City of Springfield v. Edwards

Mr. Justice Scholfield

delivered the opinion of the Court:

This was a. bill in chancery, by a citizen and tax-paver of the city of Springfield, to enjoin the municipal authorities of that city from incurring indebtedness and levying and collecting taxes in violation of the city charter and the constitution of the State.

The decree finds, as facts proved, and which support the material allegations of the bill, that at no time since the adoption of the present constitution has the debt of the city been less than $850,000, and that the taxable property therein, as ascertained by assessment for State and county taxes, has, at no time during that period, exceeded $6,000,000, but that, notwithstanding this, the city has incurred indebtedness aggregating as follows: On the 1st of March, 1871, $4171.89; on the 1st of March, 1872, $51,189.02; on the 1st of March, 1873, $70,249.91; on the 1st of March, 1874, $101,914.90.

It further finds, that money was borrowed by the city, for which warrants were issued, amounting to $97,680; that, also, the further sum of $34,601.81 was borrowed by the city, for which bonds were issued amounting to $37,000, when the interest of the outstanding indebtedness of the city for that and previous years amounted to not less than $70,000 per annum, and the revenue for the ordinary taxes of the preceding year amounted to $81,066.25; that in said loans to the city for which warrants were issued, the warrants were made payable at a future day, and interest at ten per .cent per annum was taken out in advance, and it was provided, if the warrants were not paid when due, they should bear ten per cent interest until paid; that said warrants were issued when there were no funds in the treasury for their payment; that appropriations made by the city council for the payment of interest for improvements and for city expenses, exceeded the amount of the whole ordinary revenue of the city for the fiscal year immediately preceding, and that money has been paid out of the treasury of the city for which no appropriations by ordinance were made.

The decree perpetually enjoins the municipal authorities, in the following language, “ from incurring any indebtedness in any manner or for any purpose, including existing indebtedness, in the aggregate exceeding five per centum on the valuation of the taxable property in said city, to be ascertained by the last assessment for State and county taxes, previous to the incurring of any additional indebtedness, and from making, in any fiscal year, appropriations, or levying taxes for the payment of interest for improvements and for city expenses in excess of the ordinary revenue of the fiscal year immediately preceding, unless, in the payment of interest on the public debts of the city, they shall provide according to law, by taxation or otherwise, some additional fund out of which such excess of appropriations maybe made to meet such indebtedness, or from issuing any warrants or authorizing their issue for the payment of any money wdien there are no means in the city treasury for their payment, or from issuing the same to bear interest, or to become due at a future day, or for the payment of any money out of the treasury, without, by ordinance, making appropriation therefor, or from assessing and collecting taxes for the year 1874 in any other manner than is provided for under the general revenue laws of the State for the assessment and collection of taxes, or from borrowing money when the interest on the outstanding indebtedness shall exceed the one-half of the city revenue arising from the ordinary taxes within the city for the year immediately preceding,” etc.

It is provided by § 12, art. 9 of the present constitution, that “no county, city, township, school district, or other municipal corporation, shall be allowed to become indebted, in any manner or for any purpose, 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 last assessment for State and county taxes, previous to the incurring of such indebtedness." Any county, city1', school district or other municipal corporation incurring any indebtedness, as aforesaid, shall, before or at the time of doing so, provide for the collection of a direct annual tax sufficient to pay the interest on such debt as it falls due, and also to pay and discharge the principal thereof within twenty years from the time of contracting the same.” * * *

By the first clause of section 4, art. 5, of the “Act to reduce the act incorporating the city of Springfield, and the several acts amendatory thereof, into one act, and to amend the same,” approved March 2, 1854, (Laws of 1854, p. 44,) it is enacted: “The city council * * * shall have power * * * to borrow money on the credit of the city, and issue the bonds of the city therefor; but no sum of money shall be borrowed at a higher rate of interest than the rate allowed by law, nor shall a greater sum or sums be borrowed, or at anv time out ■ standing, the interest upon the aggregate of which shall exceed the one-half of the city revenue arising from the ordinary taxes within the city for the year immediately preceding, and no bonds shall be issued or negotiated at less than par value. The appropriations of the city council for payment' of interest for improvements and for city expenses, during any one fiscal year, shall not exceed the amount of the whole ordinary revenue of the city for the fiscal year immediately preceding; but the city council may apply any surplus money in the treasury to the extinguishment of the city debt, or to the creation of a sinking fund for that purpose, or to the carrying on of the public works of the city, or to the contingent fund, for the contingent expenses of the city.”

