Allen Etc. v. Van Buren Township Etc.

Dissenting Opinion

Landis, J.

— The sole question for decision in this case is whether the 2% debt limitation provided for in Article 13, §1 of the Constitution of Indiana1 is based *682upon the true cash value of the property or upon its assessed value, which is one-third of the cash value.

The question presented in this case is a matter of first impression in this state, and it is therefore appropriate for us to look to the decisions of courts of other states to ascertain how the matter has been considered in such jurisdictions.

An examination of such cases reveals that the same question here before us for decision has been considered in seven different court decisions from four jurisdictions in this country, and that six out of seven of the opinions handed down have held virtually identical constitutional provisions to refer to the cash value of property rather than its assessed value.2

The majority opinion relies heavily on the earliest of these decisions handed down about the turn of the century and rejects the persuasive reasoning of the subsequent six decisions which held to the contrary and adopts a narrow construction of Art. 13, §1, so as in effect to restrict the bonding power of municipal or political corporations of this state to one-third of 2% or two-thirds of 1%.

It will be noted that the constitutional provision in question does not state the limitation shall be the assessed value of the taxable property but rather the value of the taxable property to be determined by the assessment. As stated in the most recent case *683cited in footnote 2 (State v. Spring City et al. (1953), 123 Utah 471, 477, 260 P. 2d 527, 531) :

“. . . the figure to be used in determining the debt limitation is the full value of the property computed from the assessor’s . . . figure. . . ., This view is in accord with decisions in Iowa, N. W. Halsey & Co. v. City of Belle Plaine, 128 Iowa 467, 104 N. W. 494, and Washington, Hansen v. City of Hoquian, 95 Wash. 132, 163 P. 391, where similar constitutional and statutory provisions prevail.
“ ‘The language of Article XIV, Sec. 4 is clear and unambiguous. It establishes as a debt limitation “four per centum of the value of the taxable property” in the district. The word “value” is not limited or qualified by any adjectives. It does not read “assessed value” or specify any other particular kind, of value. The word “value” standing by itself can have only one meaning, viz. the full worth of [sic] [or] actual value — not a fractional share thereof.’ ”3

The term “value” has been held by numerous authorities to be equivalent to or synonymous with “cash value” (See: 14 C. J..S., p. 22, note 87), “market value” (See: 55 C. J. S., p. 798, note 90, p. 799, note 93), and “reasonable cash market value” (See: 14 C. J. S., p- 23, note 14). See also the recent decision of the U. S. Circuit Court of Appeals of the Fifth Circuit, stating that the term “value” as used in the statutes or in contracts is generally held to mean “market value.” World Fire and Marine Ins. Co. v. Palmer (5th Cir., 1950), 182 F. 2d 707, 711, 17 A. L. R. *6842d 1217, 1225, cert. den. 340 U. S. 852, 71 S. Ct. 81, 95 L. Ed. 624.

I submit the opinion of the majority in this case holding §2 of ch. 122 of the Acts of 1961 to be unconstitutional, is contrary to a reasonable construction of the Indiana Constitution and is contrary to the preponderance of authorities from other jurisdictions and unduly restricts the financial capacity and authority of political and municipal corporations of this state.

The judgment denying the injunction should be affirmed.

. “Limitation on indebtedness — Excess void. — No political or municipal corporation in this State shall ever become indebted in any manner or for any purpose to an amount in the aggregate exceeding two per centum on the value _ of the taxable property within such corporation, to be ascertained by the last assessment for State and county taxes, previous^ to the incurring of such indebtedness; and all bonds or obligations,-in excess of such amount, given by such corporations, shall be void: Provided, That in time of war, foreign invasion, Or other great public calamity, on petition of a majority of the property owners, in number and value, within the limits. of such corporation, the public authorities, in _ their discretion, may incur obligations necessary for the public protection and defense, to such an amount as may be requested in such petition.”

. Miller v. City of Glenwood (1920), 188 Iowa 514, 176 N. W. 373; Halsey & Co. v. Belle Plaine (1905), 128 Iowa 467, 104 N. W. 494; State v. Spring City, et al. (1953), 123 Utah 471, 260 P. 2d 527; Board of Education, Rich County School Dist. v. Passey (1952), 122 Utah 102, 246 P. 2d 1078; Schoen v. Seattle (1921), 117 Wash. 303, 201 Pac. 293; Hansen v. Hoquiam (1917), 95 Wash. 132, 163 Pac. 391.

The only contrary decision is. the earlier case of City of Chicago v. Fishburn (1901), 189 Ill. 367, 59 N. E. 791.

. The contrary conclusion of the early Illinois decision relied on by the majority opinion has been criticised and rejected by the Supreme Courts of Iowa, Washington and Utah. See: Halsey & Co. v. Belle Plaine (1905), supra; Hansen v. Hoquaim (1917), supra; Board of Education, Rich County School Dist. v. Passey (1952), supra.