City of Rochester v. Quintard

The only question involved in the controversy is that of the constitutionality of an act of the legislature of this-state, passed April 20,1892, which purports to authorize the city of Rochester to issue bonds to pay for an additional supply of water. Laws of 1892, chap. 358. The maximum amount of the bonds to be issued was fixed by the act at $1,750,000 and the-maximum period for which they should run at fifty years.

Pursuant to the provisions of this act bonds were issued to the-amount of $1,000,000, par value, which, by their terms, were to-become due in fifty years, and were redeemable at any time after* twenty years from their date.

At a sale, under the provisions of the act, of the bonds so issued, the defendant became the purchaser of bonds of the par value of $300,000, at the price of $305,250. Subsequently he declined.

The objection specified by the defendant relates solely to the period which, by the act in question, was fixed for the running, of the bonds; and in that respect it is contended in his behalf." that the act is in violation of § 11 of article 8 of the constitution. The section is, in full, as follows :

“ § 11. No county, city, town or village shall hereafter give-any money or property, or loan its money or credit, to or in aid of any individual, association or corporation, or become, directly or indirectly, the owner of stock in or bonds of any association or corporation; nor shall any such county, city, town or village be allowed to incur any indebtedness except for county, city, town or village purposes. This section shall not prevent such county, city, town or village from making such provision for the aid or support of its poor as may be authorized by law. No county containing a city of over one hundred thousand inhabitants, or any such city, shall be allowed to become indebted, for any purpose or in any manner, to an amount which, including existing indebtedness, shall exceed ten per centum of the assessed valuation of the real estate of such county or city subject to taxation, as it appeared by the assessment-rolls of said county or city on the-last assessment for state or county taxes prior to the incurring of such indebtedness; and all indebtedness in excess of such limitation, except such as may now exist, shall be absolutely void, except as herein otherwise provided. No such county or such city whose present indebtedness exceeds ten per centum of the assessed valuation of its real estate subject to taxation shall be allowed to become indebted in any further amount until such indebtedness shall be reduced within such limit. This section shall not be construed to prevent the issuing of certificates of indebtedness or revenue bonds issued in anticipation of the collection of taxes for amounts actually contained, or to be contained, in the taxes for the year when such certificates or revenue bonds are issued and payable out óf such taxes. Nor shall this section be construed to prevent the issue of bonds to provide for the supply of water, but the term of the bonds issued to provide for the supply of water shall not exceed twenty years, and a sinking fund shall be created on the issuing of said bonds for their redemption, by raising annually a sum which will produce an amount equal to the sum of the principal and interest of said, bonds at their maturity.

“ The amount hereafter to be raised by tax for county or city purposes, in any county containing a city of over one hundred thousand inhabitants, or any such city of this state, in addition to providing for the principal and interest of existing debt, shall not, in the aggregate, exceed in any one year two per centum of" the assessed valuation of the real and personal estate of such

It will be seen that, by the terms of this section, no restriction whatever is laid upon any city in respect to the amount of indebtedness to be incurred by it, for city purposes, except upon cities having, each, a population in excess of one hundred thousand inhabitants, and that even this restriction is subject to an ■exception in favor of the issue of bonds to provide for a supply of wáter. The restriction is that no city of more than one hundred thousand inhabitants shall incur an indebtedness to an .amount exceeding ten per centum of the assessed valuation of its real estate,and that all indebtedness in excess of such limitation shall be void, “ except as herein otherwise provided." An exception is, thereafter, provided, to the restriction thus imposed, in favor of the issue of bonds for the expense of procuring a water supply for such city and its inhabitants, and to this exception is attached the proviso that the term of the bonds, so issued, shall not exceed twenty years. It is plain that the exception cannot be wider in its application than the restriction itself, nor the proviso wider than the exception to which it is attached.

It was unnecessary to provide an exception in favor of a water supply for cities of less than one hundred thousand inhabitants, because no restriction was laid upon them in respect to any indebtedness for municipal purposes; and equally unnecessary to provide an exception in behalf of cities of more than one hundred thousand inhabitants except in case where the total indebtedness of such city, including that to be incurred for the purpose mentioned, would exceed the limit prescribed.

This construction of the constitutional provision in question, taken as a whole, gains support from a consideration of the history of the successive enactment of its several parts. By the constitution of 1846 (art. 8, § 9), it was made the duty of the legislature to restrict the power of cities in respect to borrowing money, contracting debts and loaning their credit, but no limit was set to such power by the constitution itself. A brief section numbered 11 was added to article 8 by the amendment of 1874. It consisted of the first two sentences of the present § 11, and forbade any city to loan its money or credit to any individual association -or corporation, or to incur any indebtedness except for city purposes. All the remainder of § 11 was added by the amendment ■of 1884, and it contains the only provisions of our present constitution in respect to the amount of debt to be incurred by any of the cities of the state Its restrictions, as we have seen, apply to cities of more than a specified population; it provides an exception to those restrictions in the case of a debt to be incurred for a specified purpose, and it prescribes the term of the bonds which may be issued in the exceptional case provided for.

íf these views embody the correct construction of the. constitutional provisions which we have been considering, then the city of Eochester, although (by reason of its population) subject to the restriction imposed by the amendment of 1884, is not required to avail itself of the exception thereto for the reason that

We thus reach the conclusion that the act of the legislature under which the bonds in question were issued is not violative of any provision of the constitution, but is valid; and that the contract of the defendant to purchase bonds issued under its provision is binding upon him.

Judgment should be directed for the plaintiff on the submission, with costs.

Macomber and Lewis, JJ., concur.