Soukup v. Sell

104 S.W.2d 830, 171 Tenn. 437, 7 Beeler 437, 1937 Tenn. LEXIS 123
CourtTennessee Supreme Court
DecidedMay 5, 1937
StatusPublished
Cited by18 cases

This text of 104 S.W.2d 830 (Soukup v. Sell) is published on Counsel Stack Legal Research, covering Tennessee Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Soukup v. Sell, 104 S.W.2d 830, 171 Tenn. 437, 7 Beeler 437, 1937 Tenn. LEXIS 123 (Tenn. 1937).

Opinion

*440 Me. Justice Cook

delivered tlae opinion of tlie Court.

The complainant, a citizen and taxpayer of Johnson City, sued the mayor and hoard of commissioners of the city and W. N. Estes & Co. and Clark & Co., Inc., to enjoin the sale and delivery of refunding* notes and bonds hereafter mentioned.

It was charged in the bill, as amended, (1) that the ordinance authorizing the issuance of the bonds was passed on a single reading, in a private room at the John Sevier Hotel, and the contract for the sale of the bonds was privately and secretly made without compliance with the general law, Code section 3707; and that in this the city commissioners abused their trust; (2) that the ordinance of January 4, 1937, providing for the issuance and sale of the bonds is void because passed by a single reading contrary to the charter; (3) that the enabling act passed by the General Assembly January 25, 1937, is void because inconsistent with the general law and because the caption of the act is deceptive and the. body of the act broader than the caption.

The chancellor was of the opinion that the defendants should answer the bill and overruled the demurrers and motions to dismiss. The defendants elected to stand upon their motions and demurrers and a final decree was entered as upon pro confesso. Appeal was prayed and granted and errors have been assigned upon which it is insisted that the decree of the chancellor should be reversed.

The questions raised by the assignments will be disposed of without specific reference to particular assignments, there being* eighteen in number.

*441 Statements of the hill disclose that complainant is a citizen and taxpayer of the municipality and would he burdened with an increase of taxation resulting from an illegal and improvident refinancing scheme set up for the city. In such situation, a citizen may maintain a taxpayer’s suit to avoid illegally imposed burdens.

But relief of taxpayers, unreasonably burdened by taxation under cover of valid laws and ordinances, is beyond the power of the courts. It is a • legislative power intrusted to representatives selected by the people. And so the wisdom, policy, injurious tendency, or mischievous consequences of a statute or an ordinance are not open to inquiry on behalf of a burdened taxpayer through judicial proceedings. Moreover, the courts cannot consider alleged improper motives or even fraud as the inducing cause to legislative action, either state or municipal. That is so because the courts cannot invade the legislative department to inquire about motives, but must consider legislative acts, whether by assembly or by municipal board, as fair expressions of the public will.

But the courts may construe statutes. They may, now, consider whether a legislative act or a municipal ordinance violates the fundamental law and upon finding that it does, may declare the fundamental' law superior to a temporary or a transient legislative movement or act. This inquiry is approached with the presumption that legislation is valid. The courts refuse to seek out constitutional defects or to hear complaints from those whose rights are not affected. They sustain legislation however ill-considered, inartificially drawn, or even oppressive, that does not violate constitutional rights. In this connection, wherever an act is suscepti *442 ble of two constructions, one of which may render the act valid and the other invalid, the courts adopt the construction that will render the act valid.

Much is said in the briefs of counsel about the invalidity of the proceedings by the mayor' and city commission. The validating act itself presumes that those proceedings were irregular. There would have been no good reason for the legislative enabling or validating-act if the mayor and commission had observed provisions of the charter and of general laws regulating the issuance and sale of municipal bonds. Presumably for that reason the enabling act was sought. It is common knowldge that all such special acts, local in character, are controlled by the will of local representatives. That is a legislative courtesy and under it no outsider can interfere except possibly where controlling political considerations may permit.

Matters relating to municipalities in their governmental capacity do not fall within any forbidding provision of article 11, sec. 8 of the Constitution. The Legislature could have empowered Johnson City to issue refunding bonds by a special act without reference to any preceding action by the local authorities. Such acts applicable to towns, counties, and local governmental units are frequently passed and have often been recognized as valid enactments regulatory of local governments. Ballentine v. Pulaski, 15 Lea (83 Tenn.), 633; Kee v. Parks, 153 Tenn., 306, 283 S. W., 751; McCord v. Marshall County, 152 Tenn., 675, 280 S. W., 692.

What could be done by initial legislation may be validated by an act or acts approving irregular municipal action or procedure. Muse v. Lexington, 110 Tenn., *443 655, 665, 76 S. W., 481; Dillon on Municipal Corporations, section 129; 19 R. C. L., p. 1026.

The ordinance involved followed negotiations with. W. N. Estes & Co. and Clark & Co., Inc. On December 28, 1936, Clark & Co., Inc., and “W. N. Estes & Co. submitted a proposal to the mayor and commissioners of Johnson City to refinance $200,000' of floating indebtedness and certain bonded indebtedness through the issuance of $1,250,000 of refunding bonds, to be made a first charge upon the net proceeds of the waterworks department as well as a charge upon the general fund. The $200,000 floating debt was to be taken up by issuance of like amount of temporary funding notes, which were to be taken by Clark & Co. and Estes & Co. at par subject to a commission of $12.50 a thousand.

The proposition was accepted by the mayor and the commissioners, or at least a majority of them, on December 28, the same day it was submitted. The refinancing ag'reement involving the bonds was approved by the mayor and commissioners, or a majority of them, on January 4, 1937. On the same date the ordinance involved was passed by a majority of the commission.

The caption of the ordinance expressed a purpose to authorize the issuance of $200,000' of funding notes and $1,250,000 of funding bonds. Recitals in the ordinance refer to the $200,0001 as a floating debt and also refer to such additional floating debt as will increase the floating debt to $326,000'.

The ordinance also lists and identifies bonds to be refunded and fixes the amount of such bonds at $924,-040.15. It is stated, in the ordinance that the city had heretofore made an agreement with Clark & Co. and Estes & Co., pursuant to which the above floating indebt *444 edness of $200,000 is to be funded in notes and pursuant to which the city is to authorize issuance of its refunding bonds in the principal amount of $1,250,000.

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Bluebook (online)
104 S.W.2d 830, 171 Tenn. 437, 7 Beeler 437, 1937 Tenn. LEXIS 123, Counsel Stack Legal Research, https://law.counselstack.com/opinion/soukup-v-sell-tenn-1937.