Swain v. Fritchman

SULLIVAN, J.,

Dissenting. — I am unable to concur in the conclusion reached by the majority of the court. I concede that the act known as the Black Law was passed by both houses of the legislature in substantial compliance with the provisions of the constitution in regard to what the journals of the two houses must contain, but that admission alone does not go to the constitutionality of the provisions of the act *802itself; it only goes to the constitutionality of the passage of the act. In Kessler v. Fritchman, ante, p. 30, 119 Pac. 692, the majority of this court held under the provisions of sec. 2 of the Black Law, whereby the mayor is required upon petition to submit the question of organizing as a city under said act to the electors at a “special election,” that the “special election” there referred to means the same as the term “general election” as used in sec. 1 of art. 12 of the constitution, which section requires that a change in the form of municipal government, if made, must be made at a general election. Construing the words “special election” to mean “general election” was the first step by the court in construing away the clear meaning of said act, and further judicial legislation, as I view it, is now indulged in by the majority opinion in order to sustain the constitutionality of said law.

(1) It is provided by said sec. 1, art. 12, of the constitution, that “the legislature shall provide by general laws for the incorporation, organization and classification of the cities and towns in proportion to the population,” and in compliance with said provision, the legislature has classified municipalities into villages, cities of the second class and cities under special charter. It was the evident intention to provide a fourth classification under the Black Law.

The third section of the Black Law provides: “All general laws of the state of Idaho governing or pertaining to such cities and not inconsistent with the provisions of this act, shall apply to and govern cities organized under this act.” It is conceded that there were no general laws of the state of Idaho governing or pertaining to Boise City at the time of the enactment of the Black Law, except sec. 2239, Rev. Codes, which provides that' city councils, etc., of cities, towns and villages theretofore incorporated under special or general laws, or hereafter incorporated, are vested with authority and power to regulate or suppress and prohibit certain criminal acts. Boise City was organized and governed by a special charter, which charter could not be amended or changed by general law. And it is especially provided in said section 3 of the Black Law, “That no provisions of any special charter or other special act *803or law which any such city may be operating under at the time of its becoming organized under this act shall thereafter be applicable to such city while it is operating under the provisions of this act.” It thus clearly appears that if Boise City attempts to organize under the provisions of said Black Law, it would have only the powers granted by said sec. 2239 and the powers granted by the provisions of the Black Law, for under the provisions of said section 3, as above quoted, only the general laws “governing or pertaining” to Boise City and not inconsistent with the Black Law, are made applicable to Boise City after its organization under the Black Law. Sec. 11 of said Black Law provides that “The council shall have and possess, and the mayor and council and its members shall exercise all executive, legislative and judicial power and duties now had, possessed and exercised by the mayor, city council, board of public works, board of library trustees, and other executive and administrative officers in cities, except as hereinafter provided.” And it is thereinafter provided that no provision of any special charter or other special act or law has any application whatever to a city after it is organized under the Black Law. Therefore the mayor and council of Boise City would have no powers or duties imposed by the charter and only have such powers and duties as are imposed by the Black Law.

It appears from the conflicting provisions of the Black Law and its incongruities that it was hastily and carelessly drawn and will require legislation by this court to make it effective.

It will be observed by the adoption of the Black Law, Boise City would be deprived of the rights and powers now exercised under its special charter and essential to the maintenance of municipal government, as no rights and powers other than as above mentioned are conferred by said act upon Boise City for the reason that no general laws are applicable thereto. The Black Law was not intended of itself to be a complete law for municipal government, but had to be supplemented by the general laws by which the city adopting it was governed. Boise City was not under the general laws and was not a city of the second class, and under the law it *804could not become such as it had a population of more than 15.000. It is conceded by the majority of the court that the general laws of the state do not provide for the organization of any cities that have a population exceeding 15,000, but they hold that if a city organized under the general laws continues to grow and acquire a population of more than 15,000, it still operates under the general laws provided for cities of the second class. I concede that, but it must be remembered that Boise City was never under the general laws and that it has grown to a city of perhaps 25,000 inhabitants under its special charter. That being true, it could not now organize under the general law because, as I view it, no city that has a population to exceed 15,000 can organize under the general laws. When it adopted the Black Law, there were no general laws governing or pertaining to Boise City, and only such general laws as govern and pertain to the city at the time it adopts the Black Law are applicable to such city, under sec. 3 of said act. I think the majority of the court evades the real facts of this case when it suggests that a city organized under the general laws, when it acquired a population of more than 15.000, would not be disorganized but would continue. I concede that proposition, but deny that Boise City could have become organized under the general law after it had a population of more than 15,000, and the very fact that the legislature has neglected and failed to provide general laws for the governing of cities of more than 15,000 inhabitants does not justify the court in extending the provisions of the general law for the government of cities of the second class beyond what was intended by the legislature, and thus judicially enacting laws for the government of such cities. After Boise City adopted the commission form of government, it had no power under its charter whatever, and, quoting from sec. 3 of the Black Law, “all general laws of the state of Idaho governing or pertaining to such cities (that is, cities adopting the Black Law) and not inconsistent with the provisions of this act, shall apply to and govern cities organized under this act.” Boise City was not brought under the general laws by the adoption of the Black Law, for the reason that it was in no manner *805governed by the general laws. That being true, this court must legislate in order to bring Boise City under the provisions of the general laws.

