Mayor of Baltimore v. Gill

31 Md. 375, 1869 Md. LEXIS 119

• Court: Court of Appeals of Maryland
• Decided: November 26, 1869
• Status: Published

Opinion

Bartol, C. J.

delivered the opinion of the Court.

This is an appeal from an order of the Circuit Court of Baltimore City, directing a writ of injunction to be issued, to restrain the appellant, its officers and agents, from acting under, or in any manner carrying out the provisions of a certain Ordinance passed by the Mayor and City Council of Baltimore, which is exhibited with the bill of complaint, and set out in the record.

The bill filed by the appellees alleges that the Ordinance in question is unconstitutional, null, and void.

First. Because it was passed in violation of the provisions of Article 11, section 7, of the Constitution.

And, secondly, because, independently of the restrictions imposed by the Constitution, the Mayor, and City Council of Baltimore, as a municipal corporation, had not the power or authority to pass the Ordinance.

The defendant demurred to the bill, and alleged for cause of demurrer, “ that the complainants have no standing in a court of equity to maintain their suit.”

Two questions arise upon the record, and are necessary to be decided on this appeal.

1st. Is the Ordinance valid and constitutional ?

2d. Have the complainants a right to file the bill for an injunction ?

1. In passing upon the question of the validity of the Ordinance, we shall not enter into an examination of the nature, objects and general powers of municipal corporations ; or consider whether apart from the constitutional restriction, the Mayor and City Council of Baltimore would possess the power to pass the Ordinance in question, without special authority for that purpose being conferred on them by law.

It is quite immaterial to consider that subject in the present case, because, in our judgment, the powers of the Mayor and City Council, with regard to the subjects embraced in the Ordinance have been defined and limited by the express provisions of the Constitution, and the validity of the Ordinance may, therefore, be tested by an examination of its provisions in the light of the restrictions imposed upon the city government by the seventh section, of the eleventh Article of the Constitution.

That is as follows:

“ From and after the adoption of this Constitution, no debt (except as hereinafter excepted) shall be created by the Mayor and City Council of Baltimore nor shall the credit of the Mayor and City Council of Baltimore be given, or loaned to, or in aid of any individual, association or corporation; nor shall the Mayor and City Council of Baltimore have the power to involve the city of Baltimore in the construction of works of internal improvement, nor in granting any aid thereto, which shall involve the faith and credit of the city, nor make any appropriation therefor, unless such debt or credit be authorized by an Act of the General Assembly of Maryland, and by an Ordinance of the Mayor and City Council of Baltimore, submitted to the legal voters of the city of Baltimore at such time and place as may be fixed by said Ordinance, and approved by a majority of the votes cast at such time and place; but the Mayor and City Council may temporarily borrow any amount of money to meet any deficiency in the City Treasury, or to provide for any emergency arising from the necessity of maintaining the police, or preserving the safety and sanitary condition of the city, and make due and proper arrangements for the removal {quaere renewal) and extension, in whole or in part, of any and all debts and obligations, created according to law, before the adoption of this Constitution.”

Without stopping now to construe the several parts of this clause of the Constitution, or attempting to define their precise meaning and extent, it is very obvious that it prohibits the Mayor and City Council from creating any debt for the purpose of aiding in the construction of works of internal improvement, without the sanction of the General Assembly, and the assent of a majority of the legal voters of the city.

In order to determine whether the Ordinance is within the prohibition, we must look at its provisions, and ascertain its true construction, purpose, and effect.

It is sot out at length in the record and need not be repeated here, except so far as may be necessary to point out its main features and operation.

We hazard nothing in saying that no one can read it, without being impressed with the conviction that the City Council must have been sensible of the difficulties which the Constitution interposed in the way of such legislation, and that its phraseology was ingeniously chosen for the purpose of avoiding the restrictions imposed by that instrument.

