Gross v. City of Bowdle

McCOY, J. From an order sustaining a demsurrer to the complaint, on the ground, that the same failed to state a cause of action against the defendants, plaintiff appeals. This appeal involves the constitutionality of certain bonds proposed to be issued by and on behalf of defendant city. Appellant contends that said bonds will be illegal and unconstitutional in that there has been no majority vote of the electors of said municipality authorizing the same, and that a debt would thereby be created in excess, of the constitutional limit by virtue of the provisions of section 4, art. 13, State Constitution. Respondent contends that the said constitutional provisions' have no application to the issuance of the bonds in question. We are of the opinion that respondent is right in its contention. It appears from the allegations of the complaint that the said city of Bowdle duly authorized and established a special assessment district for the construction of a certain sewer system, and duly and legally made a special assessment and special assesment roll assessing the cost of construction of said sewer against each and every lot and parcel of land fronting and abutting upon the streets and alleys upon and along which said sewer system is to be constructed, designating the names of the respective owners, describing each lot and parcel of land, and the specific amount of the special assessment against each lot and parcel of land, in the manner provided by law; and did by ordinance provide that such special assessments should be divided into 10 equal annual installments; that thereafter the said city did by ordinance provide for the issuance of the bonds in question for the purpose of paying and funding the cost of the construction of said sewer without any election authorizing the same; that by the issuance of said bonds the constitutional limit of indebtedness of said city would be exceeded by at least $75,000; and that appellant is a taxpayer owning property not within the said sewer district and which would not be affected by said special assessments. It is conceded that said bonds were to be issued under and [134] by virtue of the provisions of section 6409, Code 1919. We are of the opinion that the learned trial court properly sustained the ■demurrer to said complaint. The issuance of said bonds, under, the circumstances, would not constitute a “debt” within the meaning of the said constitutional provisions; nor would an. election be necessary to authorize the issuance thereof. These bonds are to be issued only for the purpose of funding the said special assessments which special assessments constitute the real indebtedness. These bonds will be paid by the funds to be collected from the said special assessments, and not by any general taxes that might be assessed against the property of the appellant in other parts of the city not within the said special assessment district. In re Rural Credits Law, 38 S. D. 635, 162 N. W. 536; National Life Ins. Co. v. Mead, 13 S. D. 37, 82 N. W. 78, 48 L. R. A. 785; 79 Am. St. Rep. 876; Id., 13 S. D. 342, 83 N. W. 335; Walling v. Lummis, 16 S. D. 349, 92 N. W. 1063; Hyde v. Ewert, 16 S. D. 133, 91 N. W. 474. The order appealed from is affirmed.