The main object or purpose of the Black Law was to make all of the powers of the city council subject at all times to popular referendum. It was to place the mayor and common council in a position so that they could not pass an ordinance and make it effective without referring it to a vote of the people, provided the people so desired. It provides for both the initiative and referendum.

(2) The next point is, Does the Black Law impair the obligation of contracts, and for that reason is it repugnant to the provisions of sec. 10, art. 1, of the federal constitution, which-provides, among other things, that no state shall pass any law impairing the obligation of contracts?

The majority of the court holds that the Black Law does not impair the obligation of contracts. It is admitted that Boise City has a large amount of indebtedness incurred under the provisions of its charter, and the charter provides adequate means whereby the levying and collecting of taxes to pay the interest and principal of such bonds was a duty imposed on the city council and was a duty that the council could be compelled by mandamus to perform. Subd. 10 of sec.- 50 of said charter provides that the proper officers of said city must continue to assess and collect, on all taxable property within the limits thereof, the necessary taxes to pay said bonds and interest as the same become due.

It is a well-settled rule, and clearly stated in Von Hoffman v. City of Quincy, 4 Wall. (U. S.) 535, 18 L. ed. 403, as follows:

‘1 Where a statute has authorized a municipal corporation to issue bonds and to exercise the power of local taxation in order to pay them, and persons have bought and paid value for bonds issued accordingly, the power of taxation thus given is a contract within the meaning of the constitution, and cannot be withdrawn until the contract is satisfied. The state and the corporation in such a case are equally bound. ’ ’

*806There is no conflict of authority upon this point. Under the uniform decisions of the supreme court of the United States, statutory provisions may constitute a contract between the city and its bondholders incapable of impairment at the hands of the legislature. Under the provisions of the Boise City charter the contract rights of the bondholders were clear, specific and adequate. If the mayor and common council failed to levy the necessary taxes, they could be compelled by mandamus to do so. The city having borrowed money and issued its bonds, the legislature had no power to change the situation between the debtor and creditor without at the same time preserving in some way the rights of the contracting parties to enforce such contracts. The legislature might, if it chose, change the form of government of Boise City. It might abolish the office of mayor and council, but if it did that it must vest in some other officers the duty of levying the necessary taxes, and this duty must continue to be a duty or legal obligation, one whose performance could be enforced in the courts until the contracts of the city were complied with. But it could not male the levying of the required taxes depend upon the hazard of a popular vote, and if an attempt were made to make it depend upon a popular vote, such act would be absolutely null and void.

The Illinois legislature attempted in the case of Von Hoffman v. City of Quincy, supra, to change the method of levying sufficient taxes for the payment of the city’s bonded indebtedness without substituting therefor a remedy as efficient as the law provided when the bonds were issued, and that act was held by the supreme court of the United States to be absolutely void.

