Fuller v. Heath

Mr. Justice Dickey delivered the opinion of the Court: It is insisted by counsel for appellant, that the appropriation ordinance, on which the tax levy is founded, is void because it was not passed at the time required by law. By the charter (Gen. Laws of 1872, Rev. Stat. 1874, p. 211,) the general election for city officers occurs annually on the 3d Tuesday of April (sec. 48). Only half of the aldermen of the city are chosen each year—the term of such officers being two years. Hence the city council, immediately before the annual election, in its membership, is different from the city council immediately after the election. The charter also provides : “The fiscal year * * * shall commence at the date established bylaw for the annual election * * * or at such other times as may be fixed by ordinance,” (sec. 88). An ordinance had been adopted by the city council of Chicago, changing the time for the commencement of the fiscal year, and fixing it on the first day of January of each year. Section 89 provides that the city council shall, within the first quarter of each fiscal year, pass an ordinance, to be termed the annual appropriation bill, etc.; and that no further appropriation shall be made, at any other time within the fiscal year, without the sanction of a majority of the legal voters, by petition or by election called for that purpose. It is insisted by counsel for appellant, that the language of the charter, permitting the city council to change the beginning of the fiscal year, is void and inoperative; hence, it is contended, the fiscal year, by law, began on the third Tuesday of April, and that this ordinance, not having been passed in the first quarter of the fiscal year, and not having the sanction of a majority of the legal voters in any mode required by law, is void. It is contended, the last clause of section 88 of the charter, “ or at such other times as may be fixed by ordinance,” is void because its operation is to authorize the exception of some cities from the application of the law, which, but for such exception, would be their organic law; that the law, by the constitution, must be uniform as to all cities, and the General Assembly can not delegate power to change the law, for this would be to enact law which, as to some cities, is local and special. In our view this position is not sound. The constitution nowhere requires that the fiscal year of all cities, under the general law, shall begin on the same day. The law, as it is, applies to all such cities alike. The substance of the provision is, that the beginning of the fiscal year may be fixed by ordinance, and in the absence of such ordinance, the fiscal year must begin on the third Tuesday of April. We can not perceive that this provision is either local or special. The beginning of the fiscal year having been fixed by ordinance in the city of Chicago on the first day of January, the general appropriation ordinance passed on the 30th of March was within the first quarter of the year, as required by law. We find no cause in this to question its validity. It is strenuously urged that these warrants are contracts of the city, and of such character that they impose upon the city a new liability, and hence the city thereby becomes further indebted, in violation of the provision of the constitution limiting the extent to which a city may lawfully become indebted, and that therefore the issue of such warrants is unlawful. The views of this court were carefully expressed in the case of City of Springfield v. Edwards, 84 Ill. 626. It was there said, in substance, that a city already indebted beyond the constitutional limitation can not, lawfully, incur any new debt or liability, but that a city so situated may, to defray current expenses, anticipate the collection of taxes in case the taxes are actually levied, provided that the mode of appropriating or setting apart for that purpose a part of the taxes be such as to impose no liability upon the city—such that one thing is simply given for another. It is said: “Where a warrant or order, payable from a specific appropriation of the tax levied but not yet collected, is accepted in exchange for services rendered or to be rendered, or for materials furnished or to be furnished, so that there is, in fact, but the exchange of one thing for another, the duty remains for the proper officers to collect and pay over the tax, in accordance with the appropriation, but obviously, for any failure in that regard, the remedy must be against the officers and not against the corporation.” It is not perceived that the issuing of the warrants, mentioned in the bill, fail, in any material particular, to comply with the requisites thus laid down by this court. In fact they seem to be drawn and issued in strict compliance therewith. The bill shows that the taxes were actually levied. The warrant is drawn upon and payable only out of a particular fund or appropriation, and on its face it does not purport to impose upon the city any liability. The complainant, by his bill, does not charge, as a fact, that this warrant is not, when issued, accepted as a full and final payment for the services or materials for which it is given. It is not shown that “one thing” is not “simply given and accepted in exchange for another.” We are referred to authorities to show that drafts and orders of like form have been held to impose liability upon the municipal corporation in whose behalf they are issued, and to support the position that such instruments are contracts of the municipal corporation, and in the nature of promissory notes, and it is insisted that there is in this case an implied promise, on the part of the city, that the sum named in the warrant will be paid. We do not