City of Belton v. Brown-Crummer Inv. Co.

BRYAN, Circuit Judge. The city of Bel-ton, Tex., issued several series of funding warrants, for the purpose of taking up and retiring outstanding original warrants of equal amounts issued to defray current expenses, and one series of original paving warrants. At the suit of a holder of several warrants of each series and class, the trial judge held that the warrants were valid and binding obligations of the city, and entered judgment for the plaintiff. The city assigns error, and contends: First, that the funding warrants were not shown to be valid, because the proof failed to show that the original warrants, upon which the funding warrants were based, were duly authorized, or issued for a proper purpose, or that provision had been made for their payment. The warrants which plaintiff held were received in evidence, and they purport to be “for the purpose of funding an equal amount of warrants of said city heretofore duly and'legally issued for current expense purposes.” The ordinances under which they were issued contain like representations, and recite that all conditions and things required to be done “have been properly done and performed.” There was evidence for the city to the effect that its minute books fail to disclose authority, either by ordinance or resolution, for the issuance of the original warrants ; but, as against this, it was shown that the minutes were poorly kept in a loose-leaf book, and city officials testified that ordinances or resolutions, authorizing the original warrants, were in fact adopted; Second, that the paving warrants were invalid, because, (a) the ordinance under which they were issued purports to. have been adopted at a regular meeting of the city council on June 30, 1921, whereas a rule of the city council provided that regular meetings should be held on the second Wednesday of each month; and (b) the city, prior to the issuance of such warrants, had already exceeded [71] the limit -of bonded indebtedness authorized by its charter and the laws of Texas. The minutes show that all members of the city council were present and voted for the ordinance under which the paving warrants, aggregating $30,000, were issued. The funding warrants were prima facie valid. The burden was on the city to prove that recitals contained in them and in the ordinances which authorized them were untrue. This well-established rule of law was recognized and applied in a similar suit against the same city by the Court of Civil Appeals and the Supreme Court of Texas. See City of Belton v. Harris Trust & Savings Bank (Tex. Civ. App.) 273 S. W. 914, and (Tex. Com. App.) 283 S. W. 164. The loose-leaf minute book, especially in its poorly-kept condition, was insufficient to overcome the prima facie presumption of regularity which attached to the warrants and the positive evidence of city officials to the effect that the warrants were authorized by ordinance or resolution. It can make no difference whether the ordinance authorizing the paving warrants was adopted at a regular or a special meeting of the council, in view of the proof that all the members of the council were present and participated in its adoption. The question whether the city was without power to issue the paving warrants because it had already exceeded the limit of its bonded indebtedness is to be determined by the laws and Constitution of Texas. In the ease of City of Belton v. Harris Trust & Savings Bank, supra, the provisions of the city’s charter which are here involved, and the statutes that control it, are fully discussed, and the conclusion is reached that the Home Rule Enabling Act (article 1096d, Vernon’s Sayles’ Revised Statutes of 1914), under the provisions of which the limit of indebtedness had not been reached, had been adopted by the city charter, and was controlling. On this question we accept the construction of the courts of Texas. The judgment is affirmed.