Windsor v. City of Des Moines

81 N.W. 476, 110 Iowa 175

• Court: Supreme Court of Iowa
• Decided: January 16, 1900
• Status: Published

Opinion

Dbemeb, J.

Prior to the year A. D. 1897, there had been in operation in the eitv of Des Moines three private electric light plants. In the early part of that year the city authorities concluded, however, to construct a fourth one at. public expense. Pursuant to this purpose, the board of public works of the city published proposals for the construction of such works. In response to these proposals, the McCaskey & Holcomb Company submitted three separate bids or propositions for the erection of a plant. Shortly after the submission of these bids, the mayor of the city issued a proclamation for a special election, and fixed the seventeenth day of May, 1897, as the time, for holding it. The following is a copy of the form of ballot used at that election:

“Shall the following proposition be adopted: First.. Shall ^he city council of the city of Hes Moines, Iowa,, authorize the McCaskey & Holcomb Company to construct an electric light plant, and erect the necessary wire and apparatus to furnish light to the city and its streets ?

I I For electric light plant.

| Against electric light plant.

“Shall the following proposition be adapted: Second.. Shall an electric light -plant, with necessary wires and apparatus, be established by the city of Des Moines.

| For electric light plant.

| Against electric light plant.”

At the election, 3,756 votes were cast in favor of the-electric light plant*on both propositions, and 1,300 were registered in the negative. Only 31 votes were cast for the first proposition alone, and none for the second. The trial court held in favor of the plaintiff’s contention that these propositions were inconsistent and contradictory, and that, if this be not true, the city council was authorized to do either the one or the other of the two things authorized; thus leaving it to that body to do as it pleased, and grant a franchise or not, as it saw fit. The trial court also held, in effect, that the bids made by. the McCaskey Company did not correspond with the published proposals. Dor these reasons it entered a decree for plaintiff, adjudging the election, and the contracts entered into pursuant thereto, void, and annulled the tax ordered for the purpose of meeting the obligations created by the contracts. After the decree had been entered, the legislature passed a curative act, which will be hereinafter more particularly referred to. After that act was passed, defendants asked for a vacation and modification of the decree. This request was denied, but defendants were given leave to file a petition to set aside and modify the decree, if they were so advised. Defendants now rely on this curative act as a defense to plaintiff’s claims that the proposal for bids and the bids of the McCaskey Company, and the proposition submitted to the electors at the special election, did not conform with law; while plaintiff contends that the curative act cannot be considered on this appeal, that, if considered, it did not cover all the defects in the proceedings leading up to the contracts sought to be annulled, and that, in any event, the invalidity of the contract for the purchase of land and of the tax levied to pay for the operation of the plant was not affected.

1 The first question for solution relates to the validity and scope of the act, and its effect on pending litigation. “A curative act may cure or legalize any act which the general assembly could, as an original question, have author: ized.” Huff v. Cook, 44 Iowa, 641; City of Clinton v. Walliker, 98 Iowa, 655, and cases cited. And a large discretion is vested with the legislature in determining when such special laws should be passed. Chicago, R. I. & P. Ry. Co. v. Independent Dist. of Avoca, 99 Iowa, 556. It is no objection to such legislation that it was passed after action is commenced disputing the validity of the act. As a rule, every case must be determined on the law as it stands at the time judgment is pronounced. Of course, the legislature cannot impair the obligation of contracts, nor by subsequent legislation disturb vested rights. But the bringing of- suit vests no right in a particular decision. Huff v. Cook, 44 Iowa, 639. This is a suit in equity, and is triable de-novo in this court. Until final decree is passed, there is no< vested right to be disturbed, and the case must be determined on the law as it now stands. These are elementary propositions, supported by the following, among other, authorities. Land Co. v. Soper, 39 Iowa, 112; Huff v. Cook, supra; Association v. Heidt, 107 Iowa, 297 (43 L. R. A. 689); Same v. Curtis, 107 Iowa, 504.

3 But it is argued that the curative act does not cover all the defects in the proceedings, and that the contract should be annulled because of certain defects not mentioned, in the curative act. While the preamble refers to certain specified defects, yet the act itself says that the contract made with the McCasliey & Holcomb Company, for the construction of the electric light plant, and the operation and maintenance thereof, “is hereby legalized * * * as fully as though •■all the requirements of the law leading up to, and necessary thereto', had been followed in every respect and particular, ¡and on full compliance with the law.” See Acts Twenty-seventh General Assembly, chapter 184. While the preamble may be considered in arriving at the legislative intent, yet if, in reading the enacting part, there is no ambiguity or doubt as to its scope or meaning, there should be no recourse •either to the title or to the preamble in order to discover a different meaning. Sutherland Statutory Construction, section 212, and cases cited. As a general rule, the preamble may extend, but cannot restrain, the effect of the enacting •clause. Sutherland Statutory Construction, section 213. It is clear, we think, that all defects in the preliminary proceedings incident to the making of the contract were cured by the act hitherto quoted.