But in considering it, we must not forget that we are dealing with substance, not with form. It is the thing done, or sought to be accomplished, which must determine the question of the power of the Mayor and City Council to pass the Ordinance. This depends upon the true construction, operation and effect of the whole Ordinance, not upon the form or mere phraseology of some of its parts.

"When it provides in the first section, that one million of dollars shall be raised by the pledge or hypothecation of stock held by the city, it is substantially the same thing as if it provided in terms for borrowing the money. To raise money on a pledge is to borrow it; and the party from whom it is thus obtained actually loans it, although in the Ordinance it is called furnishing the money. When the Ordinance speaks of returning the money so raised, it means simply repaying the money borrowed. So when the Ordinance provides that the money so obtained shall be invested in the bonds of the Western Maryland Rail Road Company, to be secured by mortgage; that it shall be applied only to the construction and equipment of the road, and be furnished only as, and when required for that purpose ; it, in substance and effect, provides for loaning the money to aid in the construction of that work of internal improvement.

Though in the title and body of the Ordinance the word invest is used, and it purports to be a mere change of investment, it is impossible to shut our eyes to the fact that the whole scheme of the Ordinance is to borrow the sum of one million of dollars, to secure its repayment by hypothecating stock of the Baltimore and Ohio Rail Road Company held by the city, not for the necessary or proper use of the city, nor for the pui’pose of making a bond fide change of investment; but for the purpose of enabling the city to loan the same to the Western Maryland Rail Road Company, to aid that company in making and equipping its road.

This purpose, sufficiently obvious from the face of the Ordinance, is made the more manifest by an examination of the message of the Mayor to the City Council, and the report of the committee by whom the Ordinance was prepared, all of which are exhibited with the bill of complaint and found in the record.

It requires no refined or labored argument to show that the Ordinance is within the scope and purview of the constitutional provision, and that the Mayor and City Council were prohibited from passing it, without the previous authority of an Act of Assembly, and the sanction of a vote of the citizens.

The Constitution declares that “ no debt shall be created by the Mayor and City Council,” unless it be first sanctioned by an Act of Assembly, and submitted to the legal voters, and approved by a majority of the votes cast. No language could be broader, or more comprehensive. The only exception is found in the latter part of the section, which permits the Mayor and City Council “ temporarily, to borrow money to meet a deficiency in the city treasury, or to provide for any emergency arising from the necessity of maintaining the police, or preserving the safety and sanitary condition of the city.”

These powers are necessary to maintain the faith of the city, and to secure its peace and good government, they are expressly excepted by the Constitution, and may be exercised within the discretion of the city government; but with this exception, the Constitution expressly forbids the Mayor and City Council from creating any debt.

Does the Ordinance before us propose to create a debt within the meaning of the Constitution ? If this question is answered in the affirmative, then, as its object and purpose are not within the exception, it does what the Constitution forbids.

As we have before said, it provides for borrowing one million of dollars, upon the pledge of valuable property, or assets, held by the city. Such a transaction is, in our judgment, creating a debt within the intent and meaning of the Constitution. It has been argued that no debt is created by the Ordinance, because, by the second section, it is provided that the parties loaning the money shall look for its repayment, exclusively to the stock pledged, and that in no event is the city to be liable or responsible for the return or repayment of any part thereof, even sthough the stock pledged should prove insufficient.

This provision was doubtless adopted for the purpose of avoiding the restriction imposed by the Constitution. "We think it altogether ineffectual for that purpose.

A debt is money due upon a contract, without reference to the question of the remedy for its collection. It is not essential to the creation of a debt that the borrower should be liable to be sued therefor. No suit can be maintained against the State by one of its citizens, and yet debts are created by the State which it is bound in good faith to pay.

If money be borrowed by the Mayor and City Council, which, by the contract, is to be repaid, it is immaterial to inquire whether the city is liable to be sued therefor, or its payment be secured by the pledge or hypothecation of specific property held by the city, it would be in our judgment, equally the creation of a debt, within the meaning of the Constitution in one case as in the other. The Constitution is not to have a narrow or technical construction ; but must be understood and enforced, according to the plain and common sense meaning of its terms.

