Town of Vaughn v. Town of Montreal

Wmsnow, J. Sec. 672, Stats. 1898, provides as follows: “Whenever the county board shall form a new town from parts of a town or towns already organized they shall, by their ordinance of division, determine what portion of the indebtedness then legally incurred by such old towns shall be chargeable to the respective portions so detached to form such new town; and such new town shall pay the proportion of such indebtedness so declared chargeable to such detached portions at such time as the same shall become payable; and [304] for that purpose tbe town board of sucb new town shall levy a tax upon all tbe taxable property of sucb portions thereof so chargeable therewith.” The only question presented upon this appeal is whether the annual hydrant rentals falling due after the division constitute “indebtedness then legally incurred,” i. e., at the time of the division. It seems to us entirely clear that this question must be answered in the negative. This court has held,, after careful consideration and review of the authorities, that such payments falling due upon the rendition of services in the future, though fixed by the terms of an existing contract, do not constitute “existing indebtedness,” within the meaning of sec. 3, art. XI, of the state constitution, which prohibits any municipal corporation from becoming indebted to an amount, “including existing indebtedness,” exceeding five per centum of its taxable property. Stedman v. Berlin, 97 Wis. 505, 73 N. W. 57; Herman v. Oconto, 110 Wis. 660, 86 N. W. 681. Possibly by some refined reasoning a distinction might be drawn between the terms “indebtedness existing” and “indebtedness incurred,” but for all practical purposes they seem to be synonymous. A debt which exists must have been incurred, and, on the other hand, if it has been incurred, and has not been in some way discharged, it exists. While the contract to pay hydrant rental in the future' as water is furnished is a contract obligation, no indebtedness accrues until the water has been furnished, and the statute speaks not of contract obligations in general, but of contract obligations which have become indebtedness. By the Court. — Order reversed, and action remanded witH directions to sustain the demurrer to the complaint.