engineer, but also limit the power within five mills on the dollar of the assessed value of real estate. Whether these restrictions will as effectually guard the citizen against abuse of the power as others which might have been imposed, is a question for legislative consideration and not for the courts to determine; and therefore “ it must be inferred that these were all the restrictions the legislature deemed important” or necessary, (Cooley on Const. Lim.,'518,) and “we know of no rights conferred upon the courts to interfere with the exercise of a legislative discretion which the constitution has delegated to the law-making power.” Maloy v. Marietta, 11 Ohio St., 639.
Again, subdivision XXXYIII gives the city council no authority to borrow money on the credit of the city; it merely confers on them the power to issue street bonds to contractors, and therefore the bonds can only
But, again, section 18, art. XYI of the new constitution, which was adopted, declares that: “ If this constitution be adopted, the existing constitution shall cease in all its provisions on the first day of November, A.D. 1875.” The old constitution did, then, cease in all its provisions, and must be considered, except as to transactions past and closed, as if it never existed; therefore, what authoritative effect can it now have in determining the question, whether a statute is or is not constitutional ? It is said that “ the general rules of interpretation are the same,-whether applied to statutes or constitutions.” Sedg. Stat. & Const. L., 19. And in Key v. Goodwin, 4 Moore & Payne, 351, the rule is stated to be that “ a statute repealed is as completely obliterated from the records of Parliament as if it had never passed, and that it must be considered as a law that never existed, except for the purpose of those actions which were commenced, prosecuted, and concluded while it was an existing law.” Johnson v. Hahn, 4 Neb., 146. Ex parte McCardle, 7 Wallace, 514. The statute in question is not, nor is it claimed to be, repugnant to the new constitution.
Subdivision II, section 31, of the “ act to incorporate cities of the second class and define their powers,” authorizes for street improvements assessments on property within the corporate limits of the city, not exceeding five mills on the dollar for any one year. This is the extent of the authority given to levy taxes for street improvements, and the bonds for the street improvements must be paid out of this five mill tax; but in addition to the levy so authorized by law, the city council levied a five mill tax “ for the payment of principal and interest on three street bonds issued for work done on Chicago avenue.” This additional levy for street improvements we think is clearly without authority of law. For, as the authority to levy taxes for street improvements is, by subdivision II, fixed at a certain rate or per centage on the assessed value of property within the city limits, the power to levy other taxes for the same purposes is not to be implied from the fact that there is authority given to provide for a sinking fund to pay at maturity the bonded indebtedness , of the city. Cooley on Taxa
III. It is complained that the city council levied taxes for school purposes largely in excess of the amount authorized by law, and that all such excess of taxes is illegal and void. They levied a tax of twenty-four mills for general school purposes, but distributed the same for raising school funds as follows : For payment on high school furnace bond one-half mill; for payment on high school bonds five and one-half mills; for support of schools five and three-fourths mills; for teachers’ wages four and one-half mills, and for sinking fund seven and three-fourths mills.
Now, section 26 of the act of February 25, 1875, “relating to public schools in cities of the second class,” Laws 1875, p. 208, provides that the “board of education shall annually, during the month of June, report to the city council an estimate of the amount of funds required for the support of the schools for the fiscal year next ensuing, the amount of funds required for the purchase of school sites, the erection and furnishing of school buildings, and the payment of interest upon all school bonds issued for school purposes, and the creation of a sinking fund for the payment of such indebtedness,” and if approved by the council they are required to levy and collect the necessary amount, the same as other taxes. But section 27 provides, “ that the aggregate school tax shall, in no one year, exceed one per cent upon all the taxable property of the district.”
It was, however, urged in the argument for defendants that the limitation upon taxation for school purposes, contained in section 27, refers only to the estimate of funds required for the support of the schools for the fiscal year next ensuing, and that this interpretation of the law may be inferred from sections 29, 30, and 31; but this position is not tenable, because the limitation is general in its operation, and refers with equal force to each one of the subjects mentioned in section 26, and not to any one in particular. Sections 29, 30, and 31 do not modify or affect this limitation, or give any authority to levy and collect any other or additional taxes; they simply provide the mode in which money may be borrowed upon bonds, and for the sinking fund mentioned in section 27.
IY. It is charged that the city council, without any authority of law, by ordinance of June 14, 1873, issued certain bonds to fund indebtedness of the city, and that they have levied a two and one-half mill tax to pay interest on said bonds, and that such tax is illegal and void.