The plain intent of this section is to restrain the municipal government of Baltimore from borrowing money, except for the purposes and in the manner prescribed, either upon the general credit of the city, or by a pledge of its revenues or assets; thereby creating a debt, and imposing additional burdens upon the citizens, which may directly or indirectly involve increased taxation.

This is not a new question. By the 12th section of the Constitution of New York, the legislature was prohibited from creating a debt, except for the purposes, and in the manner specified and excepted in the Constitution. An Act was passed which provided for borrowing a sum of money, and its repayment was secured by the hypothecation of certain State revenues, to be derived from the canals.

The law contained a provision, similar to that in the Ordinance before us, declaring that “ the State should in no event, be liable to make up any deficiency in the canal revenue, or to redeem the certificates from any other source than the canal revenues, as directed by the Act.”

In the case of Rodman vs. Munson, in the Supreme Court, 13 Barbour, 63, and in Newell vs. The People, in the Court of Appeals, 3 Selden, 9 to 139, the question was considered, whether the Act was in violation of the provision of the Constitution, forbidding the creation of a debt ? In both cases, it was ruled upon full argument, and, in our opinion, upon sound reason, that the act created a State debt within the meaning of the Constitution, notwithstanding the clause exempting the State from all liability to pay any deficiency that might arise in the fund pledged for its payment.

In 3 Selden, 87, Ch. J. Ruggles said: “ The restraints imposed by the 12th section are in effect annulled, if the Legislature may borrow without limit upon a pledge of public property, or the public i'evenue.” That language may be applied with great force and propriety to the present case. To construe the provision of our Constitution, as prohibiting the Mayor and City Council from incurring a debt, for which the city may be liable to be sued, and its property seized; and to permit them to borrow money, and hypothecate the property or assets of the city to any amount within their discretion, to secure its repayment, would indeed be to annul the restraints imposed by the Constitution.

In passing upon this question, we have nothing to do with any inquiry as to the policy or expediency of granting to the Western Maryland Rail Road the aid proposed; that is a question this Court has no power or right to consider.

However necessary such a measure may he for the completion of the road; or however wise and . expedient it may be for the city of Baltimore, looking to her future commercial advantage and prosperity, to aid with her resources or her credit the completion of that work, it is very clear that the Mayor and City Council cannot constitutionally create a debt for that purpose. To do this the Constitution declares that the sanction of the legislature, and the vote of the people are necessary. The Ordinance before us was passed without observing these requirements of the Constitution, and it is our duty therefore to declare that it is null and void.

2. The remaining question for consideration is the right of the appellees to maintain the suit. The bill is filed by them as taxpayers on real and personal property situated in the city of Baltimore; they sue in behalf of themselves and of all other persons similarly interested, who may desire to make themselves parties to the proceeding. The bill also alleges that all the complainants, except Benjamin C. Howard, are citizens and residents of Baltimore city.

The objection raised by the demurrer, and made in. the argument, is that the complainants have no standing in Court, and are not entitled to ask the interposition of a Court of Equity to restrain by injunction the execution of the Ordinance, even though the Court should be of“opinion that it was passed in violation of the Constitution.

It has been argued that the wrong complained of is of a public nature, affecting the whole public alike, and can be redressed or prevented ODly by proceedings instituted on behalf of the public, in which the Attorney-General as representing the State is a necessary party, and that no action can be maintained by individuals, or relief granted, on their suit.

The question of the right of taxpayers, or corporators, to maintain a bill for injunction to restrain the officers and agents of a public municipal corporation from transcending their powers, by disposing of the property and assets of the corporation in an unconstitutional or unlawful way, thereby inflicting damage upon the complainants by increasing the burden of taxation, has been much discussed in the courts of this country, and the decisions upon it are not in all respects harmonious.