While the Black Law provides for a mayor and council, it does not charge the council with the duty of levying taxes to meet the bonded indebtedness or any indebtedness. The majority opinion quotes from sec. 3 of the Black Law, whereby it is provided that all rights and property of every description which are vested in any city under its former organization shall vest in the same under the organization contemplated by said act, and that such new organization *807“shall have and exercise all powers, functions, rights and privileges now or hereafter given or granted it and shall be subject to all the duties, obligations, liabilities and limitations now or hereafter imposed upon such municipal corporation,” etc. It cannot be claimed that any provisions of the special charter for levying and collecting taxes remained in force after the adoption of the Black Law. The provisions of said sec. 3 absolutely extinguish the special charter in the following language: “Provided: That no provisions of any special charter or other special act or law which any such city may be operating under at the time of its becoming organized under this act, shall thereafter be applicable to such city while it is operating under the provisions of this act. ’ ’ The Black Law nowhere contains any provisions requiring the councilmen or any other officer to levy any tax to meet the requirements of the existing bond issues. If the general laws of the state governing second-class cities stood alone, they impose upon the municipal officers a lawful duty in respect to levying taxes to pay the indebtedness of the city, substantially equivalent to that imposed by the special charter. But the general laws do not stand alone. By the Black Law they have been adopted only in so far as they are “not inconsistent with the provisions of this act.” (See sec. 3.) Under the general law and under the. special charter there was an imperative duty imposed on the proper officers to levy taxes for the purpose of paying the bonded indebtedness. Those officers had no alternative in the matter, and as above stated, if they refused to do so they could be compelled by mandamus. The Black Law, however, annihilates this legal obligation so far as its practical availability to the creditor is concerned, as it puts the decision as to whether or not taxes shall be levied in the hands of the voters of the city; in other words, the question as to whether or not the contract obligations of the city shall be met may, in strict accordance with the provisions of the Black Law, be determined by the legal voters of the city, who cannot-by any known process of law be compelled to vote, in favor of levying the tax. But it has been suggested that you could trust the people to do this — that *808they are honest. Conceding it: that is not the question here. The bondholder had the right to an adequate remedy not dependent upon the will or wish of the voter — a remedy as adequate and effective as he had when the bonds were issued under the special charter. There is no question as to the electors’ honesty involved here. The power and duty of the council under the Black Law in regard to the levying of taxes is only such power and duty as the voters of the city choose at any time to leave in their hands. This remarkable situation is caused by the loose, sweeping provisions in which the legislature embodied what is known as the “initiative and referendum” in said act.

Sec. 25 of the act provides as follows: “If, prior to the date when any ordinance shall take effect, a petition, which petition, and its requirements shall be substantially as required by the provisions of sec. 17 of this act, with the necessary changes made therein to meet the needs of this section, signed by qualified electors equal in number to twenty-five (25) per centum of the entire vote east for mayor at the last preceding general municipal election, shall be filed with the clerk protesting against the enactment of such ordinance, it shall, by the filing of such petition, be suspended from taking effect.....Thereupon the council shall immediately reconsider such ordinance, and, if it do not entirely repeal the same, shall submit it to popular vote at the next municipal election; the council, in its discretion, may call a special election for that purpose; and such ordinance shall not take effect unless the majority of the qualified electors voting thereon at such election shall vote in favor thereof.”

This section also emphasizes the carelessness with which said act was drawn. It provides that the petition referred to therein shall be substantially as required by the provisions of sec. 17 of said act. Turning to sec. 17, we find that it does not refer to petitions at all, but provides for the general and special meetings of the council and the time for holding the same, and contains nothing in regard to petitions.

It is evident in case the council levies a tax to meet the requirements of any bond issues, their action may neverthe*809less, in strict observance of the forms of law, be reviewed by the people at large, and if for any reason whatever the people choose to vote against the levying of such tax, then the levy could not take effect. Suppose a proposed ordinance was sought to be enacted by the initiative as provided by see. 24 of said act, providing that no tax be levied for the year 1913 for the payment of the interest on said bonded indebtedness. Under the Black Law it would be the duty of the council to pass it or submit it to the electors for passage, as there are no exceptions to the enactment of ordinances under the initiative. After the people had enacted such an ordinance the council would 'not dare, nor would they have any authority, to repeal it by enacting an ordinance levying such tax. If they undertook to do so, they no doubt would be recalled. In that case the remedy of mandamus or any other remedy would not be an adequate remedy to the bondholder.

