Robertson v. Breedlove , 61 Tex. 316 ( 1884 )

Willie, Chief Justice.—

The objection taken in the demurrer of the defendants below to the jurisdiction of the district court is not insisted upon here. This court has so frequently decided in favor of such jurisdiction that we need only refer, for a disposition of. the point, to a few of the leading decisions in which the question has been settled. County of Anderson v. Kennedy, 58 Tex., 616; Blessing v. City of Galveston,. 42 Tex., 641; George v. Dean, 47 Tex., 73.

The sole question for our decision is: Had the county of Washington, at the time the commissioners’ court took action upon the subject, power to issue negotiable bonds due and redeemable after the lapse of five, ten and fifteen years, and bearing interest from date, for the purpose of raising money to build a court-house; and to levy an annual tax of one-fourth of one per cent, to pay the interest accruing upon these bonds and provide a sinking fund for their redemption?

In our opinion the act of February 11,1881, has no bearing upon this question. That statute by its very terms applies only to such counties as had no court-houses at their county seats, and not to a county whose court-house was merely insufficient for the public business or unsafe for the custody of the public records.

We do not think there is anything in the position taken by the plaintiffs wherein they join issue with the commissioners’ court as to the character and condition of the court-house of Washington county, and claim that it is sufficient for all the purposes to which such buildings are usually applied. We think the intention of the law was to leave that to the discretion and judgment of the commissioners’ court, and to make their decision upon the "question final. They are presumed to have been selected with a view to their capacity for passing upon such matters and their disinterestedness in the subject, and it would not be proper to allow the opinion of persons not thus selected, and who might be interested in preventing the levy of a tax for the purpose of building a court-house, to prevail over the judgment of the court exercised as provided by law.

We must consider the question of the legality of the action of the commissioners’ court in view of the law as it stood at the time the resolutions complained of were adopted.

The ninth section of the eighth article of our constitution authorizes counties to levy a tax of not more than fifty cents on the hundred dollars, for the erection of public buildings. The same authority is reiterated in effect in art. 1515 of the Revised Statutes, and in sec. 1, ch. 31, of the acts of 1879. By art. 1514 of the Revised Statutes it is made the duty of the county commissioners’ courts to provide and keep in repair court-houses, jails and all necessary public buildings.

In none of these sections is power given to issue bonds or borrow money for the purpose of erecting court-houses, and if Washington, county possessed this power at the time it took the action sought to be enjoined, it must have been by virtue of an implied and not an, express authority.

The question of the implied right of municipal corporations to. borrow money or issue bonds with all the qualities of paper negotiable by the law merchant has undergone frequent adjudication in the American courts. It has also been extensively discussed by the-ablest elementary writers and commentators upon the subjects to. which the question properly belongs. The weight of authority, so, far as the state decisions are concerned, seems to favor the power;; the majority of elementary writers are decidedly opposed to it. Mills v. Gleason, 11 Wis., 470; Bank v. Chillicothe. 7 Ohio, part 2, p. 31; Williamsport v. Commonwealth, 84 Pa. St., 487; Clarke v. School District, 3 R. I.. 199; City of Galena v. Corwith, 48 Ill., 423. Contra, Hackettstown v. Swackhamer, 37 N. J. L., 191; Knapp v. Hoboken, 39 N. J. L., 394; Dent v. Cook, 45 Ga., 323; Hamlin v. Meadville, 6 Neb., 227; Beaman v. Board of Police, 42 Miss., 238; Capmartin v. Police Jury, 23 La Ann., 190; Dillon on Mun. Bonds, 12, 13, 14; 1 Dillon on Mun. Corp., § 117 et seq.; Burroughs on Pub. Sec., ch. V; 2 Dan. on Neg. Inst., 1527 et seq.

In the supreme court of the Hnited States, where the point is most frequently raised, the question is in a very unsettled state, and some of the decisions of that court seem difficult to reconcile with each other. Police Jury v. Britton, 15 Wall., 566; Wells v. Supervisors, 102 U. S., 625; The Mayor v. Ray, 19 Wall., 484; Lynde v. The County, 16 Wall., 6; Hitchcock v. Galveston, 96 U. S., 341. See, also, Gause v. Clarksville, 5 Dillon, 165.

It is to be noted, however, that whenever, in that tribunal, the power has been sustained, it has been by a divided court. Whenever it has been denied, the court has been unanimous.

The decisions, too, have been made to rest more or less upon the policy of the particular state in which the cases have arisen in reference to the issuance of negotiable bonds by municipal corporations. See authorities supra.

It is further to be remarked that in all cases to which • we have had access the question has arisen after the bonds have been issued and passed into the hands of parties who have paid value for them.

Moreover, with but few exceptions, where the implied power we are discussing has been sustained, the corporations making the securities have been cities and not counties, as in the present instance.

Fortunately, in this conflict of views, we are not forced in the present case to decide upon the abstract question of the right of municipal corporations proper to borrow money or issue negotiable instruments for the purpose of carrying out a duty imposed upon it by law.