think so. All persons are bound to know the law. And all contracts and all instruments of transfer of property, or any. interest therein, must be construed as though the law of the place of the contract or instrument were written out in full upon the face of the contract or instrument. In this case these warrants are to be construed in the same manner as if it were written out on its face that no city can make a valid contract by which it can become indebted beyond the constitutional limit; and that even for meeting its necessary current expenses, no city can anticipate the collection of taxes for such purpose unless the tax for that purpose be actually levied, and then only by an exchange of a warrant drawn upon the proper fund, to be paid out of the taxes when collected, for the thing for which the warrant is given, and that by making this exchange, the city can not lawfully incur any liability, but the holder of the warrant must rely solely upon the ability and fidelity of the revenue officers in the collection and payment of the money mentioned in the warrant. With such words written out in full upon the face of the warrant, no one would think of construing these warrants as promises of payment by the city, either express or implied. The drafts and orders construed by the authorities, quoted by counsel for appellant, were not issued under the same state of the law as surrounds the warrants in the case at bar; hence, their construction (though containing the very same words) can not be the same. The law which enters into and forms part of the body of every instrument, is not the same. These warrants, under the law, have no legal effect, except as an assignment, without recourse on the city, made by the city to the holder of the warrant of the part of the uncollected taxes mentioned in the warrant. This is the legal effect, and the only legal effect, of these instruments. They are muniments of title to the holder, without covenants on the part of the city. This court has heretofore so declared. In Law et al. v. The People ex rel. 87 Ill. 400, this court, speaking of the city of Chicago, said, “ A corporation which has reached the constitutional limit of its power to create indebtedness, may, when a tax is levied, but not collected, draw against the fund thus levied and provided, although not in the treasury, and thus appropriate and virtually assign the amount specified in the warrant on the treasury to the person to whom it is issued and delivered; and that amount being (thus) assigned or set apart to'him, when collected, he has a right to receive; and it becomes the duty of the officers to collect and pay to him, and failing in their duty, he would have an action against them for its recovery. But with a corporation thus situated, the legal effect of the issuing and receiving the warrant is, that the person receiving an assignment or an appropriation (in this mode) of so much of the specific tax already levied (and against which the warrant is drawn), by receiving it discharges the corporation from all liability on account of the services or articles for which it is drawn, and agrees to look to the tax thus levied and appropriated, and to the officers, for his pay; and he thereby discharges the corporation from any and every kind of liability therefor. In such case the warrant is given and received in full satisfaction for the services rendered or the materials furnished. Where a corporation is thus situated, and it hires labor or purchases materials (as it can incur no debt), it may, in thus hiring or purchasing, agree to thus transfer so much of the tax then levied, as will pay for the same, to the person performing-labor or furnishing materials. And in case * * * the agreement was not so expressed in terms, the law would imply such agreement, and not that the corporation * * * could be sued and a recovery had upon such a contract.” As to the views here expressed the court was unanimous, and we see no reason to qualify what was there said. The warrants in the case at bar seem to be in strict conformity with the ruling in the Edwards case and also in the Law case, and we hold that the city in no manner whatever became indebted by the issue thereof. It would, no doubt, be better that these certificates should, in some apt form, state, on their face, that the same are accepted in full satisfaction of the services rendered o^materials furnished, and that the city incurs no liability by the issue of the certificates. All men dealing in such certificates would then be protected against misapprehension. This, however, would not affect or change the legal effect of such certificates. It is suggested that it is unlawful to incorporate in the warrant a statement that “ this warrant is also receivable in payment of city taxes for the year” mentioned in the warrant: In support of this suggestion, we are referred to the provisions of the general act, which is the charter of Chicago, requiring that the annual appropriation bill shall specify the amount appropriated for each object or purpose, (sec. 89,) and directing the treasurer to keep a separate account of each fund or appropriation and the debts and credits belonging thereto, (sec. 93,) and requiring all warrants drawn upon the treasurer to state the particular fund or appropriation to which it is chargeable. It is suggested that, by reason of these provisions, a portion of all the taxes collected müst be set apart for each purpose mentioned in the annual appropriation bill, and this portion must bear the same proportion to the whole amount' collected, which the sum appropriated for that purpose bears to the whole amount of the annual appropriation. This does not seem to be a necessary consequence. It may turn out that the entire