But it is contended that see. 74 of the Black Law provides that “Ordinances making the annual tax levy and appropriations shall take effect immediately upon their passage,” and it is urged that when they take effect it is too late to refer them to a vote of the people. Conceding that, there are various ways by which the provisions of said section might or could be evaded. First, it is not required bjr law that a tax levy to meet the requirements of a bond issue shall be a part of the “annual tax levy,” and the council might, if it chose, make such levy at a separate and different meeting:, And again: See. 26 of said act provides that “The council, of its own motion, may submit to popular vote, for adoption or rejection, at any election any proposed ordinance or measure [no exception] in the same manner and with the same force and effect as provided in this act for their submission on petition.” That section places it in the hands of the council of its own motion to submit to popular vote “any proposed ordinance or measure” in the same manner and with the same force and effect as provided in said act for their submission on petition. Supposing the council should submit the ordinance for the purpose of levying a *810tax to. pay the indebtedness of the city to a vote of the people; they would be bound by the vote of the people under the provisions of said law. But the majority of the court has really read into said section after the words, “any proposed ordinance,” the words, “except ordinances whereby taxes are levied' to meet contract obligations,” and I think that is the clearest judicial legislation.

When this law was submitted to the people of Boise City for adoption or rejection, the whole law was submitted, and the history of that election shows that one of the main inducing causes of its adoption as proclaimed by its advocates was that under this law the sole power of legislation and of conducting the city’s business would be vested in the people of the city. And no doubt many of the people believed from the statements made that if the Black Law were adopted, an opportunity would be given to abrogate- or repudiate certain contracts, such as the lighting contract which had been recently entered into by the city and of which some people did not approve.

Under the Boise City charter, the legislature had provided for a mayor and common council, always amenable to the process of mandamus. This was the remedy and a .part of the contract on which the bondholders and creditors of the municipality relied. In its place, under the Black Law, no officer is amenable in any practical way to the process of mandamus so far as the passage of ordinances is concerned, but the ultimate power over all ordinances and other measures is vested in the decision of the electors of the city. The only power vested in the council is such power as the people choose to leave with it. The creditors of the city had a contract they could enforce in the courts under the charter, but under the provisions of the Black Law'the enactment of ordinances levying taxes for the purpose of paying the indebtedness may be left to a vote of the people, in case the council desire to leave it with the people or in case the people desire to vote upon it. Under such a condition, what becomes of the contract right of the bondholders? It is a mere hope or expectation that the people will never vote to *811repudiate its municipal obligations. The bondholders had an adequate remedy under the provisions of the special charter, and any act of the legislature that deprives them of that right is unconstitutional and void.

The court, in Von Hoffman v. City of Quincy, supra, said: “When the bonds in question were issued there were laws in force which authorized and required the collection of taxes sufficient in amount to meet the interest, as it accrued from time to time, upon the entire debt. But for the act of the 14th of February, 1863, there would be no difficulty in enforcing them. The amount permitted to be collected by that act will be insufficient.....A right without a remedy is as if it were not. For every beneficial purpose it may be said not to exist. It is well settled that a state may disable itself by contract from exercising its taxing power in particular cases. It is equally clear that where a state has authorized a municipal corporation to contract and to exercise the power of local taxation to the extent necessary to meet its engagements, the power thus given cannot be withdrawn until the contract is satisfied.....A different result -would leave nothing of the contract but an abstract right —of no practical value — and render the protection of the constitution a shadow and a delusion. ’ ’

In the state of Louisiana, after an obligation had been incurred, a statute was passed forbidding, among other things, the issuance of a writ of mandate to enforce the tax levy for its payment, and in the case of Louisiana v. Pilsbury, 105 U. S. 278, 26 L. ed. 1090, the court said:

“When the contract was made, the writ [of mandamus] was the usual and the only effective means to compel the city authorities to do their duty in the premises, in case of their failure to provide in other ways the required funds. There was no other complete and adequate remedy. The only ground on which a change of remedy, existing when a contract was made, is permissible without impairment of the contract, is that a new and adequate and efficacious remedy be substituted for that which is superseded. Here, no remedy whatever is substituted for that of mandamus.”

*812In the ease at bar, the legislature has undertaken to do indirectly what it could not do directly. They have made the writ of mandamus ineffective by reason of authorizing the question as to whether a tax levy shall be made to be submitted to the electors of the city, which abolishes the writ of mandamus as effectively as though it had done so in express words. The writ of mandate would be of no avail against the voters of the city, and there is no way of preserving the contract obligations referred to except by judicially repealing a part of the act in question.