By the 13th section of “An act to amend the charter of the city of Springfield,” approved February 21, 1861, (Private Laws of 1861, p. 289,) the controller of the city is required, in the month of April in each year, to submit to the council, among other reports, one showing the aggregate income of the preceding fiscal year, from all sources; and it is provided, that “in no event shall the city council make the current appropriations of any year exceed in amount the income of the city during the preceding year, as ascertained by the controller in his said statement, unless in the payment of interest on the public debts of the city. They shall provide, according to law, by taxation or otherwise, some additional fund, out of which such excess of appropriations may be made to meet such indebtedness.”

And by the 16th section of the same act it is provided, that “ all warrants drawn upon the treasurer must be signed by the controller, and countersigned by the mayor, stating therein the particular fund or appropriation to which the same is chargeable, and the person to whom payable, and no money shall be paid otherwise than upon such warrants so drawn.”

It thus appears that the decree follows, with almost literal fidelity, the language of the constitution and that of the city charter combined; and the only question, therefore, that can arise is, does the case made show any necessity for such injunction?

We may dismiss the objection that the complainant does not show in his bill that he is injured by the acts complained of, otherwise than in common with all other tax-payers in the city, with the observation that it has been held in this State that such an injury is sufficient to entitle him to an injunction, and that the question is not open to further discussion. Colton et al. v. Hanchett et al. 13 Ill. 615; Perry et al. v. Kinnear et al. 42 id. 160; and Beauchamp v. Board of Supervisors, etc. 45 id. 274.

Appellant contends that when liabilities are created and appropriations are made, which are within the limits of the revenue accruing, to meet them, they are not debts within the meaning of the prohibition of the constitution; and that temporary loans are not, when within the limits of the revenue expected to be realized.

The first branch of this position has support in Grant v. The City of Davenport et al. 36 Iowa, 396, People v. Pacheco. 7 Cal. 175, Koppekus v. State Capitol Commissioners, 16 id. 253, The State v. McAuley, 15 id. 455, The State v. Medberry et al. 7 Ohio St. 522, and State v. Mayor, 23 La. An. 358.

These cases maintain the doctrine that revenues may be appropriated in anticipation of their receipt, as effectually as when actually in the treasury; that the appropriation of moneys when received meets the services as they are rendered,— thus discharging the liabilities as they arise, or rather anticipating and preventing their existence.

In considering what construction shall be given to a constitution or a statute, we are to resort to the natural signification of the words employed, in the order and grammatical arrangement in which they are placed; and if, when thus regarded, the words embody a definite meaning, which involves no absurdity, and no contradiction between different parts of the instrument, then such meaning is the only one we are at liberty to say was intended to be conveyed.

There is no difficulty in ascertaining the natural signification of the words employed in the clause of the constitution under consideration, and to give them that meaning involves no absurdity or contradiction with other clauses of the constitution. The prohibition is against becoming indebted—that is, voluntarily incurring a legal liability to pay, “• m any manner or for any purpose,” when a given amount of indebtedness has previously been incurred. It could hardly be probable that any two individuals of average intelligence could understand this language differently. It is clear and precise, and there is no reason to believe the convention did not intend what the words convey.

