Court Opinion

ID: 7989405
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:29:14.96218+00
Date Added: 2024-06-11T16:35:18.638291
License: Public Domain

Cox, J".,
delivered the opinion of the court.
This is a friendly suit by Murray P. Smith against the mayor and aldermen of the city of Vicksburg to- have judicially ascertained and determined whether the latter can issue bonds of the city of Vicksburg to the amount of $100,000 .to pay off its floating indebtedness. The bill avers that the outstanding bonded indebtedness of the city is $415,300, and the real and personal assessment on property within its limits for 1904 was $1,016,420, and that on November 4, 1902, the floating indebtedness of the city was fully $100,000; and,' as the revenues of the city rarely exceed its expenditures, $100,000 of the indebtedness on January 11, 1905 (stated in another place to have been $127,285.33), is, for all practical purposes, the same indebtedness that existed on November 4, 1902. The city, to use a current phrase, simply “borrowed from' Peter to pay Paul,” and the defendant still owes a floating indebtedness of about $106,000. The bill further avers that while the city of *581Vicksburg, did not elect to come under* the provisions of our code chapter on municipalities, .the municipal authorities of-the- city of Vicksburg, on November 4, 1902, had its charter amended in certain particulars, copies of which amendments are attached as exhibits. An inspection of the exhibits shows them to be identical in terms with Code 1892, § § 3014 — 3017, with the single exception that the word “amendment” is substituted for the word “chapter” in the last line of sec." 3014. The bill charges that the municipal authorities are now contemplating an issue of bonds to- pay its floating indebtedness, etc. The bill prays that the defendants be restrained from issuing bonds for any purpose until they have procured an authoritative declaration from a court of competent jurisdiction that their right to issue said bonds for the purpose of paying existing indebtedness, and for the purpose of paying current expenses of the city, and for the purpose of paying outstanding loan warrants, can be upheld.
The answer admits the allegations of the bill, admits that defendants contemplate issuing the bonds as charged, and asks that the city’s right to issue bonds to- an amount necessary to take up the present floating debt of the city, amounting to in the neighborhood of $100,000, be determined in this proceeding, and settled definitely for all time to come.
This cause was heard on the bill and answer, and it was ordered, adjudged, and decreed that the mayor and aldermen of the city of Vicksburg are authorized to issue bonds not exceeding $100,000, and that complainant is not entitled to an injunction restraining the issuing of said bonds, from which decree complainant prosecuted an appeal to this court.
We are specially requested to settle two questions at law. The first of these is whether the amendments to the charter of the city of Vicksburg, above herein referred to, approved November 4, 1902, are now operative. It is averred in the bill that the city of Vicksburg amended its charter in certain particulars, as above set out in this opinion. The court cannot de*582termine from an inspection of tlie record whether these amendments were adopted in strict compliance with the provisions of sec. 3039 of the code, which prescribes the manner in which charters of municipalities may be amended. If-they were'so adopted, they are undoubtedly operative, and have become the organic law of the city with regard to the issuing of bonds.
The second and principal question is to determine what limit, if any, there is to the city’s power to issue bonds to liquidate its indebtedness. Section 1 of the amendment, approved November 4, 1902, which is identical with sec. 3014 of the code, except as noted, provides that the “mayor and aldermen, for the purpose of raising money for the erection of municipal and school buildings and the purchase of such buildings or land therefor and the improvement and adornment thereof; for the erection and purchase of waterworks, gas, electric, and other plants; the establishment of a sewerage system; the protection of the municipality from overflow, from caving, banks, and other like dangers; improving or paving streets; and for the liquidation of existing debts of the municipality, may issue the bonds or other obligations of the city, not to exceed in amount, including all outstanding bonds, seven per centum of the assessed value of the taxable property of the municipality, unless authorized by two-thirds of the qualified electors thereof; but in no case shall the amount exceed ten per centum of the assessed value. But the limit on the amount shall not apply to bonds or other obligations issued on liquidation or to raise funds to liquidate any indebtedness existing when the amendment becomes operative.” This section is the measure of the city’s right to issue bonds. It prescribes the purposes for which they may be issued, and limits the amount. For all the purposes enumerated, the city may issue bonds amounting in the aggregate to seven per centum of its assessed values, and, with the consent of two-thirds of its qualified electors, may issue bonds up to ten per centum of its assessed value. But the limitation does not apply to bonds issued to liquidate an indebtedness *583existing when the amendment became operative. As to bonds issued for this purpose, the city was left untrammeled, and might have issued bonds to any amount necessary to liquidate its then existing indebtedness; and it may now, without regard to the limit, issue all the bonds needed to liquidate all its present- floating indebtedness which actually existed at the time the amendment was adopted. So far there seems to be no special difficulty in the construction of this amendment. We apprehend that the doubt in the mind of appellant and of the city authorities is whether or not that portion of the present floating indebtedness which did not actually exist at the time the amendment was adopted, but which has since been contracted for the city’s ordinary current expenses, the same not being paid out of current revenues because these were used to pay deficits from former years, may now be provided for by a bond issue which would swell the city’s bonded indebtedness beyond the limits prescribed by the amendment. We resolve this doubt in the negative. The amendment is the measure of the city’s power for the issuance -of bonds. It must be strictly construed. The city’s power is not to be enlarged by strained or doubtful constructions. The fact that the city’s present floating indebtedness is in amount about what it was [November 4, 1902, and that past deficits have been paid out of current revenues, the same thereby not sufficing to pay all current expenses (this process being referred to in the bill -as “borrowing from Peter to pay Paul”), and that this process has left the city a floating indebtedness of about $100,000, does not support the argument that this indebtedness was existing at the time the amendment was adopted. All indebtedness actually incurred since -the adoption of the amendment is within the limitation therein prescribed, and cannot be provided for by a bond issue, which, added to outstanding bonded indebtedness, would- exceed the limit prescribed in the amendment. The decree below is therefore erroneous as to so much of the present floating indebted*584ness as has been contracted since the adoption of the amendment.

Reversed and remanded for a decree in accordance with this opinion.