Le Tourneau v. City of Duluth

START, C. J.

Action by a taxpayer to restrain a proposed issue of bonds to the amount of $60,000 by the common council of the city of Duluth for the purpose of extending its water plant without first submitting the proposition to issue such bonds to the voters of the city. The defendant interposed a general demurrer to the complaint, and the trial court made its order sustaining the demurrer, from which the plaintiff appealed.

*220It appears from the allegations of the complaint that the city of Duluth adopted, pursuant to Laws 1899, c. 351, a special charter, which has been in effect since March, 1900; and, further, that the city, by its common council, in January, 1901, issued without submitting the question of their issue to the voters of the city, and sold, permanent improvement revolving fund bonds to the amount of $99,000, which are now outstanding. The contention of the plaintiff is to the effect that, the council having already issued bonds to the amount of $99,000 without a vote of the electors, it cannot now issue the water bonds here in question until it is authorized to do so by a majority vote of the electors of the city. If this claim be correct, it follows that the proposed issue of bonds is illegal, and that the complaint states a cause of action.

Whether the proposed issue of bonds is legal or not depends upon the construction to be given to Laws 1899, c. 351, § 10, hereafter referred to as the “enabling act,” and to Duluth Charter, § 286, the here material provisions of which are substantially these: The city council shall control the property and finances of the city, and shall have power to borrow money on its credit for city purposes, and tó issue bonds therefor; but

“No city council of any city in this state shall issue bonds for any purpose, to the amount of one hundred thousand dollars (100,000), or over, until the proposition to issue said bonds has been approved by a majority of the legal voters of that city, voting at a general or special election.” Section 10.

The city of Duluth may issue bonds by ordinances as follows: (1) To pay floating indebtedness of the city existing at the time this charter goes into effect; (2) for the purpose of constructing, regulating, maintaining, extending, or improving suitable water or light plants; (3) such additional bonds as may be necessary to extend, enlarge, or improve such water and light plants.

“No bonds excepting bonds for refunding indebtedness shall be issued for any purpose to an amount exceeding $100,000 until the proposition to issue said bonds has been approved by a majority of the legal voters of the city, voting at a general or special election. Whenever the common council passes any ordinance to issue bonds in pursuance of the provisions of this section, such ordinance shall provide for the submission to the legal voters of the city, at *221some general city election or at some special election to be called by the common council for that purpose, the proposition of issuing said bonds, to an amount deemed by said common council advisable.” Section 286.

Whether the exception of bonds for refunding indebtedness contained in the charter provisions quoted is repugnant to the prohibition contained in the enabling act, and therefore void, is not here material, for the subject under consideration is not refunding bonds, but water bonds. It is clear from the charter provisions that no bonds to an amount exceeding $100,000 can be issued by the council until the proposition to issue such bonds has been approved by a majority of the legal voters of the city; and, further, that any proposed issue of bonds not falling within this prohibition may be issued without the approval of such voters. It is true that the general language which follows this prohibition, if construed without reference to the connection in which it is used, would require all proposed bond issues, without reference to the amount thereof, to be submitted to the vo tors of the city. But it cannot be so construed, for it would render the preceding sentence containing the prohibition meaningless and useless. When all of these charter provisions are construed together, as they must be, it is apparent that the construction we have adopted is not only the only reasonable one that can be given to the prohibition of the charter, but the only one which will give effect to all the charter provisions in question. The charter, therefore, imposes no greater restrictions as to issuing bonds without submitting the question to the voters than the enabling act does.

This narrows the question of the legality of the proposed bond issue to the sole question: What is the proper interpretation of the prohibition contained in the enabling act, “no city council * ® * shall issue bonds for any purpose to the amount of one hundred thousand dollars (100,000), or over, until the proposition to issue said bonds has been approved by a majority of the legal voters”?

It is urged on behalf of the plaintiff that the words, “for any purpose,” as used in this prohibition, mean “for all purposes,” and that th<E prohibition, read, according to its true meaning, forbids, without the approval of a majority of the legal voters, the issue *222by any city of any bonds when the aggregate amount of bonds already issued for all purposes equals or exceeds $100,000. If such is the meaning of the prohibition, the legislature successfully concealed it by the words used to express it. If such was their intention, the simple and natural way of expressing it would have been in these words: “No city council of any city shall issue any bonds for any purpose when the aggregate bonded indebtedness of the city for all purposes equals or exceeds one hundred thousand dollars, until the proposition to issue such bonds has been approved by a majority of the legal voters of the city voting at a general or special election.” But, if the intention of the prohibition was to forbid the issue of bonds in excess of the limitation named for any of the several specific purposes -for which cities are authorized by law to issue bonds, the language used fairly expresses such intention. It is the proposition to issue bonds to the amount of $100,000 or over for any purpose which must be approved by the voters, and not a proposition to issue a less amount in case the then aggregate bonded indebtedness equals or exceeds the limitation. The language used is, “until the proposition to issue said bonds has been approved.” What bonds? “Bonds to the amount of one hundred thousand dollars or over.” No other bonds are mentioned in the prohibition, which is directed against large issues of bonds for any specific purpose, unless the proposition is first approved by the voters.

While the prohibition is not as aptly expressed as it might have been, it is reasonably clear that its purpose was to prevent any city from entering upon the work of constructing, extending, or repairing of any particular public improvement, or upon any other authorized municipal enterprise involving the necessity of a bond issue of $100,000 or more unless the proposition to issue the bonds for such purpose should be first approved by the voters of the city; or, in other words, this prohibition only forbids a bond issue for any specific purpose exceeding the amount limited without the approval of the legal voters of the city. We accordingly hold that the common council of the city may issue its bonds to any amount less than $100,000, for any particular authorized public purpose, without the approval of the electors, although the then aggregate *223bonded indebtedness of the city for all purposes equals or exceeds the amount named, but not the maximum limitation in excess of which no bonds can be issued for any purpose whatever.

It is suggested that this construction would enable a city to enter upon any municipal enterprise it pleased without the approval of the voters, although it involved an ultimate bond issue of a million of dollars, more or less, by resorting to separate bond issues for instalments of the entire work. Such an act would be a palpable evasion of the law, — a mere subterfuge, — to be dealt with by the court accordingly. But, were it otherwise, the suggestion affords no reason why we should not construe the enabling act as it reads, leaving the legislature- to amend it if time and experience shall demonstrate the necessity for so doing.

Again, it is suggested that, unless the prohibition be so construed as to forbid any bond issue whatever without the approval of the voters whenever the aggregate amount of bonds already issued equals or exceeds $100,000, the door will be open for municipal extravagance in all cities that have adopted charters pursuant to this enabling act. If this be so, the remedy is by an appeal to the legislature, or by an appeal at the polls, and the election of members of the city council who will manage municipal affairs with the same fidelity and prudence as conservative and successful men manage their own business. But the construction contended for by the plaintiff, even if it were permissible, would lead to practical difficulties. Thus, if a city has once issued bonds for all purposes to the aggregate amount of $100,000, it cannot thereafter issue bonds for any purpose, nor in any amount, without submitting the proposition to the voters, even though the amount of the proposed issue was less than the expenses of holding an election. The proposed bond issue in this case is for a specific authorized public purpose, and the amount of bonds necessary to be issued for its execution is less than $100,000. Therefore the city council is authorized to issue the bonds without submitting-the proposition to the voters of the city.

Order affirmed.