A debt, payable in the future, is, obviously, no less a debt than if payable presently; and a debt payable upon a contingency, as, upon the happening of some event, such as the rendering of service or the delivery of property, etc., is some kind of a debt, and therefore within the prohibition. If a contract or undertaking contemplates, in any contingency, a liability to pay, when the contingency occurs the liability is absolute—the debt exists—and it differs from a present, unqualified promise to pay, only in the manner by which the indebtedness was incurred. And, since the purpose of the debt is expressly excluded from consideration, it can make no difference whether the debt be for necessary current expenses, or for something else.

In this view, we are only prepared to yield our assent to the rule recognized by the authorities referred to, with these qualifications: First, the tax appropriated must, at the time, be actually levied; second, by the legal effect of the contract between the corporation and the individual, made at the time of the appropriation, the appropriation and issuing and accepting of a warrantor order on the treasury for its payment, must operate to prevent any liability to accrue on the contract against the corporation.

The principle, as we understand, is, there is, in such case, no debt, because one thing is simply given and accepted in exchange for another. When the appropriation is made and the warrant or order on the treasury for its payment is issued and accepted, the transaction is closed on the part of the corporation—leaving no future obligation, either absolute or contingent, upon it, whereby its debt may be increased. But until a tax is levied, there is nothing in existence which can be exchanged; and an obligation to levy a tax in the future, for the benefit of a particular individual, necessarily implies the existence of a present debt in favor of the individual against the corporation, which he is lawfully entitled to have paid by the levy. If the making of the appropriation and issuing and accepting a warrant for its payment does not have the effect of relieving the corporation of all liability, or, in other words, if it incurs any liability thereby, it must, manifestly incur, either absolutely or contingently, a debt.

Where a warrant or order, payable from a specific appropriation of a tax levied but not yet collected, is accepted in exchange for services rendered or to be rendered, or for materials furnished or to be furnished, so that there is, in fact, but the exchange of one thing for another, the duty remains for the proper officers to collect and pay over the tax in accordanee with the appropriation—but, obviously, for any failure in that regard, the remedy must be against the officers and not against the corporation, for. otherwise, a contingent debt would, in this way, be incurred by the corporation.

The facts here found as proved, and about which there seems to be no dispute, show an increase in the city debt, in plain and palpable violation of the constitution, each year since the adoption of that instrument. At no time, since the adoption of the constitution, has its outstanding indebtedness been less than five per centum on the value of the taxable property of the city, as ascertained by the annual assessments for State and county purposes, but, to the reverse, it has constantly been largely in excess of that amount; and yet, its indebtedness was augmented, March 1, 1871. $4171.89, March 1,1872, $51,189.02, March 1, 1873, $70,249.91, and March 1, 1874, $101,914.90. It is impossible that this could have been for current expenses, and satisfied by appropriating to their payment the current revenues, as levied each year. If such expenses had been thus satisfied, there could have been no debt left standing—for, whether the appropriation were made at the beginning or the end of the fiscal year could make no difference, since, in either case, it must satisfy and discharge the current expenses for the year.

The facts found as proved, likewise show the borrowing of money and contracting to pay interest thereon, and the paym ent of money from the treasury, in direct violation of the letter and spirit of the organic law of the city. This is indefensible. Those representing the city can exercise only such powers, in its name and on its behalf, as are expressly conferred by its organic law, or as are incidental and necessary to carry into effect the objects of the incorporation. “ Much less can any power be exercised or act done, which is forbidden by statute.” Dillon on Municipal Corp. § 55.

Objection is urged, that the court below erred in the pro- ' ceedings by attachment against the aldermen for disobedience to the preliminary injunction. As no judgment was rendered against the aldermen on the final hearing, it is impossible to see how they have been prejudiced by the attachment. It has been held, in numerous cases, that neither an appeal nor writ of error will lie on a simply interlocutory order.

The city collector was not authorized to proceed to collect the tax. The People ex rel. v. Cooper, 83 Ill. 585. The tax having been certified to the county clerk, should have been collected by the same officers by which State and county taxes are collected.

We see no cause to disturb the decree, and it is, accordingly, affirmed.

Decree affirmed.

Mr. Justice Scott dissenting.