Knipper v. City of Covington

Opinion oe the court by

CHIEF JUSTICE HAZELRíGG

Reversing.

It is contended on this appeal that, if the public health or safety required it, a city, notwithstanding the inhibitory language of section 157 of the Constitution, may become indebted to an amount exceeding, in any year, the income and revenue provided for such year, without the assent of the voters. So much of that section as is pertinent reads as follow®;

“Section 157. ... No county, city, town, taxing dis-ing district, or other municipality shall be authorized or permitted 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 *189of two-thirds of the voters thereof, votingat an election to be held for that purpose; and any indebtedness contracted in violation of this section shall be void. Nor shall such contract bé enforceable by t'he person with whom made; nor shall such municipality ever be authorized to assume same.”

Authority for the nullification of this section is sought to be found in section 158 of the Constitution, which reads as follows:

“Section 158. The respective cities, towns, counties, taxing districts and municipalities shall not be authorized or permitted to incur indebtedness to an amount, including existing indebtedness, in the aggregate exceeding the following named maximum percentages on the value of the taxable property therein, to be estimated by the assessment next before the last assessment previous to the in curring of the indebtedness, viz.: Cities of! ¡the first and second classes, and of the third class having a population exceeding fifteen thousand, ten per centum; cities of the third class having a population of' less than fifteen thousand, and cities and towns of the fourth class, five per centum; cities and towns of the fifth and sixth classes, three per centum; and counties, taxing districts and other municipalities, two per centum; provided, any city, town, counity, taxing district or other municipality may contract an indebtedness in excess of such limitations when the same has been authorized under laws in force prior to the adoption of this Constitution, or when necessary for the completion of any payment for a public improvement undertaken and not completed and paid for at the time of the adoption of the Constitution; and provided, further, if, at the timo1 of the adoption of this Constitution, the aggregate indebtedness, bonded or floating, of any city, *190town, county, taxing district or other municipality, including that which it has been or may be authorized to contract as herein provided, shall exceed the limit herein prescribed, then no such city or town shall be authorized or permitted to increase its indebtedness in an amount exceeding two per centum, and no such county, taxing district or other municipality, in an amount exceeding one per centum, in the aggregate upon the value of the taxable property therein, to be ascertained as herein provided, until the aggregate of its indebtedness shall have been reduced below the limit herein fixed,, and thereafter it shall not exceed the limit, unless, in case of emergency, the public health or safety should so require. Nothing herein shall prevent the issue of renewal bpnds, or bonds lo fund the floating indebtedness of any city, town, county, taxing district or other municipality.”

It appears that the limit of the aggregate indebtedness of the appellee city, as prescribed in section 158, has not been reached, such indebtedness being yet within ten per centum of the taxable property, and this limit will not be exceeded 'even if the bonds sought to be validated be issued. As the proviso in section 158, permitting an increase beyond the limit fixed in that section should the public health or safety so require, ha,s in express terms reference solely to instances where this limit has been reached, and an emergency requires that there be an increase beyond this limit, we can not conceive how the section can possibly have any application to the present case.

The first section in plain and unambiguous language, provides a barrier against any indebtedness for any purpose, without a vote, beyond the revenues of the year. The second section is not a grant of power beyond this, but im*191poses an additional limitation on the creation of indebtedness in the aggregate. If a city has not reached the limits provided in section 158, the section has no bearing whatever in considering what indebtedness such a city may create. The limitations of that section are simply not in the way, and the question is to be considered as if the section had never been adopted.

From the sections quoted, it would seem clear that, if a city is overtaken with the necessity of increasing its indebtedness in any year beyond its revenues for that year, it may do so by obtaining the assent of the voters, as provided in section 157; and it matters not for what “purpose” the proposed indebtedness is needed, whether because of the public health or safety or what not, nor in what “manner” it is sought to be imposed. A vote is demanded by the express terms of the law whenever an indebtedness beyond revenues is to be created. And, if !he indebtedness is attempted to be created without the vote, the Constitution pronounces the contract creating it void. It can not be enforced, nor can the city ever be authorized to assume such indebtedness. If, therefore, an emergency in any city arises requiring such an increase, “the assent of two-thirds of the voters therof voting at an election to be held for that purpose” must be obtained before the increase can be made.

This requirement is without regard to the question of aggregate indebtedness. A city may be wholly out of debt, still the requirement of section 157 is that no indebtedness for any purpose shall be created in any manner which is in excess of the annual revenues, except by the assent of the people. Again, a city may be in debt even beyond the limits fixed in section 158, still the requirement is the same — the city must live within its means, unless the *192people, direct otherwise. But, there being no limitation in section 157 on the aggregate indebtedness, a city might, so far as this section is concerned, vote a. large debt on itself year after year; and this very evil had proven disastrous in former times. Therefore the framers of the Constitution placed a limit on aggregate indebtedness, beyond which even the people themselves could not go.' This-limit was of necessity an arbitrary one, and it was argued that possibly some emergency might arise when the public health and safety would require? the creation of a debt which, together with the other indebtedness, would exceed the limit. Therefore it is provided in section 158 that the limit therein fixed shall not be exceeded “unless, in case of emergency, the public health or safety should so require,” in which event the necessary implication is, the limit may be exceeded by the creation of an additional debt. Now, it may be entirely possible to make this additional debt-out of the revenue provided for and to be collected during the ensuing year. But, if the additional debit can not be so met,' then the indebtedness, being in excess of the revenues for the year, must be authorized by a- vote, as required by section 157.

Each section provides1 a limitation on -the power to create indebtedness. Neither of them is a grant of power. No such grant was then necessary, for the power to create indebtedness was therefore not specifically limited. When an emergency arises such as is named in section 158, then certain limits fixed in that section are removed. But section 157 is still in force, and, while the emergency indebtedness may be incurred, the provisions of-section 157 still provide how it may be incurred; that is, by a vote of the people. If such indebtedness is in excess of the revenues for the year, aud without that vote, if there is no in*193debtedness beyond the revenues, there is no conflict between them. We therefore must give each section full' effect, and apply the limitation provided for in each of them.

When considering the indebtedness which the city is authorized to create by a vote of the people, as provided in section 157, we are not to disregard the -- vided for in section 158. And while the to create an unlimited indebtedness, so far as section 157 is concerned, it does not follow that we are to shut our eyes to any further limitation elsewhere provided. We must read section 158 into and along with section 157 to ■see how far and to what extent the people may vote a debt on themselves. So, in reading section 158, while we find certain limits beyond which, for ordinary purposes, the city can not go, yet for certain purposes we find, in effect, no limits at all. In other words, there is no limit or restriction of the amount to which a city may become indebted under certain emergencies. Practically, as to an indebtedness for certain purposes, that section (158) is abolished. The way is entirely open for the imposition of any amount of indebtedness. But section 157 is to be read into and along with section 158, and the manner of creating an indebtedness “for any purpose” must be as prescribed in section 157.

The puipose of the indebtedness in the case at bar gets us from under the burdens and limitations of section 158, but the manner of creating any indebtedness beyond the revenues must be observed, as presented elsewhere in the Constitution, viz., in section 157. This is the only way to give force and effect to the instrument as a whole. The plea that.this construction may result in disaster to a city by reason of some great emergency, which" could not be *194miet at once, because elections are held only once in a year, is no more than saying that we should disregard the Constitution because it is inconvenient to obey it. At any rate, in the present case, no great delay can result, as the vote can be taken at the coming November election. The judgment upholding the right of the city to issue the bonds in question is reversed, with directions to perpetuate the injunction as prayed.