People ex rel. Board of Water Commissioners v. Common Council

Marston, J: The legislatule in 1813 passed an act to incorporate a board of water commissioners for tire city of Bast Saginaw, to supply tbe city with pure water, and to provide for the completion and management of the Bast Saginaw water works. The first section of this act authorized and empowered and made it the duty of the common council of Bast Saginaw to appoint five persons, residents and freeholders of the' city, who, and their successors, should be a body corporate with certain powers, and amongst others, to purchase, hold and convey personal and real estate, to make by-laws, ordi — 166 — nances, rules and regulations, and do all legal acts that might be necessary and proper to carry out the. effect, intent and objects of the act. The fourth section gave the board power to borrow, from time to time, and for such time as they should deem expedient, a sum of money not exceeding three hundred thousand dollars, for the purpose of constructing water-works, upon the credit of the said city of East Saginaw, with authority to issue bonds pledging the faith and credit of said city for the payment of the principal and interest thereon, which bonds were to be signed by the board, or a majority of them, and by the mayor of said city, and payable at a period not exceeding twenty years from their date. The amount authorized to be issued was afterwards increased to three hundred and fifty thousand dollars. Section twenty-two gave said commissioners the custody and control of all money, revenues, accounts and bonds belonging to said board, with authority to deposit the same as they might deem for the best interests of the city, also authorized them to appoint a treasurer, who should pay out such moneys as the board should order. Section twenty-three made it the duty of said board, whenever their receipts from water rates or other sources accumulated to a certain amount, with the aid of the mayor of the city, to invest the same in stocks, or upon real estate, such investment to be made in the name of said board, and in such manner as to make the same available for the payment of the principal and interest of such bonds; and then provided as follows: “It shall be the duty of said commissioners to pay the interest on such bonds, and, as fast as such surplus fund will permit, also the principal, as the bonds become due, as funds for such purpose shall from time to time accumulate. The said commissioners may, when they have funds for that purpose, purchase the bonds so issued as aforesaid, whether the same shall have become due or not; and in case the said commissioners shall at any — 167 — time not have funds on hand sufficient to meet any of the said bonds at the time when they shall become due, they shall have the right to issue new bonds for such amount as they shall deem expedient, in the place of bonds so becoming due as aforesaid.” Section twenty-four: “It shall be the duty of said commissioners, at least ten days before the time fixed by the charter or ordinances of said city for assessing city taxes, to make a special report to the common council of said city what, if any, sum will be needed by said commissioners, over and above the revenue of said board, to meet the payment of interest or principal of the' bonds issued as aforesaid ; and it shall be the duty of the common council to raise said amount by special tax, in the same manner as general taxes, to be designated a water tax; and the said amount shall be paid over to said board by the treasurer of said city, weekly, as collections are made.” The petition and answer assume that under and in pursuance of this act the common council of East Saginaw did appoint five commissioners, who qualified and entered upon the discharge of their duties as provided in said act. The petition sets forth, that under and by virtue of the authority in them vested by said act, the said board have, from time to time, for the purpose of constructing water-works for said city, borrowed money upon the credit of said city, .and have duly and regularly, in the manner provided in said act, issued bonds to the amount of three hundred and fifty thousand dollars; that there will fall due November 1, 1875, fourteen thousand dollars, and May 1, 1876, fourteen thousand dollars, interest upon said bonds, and on the first day of May, 1876, fifty-one thousand five hundred dollars principal; that there is not, and will not, at the maturity of said bonds, be funds on hand to meet and pay the same unless it is raised by a special tax as in said act provided; that ten days previous to the time fixed by the charter of said city for assessing taxes, a special report was made — 168 — to tlie common council, that the sum needed by said commissioners, viz.: To pay interest on three hundred and fifty thousand dollars, twenty-eight thousand dollars; to pay water bonds which fall due May 1, 1876, fifty-one thousand five hundred dollars; that the common council directed the sum necessary to pay the interest to be raised, but refused to raise the amount necessary to pay the bonds falling due May 1, 1876. The issuing of these bonds, and the fact that interest and principal