The right to maintain such suits has been recognized and enforced by the courts of New York in a number of cases: among them are Christopher vs. The Mayor, &c., of New York, 13 Barb., 567; Milhau vs. Sharp, 15 Barb., 193; Stuyvesant vs. Piersol, 15 Barb., 244; De Baun vs. Mayor, &c., 16 Barb., 392. These decisions have been departed from, and their correctness questioned in some later decisions in that State, especially in Roosevelt vs. Draper, 23 N. Y., 318; Doolittle vs. Supervisors, 18 N. Y., 155; Davis & Palmer vs. Mayor, &c., of New York, 2 Duer, 663.

The earlier decisions have been followed in several of the other States.

In Pennsylvania, in Sharpless vs. The Mayor of Philadelphia, 21 Penn., 148, and in Moers vs. City of Reading, in the same volume, 188, the right of citizens and taxpayers owning property within the limits of a municipal corporation, to file a bill of this kind was unquestioned. In Connecticut the right was distinctly recognized and affirmed in City of New London vs. Brainard, 22 Conn., 552, and Webster vs. Town of Harwinton, 32 Conn., 131; and also in New Hampshire, in Merrill vs. Plainfield, 45 N. H., 126.

Other cases might be referred to, which were cited in argument and have been examined by us, in which opposite and conflicting views have been taken by the Courts on this question. To review them, or to attempt to reconcile them, would protract this opinion to an unreasonable length. ¥e shall not. engage in the task, but shall briefly state the grounds upon which we think this bill ought to be maintained.

It is certainly well settled that public wrongs cannot be redressed at the suit of individuals, who have no other interest in the matter than the rest of the public. Thus an individual cannot maintain a bill of injunction to prevent a public nuisance, unless he suffers thereby some special damage; and the principle governing cases of that kind has been supposed to be applicable to the present case. But it appears from the averments of the bill, that these complainants, as taxpayers of the city, and others similarly situated, in whose behalf as well as their own the bill is filed, constitute a class specially damaged by the alleged unlawful act of the corporation, in the alleged increase of the burden of taxation upon their property situated within the city. The complainants have therefore a special interest in the subject-matter of the suit, distinct from that of the general public.

The people of the State outside of the city of Baltimore, who are not liable to city taxation, can suffer no damage from the illegal act of the corporation complained of in the bill. Why then is it necessary that the State, by the Attorney-General, should be a party to the cause ? That officer is not specially charged with the duty of intervening for the protection of the complainants. The Constitution, Art. 5, see. 2, which defines his powers and duties, does not make it his duty to institute proceedings in a case like the present. He is required “ to commence, prosecute, or defend any suit or action in any of the Courts, on the part of the State, which the General Assembly or the Governor, acting according to law, shall direct to be commenced, prosecuted, or defended.” But it is not made his duty to institute proceedings in a case of this kind, at the instance of individuals ; nor have they the right to require his interposition in their behalf. We have been referred to the Act of 1868, ch. 4-71, sec. 184, which requires the Attorney-General, upon the direction of the Governor, to institute proceedings to restrain corporations from assuming, or exercising any franchise, liberty or privilege not permitted by their charter or allowed by law. But that provision refers exclusively to private corporations, and has no application to the present case. We have discovered no sufficient reason for saying that in this proceeding the Attorney-General is a necessary party, or that the complainants have no standing in a court of equity to maintain the suit.

(Decided 26th November, 1869.)

In this State the Courts have always maintained with jealous vigilance the restraints and limitations imposed by law upon the exercise of power by municipal and other corporations; and have not hesitated to exercise their rightful jurisdiction for the purpose of restraining them within the limits of their lawful authority, and of protecting the citizen from the consequence of their unauthorized or illegal acts.

If the right to maintain such a bill as this be denied, citizens and property-holders residing or holding pi’operty within the limits óf a municipal corporation, would be without adequate remedy to prevent the injury and damage which might result to them from the unauthorized or illegal acts of the municipal government, and its officers and agents.

We are of opinion the complainants are entitled to the relief prayed, and therefore affirm the order of the Circuit Court granting the injunction.

Order affirmed.