Subdivision XL of section 31 provides: “ For issuing bonds for the purpose of funding any and all indebted
But subdivision XXXIX, which confers power “ to borrow money on the credit of the city, and pledge the credit, revenue, and property of the city for the payment thereof,” provides that no such money shall be borrowed “ until the city council shall be instructed so to do by a majority of all tlm votes cast at an election held in such city for that purpose.” Here is a complete restraint upon the power to borrow money until the council shall be instructed so to do by the majority of the votes cast at an election held for that purpose. It is therefore very clear that the legislature has made an obvious distinction between the power to issue funding bonds and the power to borrow money on the credit of the city. In the one case it has delegated the power to issue bonds without a vote of the people, and in the other it has required such vote before such power can be exercised at all.
It is not the province of the courts to. pronounce such legislation, in regard to the powers of municipal corporations, void, because it may deem it imperfect or impolitic, for it is alone the province of the legislature to pass laws for the incorporation of cities and define their powers and duties; and for an abuse of this legislative discretion the' only remedy is by an appeal to the legislature itself, unless the party complaining can rest his case upon some prohibition of the constitution, or some right secured by that instrument. Turner v. Althaus et al, supra.
But a different and more important question is pre
The proviso in question, it seems from the general language employed, must be construed as'an independent proposition, which relates to the entire bonded debt, and is for the purpose of preventing an abuse of the taxing power. And if this restriction can be disregarded by the council, then the bonded debt of the city might be increased without limit, and by consequence taxation may be so increased as to become an intolerable burden, without remedy. This can be done by contracting debts in various ways, and by issuing funding bonds for such debts. But I think the proviso is a complete restriction on the power to issue such bonds; and it is a familiar principle that the officers of a municipal corporation cannot bind the municipality beyond the limits of the powers expressly granted.
It- is said that “ a corporate body is constituted of all the inhabitants within the corporate limits. The in
Prof. Dwight- in his note to the case of Gould v. Sterling, 1 Am. L. Reg., 290, very justly observes that: “It seems very clear that no representations by an agent can ever establish the fact of an agency. * * If a person who is notin fact authorized represents that he has power to execute a promissory note for another, the instrument, so far as the supposed principal is concerned, is utterly void. The negotiability of the note will have no effect upon the question, as the inquiry turns upon the existence of the note itself. The term ‘ negotiability ’ presupposes the existence of an instrument made by a person having capacity and power to contract in that particular manner. * * * An agent can no more enlarge his powers by means of unauthorized representations than he can create them.” And in the same case Justice Selden says that: “ One who takes a negotiable promissory note or bill of exchange, pur- • porting to be made by an agent, is bound to inquire as to the power of the agent.” This principle applies to municipal officers, because they are only the agents of the corporators; and it is said in respect of them: “The true rule is, that the want of corporate power, or the want of authority in the municipal officers, cannot be supplied by their unauthorized acts or representations.” Therefore, when they transcend the exact limits of the power granted, their act is inoperative and absolutely void. It is without authority. And in The Town
Now, the record shows (and it is not controverted) that when the council, on the fourteenth of June, 1873, passed the ordinance to issue the bonds, the bonded debt of the city was then in excess of the twenty per cent of the value of the real estate of the city, according to the assessment of the preceding year. Therefore there was a total want of authority in the municipal officers of the city, acting as agents of the corporators, to issue the bonds. And having transcended the limits of the power granted, the bonds issued under this ordinance derive no force from the fact of their being negotiable in form; the act was unauthorized and inoperative, and the bonds are simply void.
The additional five-mill tax for street improvements; all the taxes for school purposes in excess of one per cent upon all the taxable property in the district, and the two and one-half mill tax to pay interest upon the funding bonds, levied for the year 1876, and also the three mill tax to pay interest on funding bonds; the taxes for school purposes in excess of one per cent upon the taxable property of the district; and the additional five mill tax for street improvements for the year 1877, must be enjoined and the injunction made perpetual; but as to all other taxes, the collection of which is asked to be enjoined by the plaintiffs in their petition, the injunction is dissolved and the petition dismissed. And it is further decreed that the bonds issued under the ordinance of June 14, 1873, in excess of the twenty per cent of the value of the real estate of the district, are void.
Decree accordingly.