In the last-cited ease the court said: “When the bonds were issued and taken by the creditors a contract was consummated between them and the city as fully as if all the provisions had been embodied as express stipulations in the most formal instrument signed by the parties. On the one hand, the creditors surrendered their debts against the former municipalities; and, on the other hand, in consideration of the surrender, the city gave to them its bonds, which carried the pledge of an annual tax of a specified amount for the .payment of the interest on them, and ultimately of the principal. The annual tax was the security offered to the creditors; and it could not be afterward severed from the contract without violating its stipulations, any more than a mortgage executed as security for a note given for a loan could be subsequently repudiated as forming no part of the transaction. Nearly all legislative contracts are made in a similar way. The law authorizes certain bonds to be issued, or certain work to be done upon specified conditions. When these are accepted, a contract is entered into imposing the duties and creating the liabilities of the most carefully drawn instrument embodying the provisions.”

In Mobile v. Watson, 116 U. S. 289, 6 Sup. Ct. 398, 29 L. ed. 620, the supreme court of the United States said:

“The remedies for the enforcement of such obligations assumed by a municipal corporation, which existed when the contract was made, must be left unimpaired by the legislature, or if they are changed a substantial equivalent must be provided.”

*813It requires no argument to show that the value of a contract is manifestly impaired when its payment cannot be enforced in a court. What would be the effect on negotiable paper if it were left by law to the payer to vote whether he would pay his obligation or not? This is no reflection on the honesty of anybody, but it is simply a question of obligation of contracts and their enforcement in the courts, if necessary.

Quoting further from Von Hoffman v. City of Quincy, supra, the court said:

“Nothing can be more material to the obligation than the means of enforcement. Without the remedy the contract may, indeed, in the sense of the law, be said not to exist, and its obligation to fall within the class of those moral and social duties which depend for their fulfillment wholly upon the will of the individual. The ideas of validity and remedy are inseparable, and both are parts of the obligation, which is guaranteed by the constitution against invasion.”

It was held in People v. Bond, 10 Cal. 563, that a creditor has a right to the substance of the contract as he made it. It is his privilege to judge for himself whether it is for his interest for the agreement to be discharged in the particular way stipulated, or in a different mode; and neither the courts nor the legislature can change it in any substantial particular.

The powers of the council under the Black Law are only such as are provided by the grant contained in the law itself, including whatever grants or power contained in the general law are made applicable by the. Black Law, but in no event or under no circumstances do any of the old powers created by the Boise charter survive to the new council, because all of the provisions of the charter were absolutely suspended by said Black Law. As stated by counsel, amicus curiae, we have no fears that the people of Boise would ever vote to repudiate contract obligations; but it is quite possible that irresponsible agitators may call elections on questions involving municipal obligations and thus injure the city’s credit and the value of its securities. Under the Black Law *814it costs the petitioners nothing to require the council to call an election under the initiative or referendum. The fact that the people would vote down any attempt at repudiation is a very different and inferior kind of protection to that afforded by responsible officers with their duties defined by law and themselves amenable to the process of the courts. It is not sufficient to say that the referendum would not be invoked in respect to tax levies to meet bonded indebtedness, as the council may, on its own motion, submit that question to the electors under the provisions of sec. 26 of said act. It was held in Curtin v. Benson, 222 U. S. 78, 32 Sup. Ct. 31, that whether a power is within constitutional limits is to be determined by what cam, be done under it, not what may be done.

Said act is repugnant to the provisions of sec. 10, art. 1, of the federal constitution.

In order to sustain said Black Law, my associates had to construe the words ‘‘special election,” as used in sec. 3 of the Black Law, to mean the same as the words “general election,” as used in sec. 1, art. 12, of the constitution; and have also construed the words “less than 15,000 inhabitants” (that being the maximum for second-class cities), to mean twenty or twenty-five thousand, or any number more than fifteen thousand. They have removed the maximum placed by the legislature. They have also been required to construe the phrase, “any ordinance or measure,” as used in sec. 26 of said act, to mean “any ordinance or measure except certain ordinances and measures for levying taxes,” and this construction is judicial legislation, pure and simple. It has construed plain, ordinary words and language to have an extraordinary and unnatural meaning, and carries the rule of construction past any limit, and such construction implies ignorance on behalf of the legislature of the meaning of plain and simple words in common, every-day use.

The court erred in refusing to grant the injunction as prayed for in the complaint.