The present case is one where a county and not a chartered city, is claiming the right to issue negotiable securities to obtain money for a public purpose. The bonds have not been issued, and the effort of the plaintiffs was to prevent their being placed upon the market, and it is not a case where a recovery is sought upon the bonds by an innocent holder.

Some of the courts and law writers heretofore referred to draw distinctions between the power of a chartered city and that of a county to exercise the implied power of borrowing money and issuing negotiable instruments to secure its return. This distinction is recognized in at least one of the leading" opinions in which the authority was sustained as to a chartered city (Williamsport v. Com., supra), and is also referred to by Mr. Dillon in his valuable work upon Municipal Corporations, vol. 1, sec. 23.

Again, as we have seen, the general policy of the state may be looked to in order to ascertain whether or not an unexpressed power of this character may be implied.

If the constant and invariable rule is to confer upon counties by express legislation the right to issue these securities, when it is intended that it shall be exercised, it is but a fair conclusion that it was the intention to confine its exercise tocases when expressly granted.

This was the invariable rule in Texas before the adoption of the present constitution, and since then, in obedience to the second section of article 11, the grant has always been by general law.

We think this a fair indication of the policy of our state upon the subject, so far as the legislature could shape that policy. By a reference to our constitution, too, it will be seen that in some instances where municipal corporations are authorized to incur indebtedness, express power is given to issue bonds and levy a tax to redeem them. Art. XI, secs. 5 and 7. It may be fairly inferred from this that its framers did not intend that this poxver should be exercised in any other cases; at least that it should not be deduced from the constitution alone.

Since the adoption of the present constitution there have been two general statutes enacted authorizing counties to issue bonds for the purpose of building court-houses, indicating a continuance of the general policy of the state that they should not exercise this ¡lower by implication from the duty to erect such buildings.

These two acts, that of February 11, 1881, and that of February 4, 1884, xvere not in violation of the constitution, and were passed for the purpose of legalizing xvhat the organic laxv had not itself authorized. The constitution permitted the levy of a tax for erecting public buildings. It did not empower counties to issue bonds for that purpose, nor did it prohibit the legislature from granting this power. These acts gave the authority xvhich the constitution left to the xvisdom of the legislature to confer or refuse as it might deem best for the public good.

FTeither of these acts applied to the present case as it was presented to the court beloxv; the first, for reasons already given; and the second, because it bore date too late to have any effect upon the right of the plaintiffs to the injunction sought in their petition.

The bonds contemplated by the last act are redeemable at any time at the option of the county. The bonds sought to be enjoined were to be redeemed at the option of the county in five, ten and fifteen years.

Any bonds which the county might now issue for the purpose of building would be governed by this last act, and must be redeemable at the option of the county at any time, and such seems to be the fixed policy of our law in reference to all such bonds.

The conclusions which we draw from what has already been said are, that the corporation being a county, a somewhat more stringent construction should be placed upon their implied powers, and especially that of borrowing money and issuing negotiable bonds. That the policy of our law and the universal custom of our state having been to grant expressly to counties this power when its exercise is desirable, the failure to grant it in cases such as that presented in this appeal is a strong argument to show that it was properly withheld. The fact that certain classes of counties, viz., those having no court-houses at their county seats, were permitted to issue such bonds, tends strongly to prove that all others were to be denied a similar authority. The further fact that not until the present year have counties, situated as Washington county is, been expressly authorized by law to build new court-houses by the use of negotiable paper, tends strongly to show that heretofore they could not legally do so, at least in the opinion of the legislature.

Lastly, this being a case where no bonds have been issued, but where the attempt to issue them has been stayed by injunction, we think the case is different from those in which the bonds have passed into the hands of purchasers for value, and a different rule of decision may apply. See Dillon on Mun. Oorp. We think this case must be viewed in reference to the policy of our state at the time of the adoption of our present constitution, which was clearly against the right to imply powers of this kind in a county, but to expressly grant them when it was intended they should be exercised. Without intimating what our decision might be if the suit were upon the bonds themselves in the hands of a party paying value for them, we are of opinion that upon a proceeding by injunction like the present, and upon the facts set forth in the bill, the injunction should have been granted.

The county commissioners have authority now, under the act of 1884, to build court-houses by the use of such bonds, but they must comply in all respects with the provisions of that statute.

It may be well to remark in conclusion that the case of Loonie v. City of Galveston, 54 Tex., 517, does "not conflict with the present. That was a case where a city and not a county was interested; where suit was brought upon bonds already issued, and not to enjoin their issuance; and where the bonds were in the hands of the party to whom they had been originally delivered by the city to pay for work done upon its streets, who had agreed to take payment in such securities, and had performed his contract before receiving them. The case is therefore unlike the present in the particular matters upon which this opinion is based, and to these alone the present decision is intended to be confined, and we express no opinion las to the correctness of the view taken by the court in that case.

We think the court erred in sustaining the demurrer to the petition and dismissing the bill, and the judgment is reversed and the cause remanded.

Reversed and remanded.

[Opinion delivered March 21, 1884.]