will fall due at the time above stated, and that the common council refuse to raise money to meet the principal, are admitted by the answer. In the brief submitted on the part of the respondents they insist, that the relators have no interest in this matter not common to other citizens, except to maintain the credit of the board, and that the application should therefore have been upon the relation of the attorney general; second, that there is another remedy in this case: the bondholders may have an action against the city; and a mandamus will not, therefore, be granted. It is very clear that the relators have an interest in this case which is not common either to the citizens of the state or of Bast Saginaw. It is made the official duty of relators, as commissioners, to pay both the principal and interest on the bonds issued by them as the same become due, and while it is true that the bond-holders would have a remedy against the city in case the bonds were not paid at maturity, yet that would not justify the relators in sitting quietly by, knowing that these bonds were maturing, and yet make no effort whatever to provide funds to meet them. Their interest did not cease upon the issuing and negotiating of these bonds, nor even upon presenting to the council a report showing the amount of money necessary to be raised to pay them. It still remained their duty to take such other and further measures as might be necessary to accomplish the end sought, i. e., funds to meet the bonds at maturity. The case of State v. Haben, 22 Wis., 660, cited by conn — 169 — sel for respondents, is not in point. Had. it been the duty of the city treasurer to pay these bonds upon the order of the board of water commissioners, and had such an order been given the bond-holders, and payment thereon refused, the cases would have been parallel. In the case of The State v. The City of Cincinnati, 19 Ohio, 178, under circumstances more closely resembling those in the present case, the writ was granted. It is insisted in the third place, that the act in question, and particularly section 24, if construed to be mandatory, confers upon the board powers which cannot be tolerated under our system of local government; that such boards do not directly represent the people^ but are subordinate to the will of the council; that this must- necessarily be so for the reason that the most disastrous consequences might follow from permitting- several boards to dictate to the council the amount of taxes they should raise in each year; that while the legislature may interfere in the affairs of a municipality, in so far as the latter acts as the agent of the state, yet local matters must be left to the people of the city to regulate as they see fit. How far it is competent to subject the authority of the common council of a city, as to the amount of taxes necessary to be raised for city purposes, to the control of boardwhich do not represent a different municipality co-existing within the same city, as a school-district, is a very serious question. That such boards may bo provided for, as the agents or assistants of the common council, is beyond question. But if they can be given powers beyond this, if they can control the common council in its discretion, as to the amount of moneys to be raised for local purposes, and compel it to raise such sum as they may deem necessary, it is very evident that the power and authority of the council may be so abridged that it will become the mere ministerial agent of such boards, having no discretion whatever as to the amount of taxes to bo raised. Upon this question we — 170 — do not at present desire or intend to express any opinion, preferring to leave it until it becomes necessary to deal with it. As a general rule, the common council of a city should be allowed to determine what taxes ought to be levied for city purposes, and there ought to be no interference by the courts, with its discretion, except on the most imperative reasons. We are not satisfied that such reasons exist in this case. The relators, under section 23, have power to issue bonds to meet payments becoming due in 1876, and it does not appear that if a new issue is made they cannot be negotiated; indeed, we may infer the contrary. The relators therefore have a remedy in their own hands. They will not necessarily be without funds to meet the bonds falling due in 1876, so that it does not appear that any mischief will follow from a refusal to grant the writ. The writ of mandamus is, in most cases, discretionary, and where, as in this case, the common council have apparently acted in good faith, and have refused upon the ground that the taxes to be raised for that year were already too high, so that the question as between the common council and the relators was one more of policy than right or power, and as there are no evils appearing or being threatened, we áre of opinion we may justly exercise our discretion and abstain from interfering. We cannot undertake to correct all differences of opinion^ or, indeed, wrongs, by this writ, but only such as appear so serious as to demand interference. The writ must be denied, but without costs to either-party. The other Justices concurred.