amount of the appropriation made for one purpose may not be needed for that purpose, while the whole of the appropriation for some other purpose may be needed. In such case, if the amount of all taxes collected be sufficient to meet all the necessary expenses, it is not perceived that there is anything in the statute to forbid the application of the funds in the treasury to the full payment of the sums needed, to exhaust one appropriation, even if that should not leave money enough in the treasury to cover the full amount of another appropriation, when the exigencies of the city do not require that the whole of the latter appropriation should be expended. Be this as it may, these requirements are found in the general law of 1872, (re-enacted in the revision of 1874,) and since that time it is expressly provided by statute, that “ city comptroller’s warrants or orders on the city treasurer shall be receivable by the collector in payment of city taxes.” (Laws of 1877, p. 171.) Whatever, therefore, may have been the true construction of the act of 1872, its provisions can not override the subsequent act of 1877, but if inconsistent with that act, must yield to its express provision that such warrants are, by law, receivable for city taxes. It is also claimed, that the city of Chicago has no lawful authority to levy taxes or appropriate money for school purposes, and as a consequence from this proposition, the item in the appropriation ordinance for 1878 of $590,682.44 is without authority of law and void, and hence that amount of the tax levy for that year is void, and that on this ground the injunction sought by the bill ought to have been granted. It is not perceived why the officers of the city ought to be forbidden to issue lawful warrants for lawful purposes, even if a part of the tax levy be unlawful and void. This is not a bill to enjoin and forbid the collection of a part of the tax levy, nor to forbid the issuing of warrants for school purposes. The bill does not contain any allegation that this tax for school purposes is void, or any allegation that any warrants are about to be issued for school purposes, or any prayer that the application of money to school purposes shall be forbidden. We can not, however, sanction the proposition that the city of Chicago has been shorn of its power to support its schools. Before the adoption of the present constitution, the city of Chicago was, by law, given the title of all school lands within its boundaries, and the share of the school fund belonging to its people, and was clothed with the power of collecting taxes for school purposes, and charged with the duty of supporting its schools. 'The laws on this subject in force at that time, whether embodied in form in the charter of the city, or in amendments to the charter, or in laws not purporting in form to be a part of its charter, must be regarded as a part of the school laws, and not as strictly a part of its charter for strictly city purposes, (Speight et al. v. The People, 87 Ill. 600). The General Assembly, before the constitution of 1870, had _ provided for the establishment and support of free schools in every part of the State,—in most cases providing special political machinery for that purpose, and in other cases providing for the use of city officers to accomplish the legislative intention. The constitution of 1870 provided, that “The General Assembly shall provide a thorough and efficient system of free schools, whereby all children of this State may receive a good common school education.” (Sec. 1, art. 8.) And in sec. 22, art. 4, it is declared, “The General Assembly shall -not pass local or special laws * * * providing for the management of common schools.” And by sec. 1 of the schedule it is declared, “That all laws in force at the adoption of this constitution, not inconsistent therewith, * * * shall continue and be as valid as if this constitution had not been adopted.” In construing these provisions of the constitution, this court (in Speight v. The People, supra,) held that there is no limitation in the constitution as to the agencies the State shall adopt in providing this system of free schools, and that the General Assembly has full power to select or prescribe the agencies by which school taxes shall be levied, collected, held and disbursed for school purposes, and that all laws, whether in city charters or elsewhere, designed to affect free schools, may be regarded as school laws—as part of the law intended to provide a system of free schools; and that sec. 22, art. 4, as to the power of passing special laws, relates merely to the management of common schools, that is, to the conduct of. common schools in imparting instruction, and does not relate to the matter of providing the necessary funds for their support. It follows, that neither the adoption as its charter, by the city of Chicago, of the general law relating to cities and villages, nor the passage of the general school law, has modified oi* impaired the former laws authorizing the city of Chicago . (as a public agency) to levy and collect taxes for school purposes. After a careful consideration of all the suggestions in the very elaborate argument of counsel for the appellant, we find no sufficient ground to disturb the judgment of the Appellate Court in this cause. The judgment of the Appellate Court, affirming the decree of the circuit court, is therefore approved and affirmed. Judgment affirmed. Mr. Justice Scott : I concur in this decision for the reason that I think it overrules the cases of Edwards v. The City of Springfield, 84 Ill. 626, and Law v. The People, 87 Ill. 385. For an expression of my views on the question discussed, reference is made to my dissenting opinion in the Law ease, supra.