3 4 5 But it'does not follow that the contract is valid. Attack is made on it because it created a debt in. excess of the constitutional limitation. That limitation is in these -words “No' •county or other political or municipal corporation shall be? allowed to become indebted in any manner or for any purpose to an amount in ’the aggregate exceeding five per centrum on the value of the taxable property within such county or corporation to be ascertained by the last state and county tax lists previous to the incurring of such indebtedness.”’ Constitution, article 11, section 3. The assessed valuation of the taxable property within the corporate-limits of the city of Des Moines, as shown by the-state and county tax lists of the year 1896, was sixteen million four hundred and seventy-five thousand two hundred! and sixty dollars. The authorized debt was therefore eight, hundred and twenty-three thousand seven hundred and sixty-three dollars. Plaintiff contends that the indebtedness is-limited to 5 per centum of the property subject to taxation fo-r city purposes. We cannot agree with him in this contention. The state and county tax lists include -all property in the corporate limits, whether taxable for city purposes o-r not. Todd v. City of Laurens, 48 S. C. 395 (26 S. E. Rep. 682). ’ At the time the contract in question was entered into, the bonded debt of the city was seven hundred and sixty-nine thousand dollars. It was indebted on outstanding warrants in the sum of eighty-five thousand two hundred and seventy-three dollars and seven cents. It had in cash om hand, belonging to eight or ten different funds, sixty-eight thousand one hundred and twelve dollars and seventy cents.. Taking from this last amount special funds which could not be used for the payment of outstanding warrants, and we-find but forty-seven thousand seven hundred and twenty-nine-dollars and twenty-eight cents in available cash on hand. The-officers testify, however, that no warrants were drawn, unless . there was an appropriation to- meet them, and that as soon as the appropriation was exhausted no moi’e warrants were drawn. As this evidence is uncontradicted, -we must accept it as true, and, if true, it eliminates the outstanding warrants. The city had also entered into a contract to purchase a new cemetery, in which it had the right to acquire title to a tract of land for cemetery purposes on payment of the sum, of thirty-five thousand dollars, four thousand dollars of which amount was paid, and the city had the option to quit paying at any time, and to take title to such of the property as it had in fact paid for. Whether or not it should pay. anything further on this contract was entirely optional with the city, and we do not think it should be treated as creating a debt. Burnham v. City of Milwaukee, 98 Wis. 128 (73 N. W. Rep. 1018). But it also appears that there were judgments against the city which were unpaid on August 3, 1897, amounting to something over fourteen thousand six hundred and ninety-two dollars. In addition to this, the city had also entered into a bridge contract providing for the grading of approaches to what is known as the “Fifth Street Bridge” at an expense of nineteen thousand one hundred dollars, and had also entered into various grading contracts imposing liabilities on the city amounting to something over thirteen thousand dollars. .It is contended by appellants that these contract liabilities should not be considered, for the reason there is nothing to show that they were not to be paid from the current revenues of the city as the work progressed. We think it fairly appears that these contracts created debts on the part of the city, and there is no showing that the amounts earned thereunder could -be paid out of the current revenues. The burden is on the city to establish the claim made by it, and this it has failed to do. City of Council Bluffs v. Stewart, 51 Iowa, 385. Indeed, as we understand it, the evidence shows that current revenues were absorbed by the warrants theretofore issued and the current expenses of the city. The amount of indebtedness against the city at the time the contracts in question were entered into was about eight hundred and sixteen thousand dollars, and to this should be added about uiue thousand dollars in accrued interest on the bonded indebtedness, making a total of about eight hundred .and twenty-five thousand dollars. This is a fair and liberal estimate, and in arriving at it we have given the city the benefit of every doubt respecting the character of the indebtedness. There is no doubt in our minds that the city was indebted to the full constitutional limit at the time it made the contracts in question.

The remaining inquiry is, did those contracts create a debt such as is inhibited by the constitutional provision? This involves the consideration of a long and carefully worded instrument, drawn for the evident purpose of meeting the constitutional objection. By the terms of the contract with the McOaskey Company, that company agreed to furnish the materials for and to construct an electric light plant, according to certain plans and specifications, to be completed and ready for occupancy on or before January 1, 1898. The plant was then to be accepted and approved by the city, and a payment of sixty thousand dollars made on •account of the construction thereof. The contractor was to operate the plant for the first year, and furnish dertain lights to the city, and at the end of the yeax1, if the plant had been operated according to agreement, it was to x*eceive a further payment of twenty-five thousand dollars on account of the construction, and monthly during the year for lights furnished the sum of two thousand seven hundred and eight dollars and thirty-three cexxts. The contractor was also to ■operate the plant during the second yeax*, and to receive at the end of that year twenty-four thousand dollar's on account of construction, and the same monthly payments as during the first year. An option in the contract makes ’ provision by which it was possible for the contractor to operate the plant for thirteen additional years. The provision as to payment reads as follows: “The company is to receive in full payment for the construction of said plant as provided in the specifications, and for operating and keeping the same in repair for the period of two years hereinbefore provided, the following sums to be paid, however, only in the manner and from the funds hereinafter specified: Upon completion and acceptance of plant, sixty thousand dollars; one year after completion and acceptance of plant-, twenty-five thousand dollars; two years after completion and acceptance of plant, twenty-four thousand dollars, annually for each of two years the sum of thirty-two thousand five hundred dollars, payable in equal monthly installments.” It is immediately thereafter recited that “the payment of twenty-five thousand dollars shall not be .considered as earned, accrued, and payable unless and until the company also during said year shall .operate said plant, and keep the same in repair, as hereinbefore provided.” There is a similar provision respecting the payment of twenty-four thousand dollars to be made at the end of the second year. The city further agrees “that, at the proper time, it will duly levy, as a part of its authorized current revenues provided for by sections 675 and 676, McClain’s-Code, for the year 1898, a tax upon the assessable property in said city sufficient to produce the said sum of sixty thousand dollars, and that it will at the proper time duly appropriate from its said revenue the said sum of sixty thousand dollars, and cause the same to be paid as collected to the company, upon the completion and acceptance of the said plant, or, if the said sum has not been collected, to cause to be duly executed and delivered to the said company its warrants in proper form, drawn -on said fund so appropriated, for' the said sum of sixty thousand dollars, or any balance thereof not paid in, money; the object and-purpose thereof being to-levy, anticipate, pledge, and appropriate from the current-revenues of the city for the year in which said plant is completed the said sum of sixty thousand dollars as the first payment thereon.” In general terms, a similar provision is made for the two payments of twenty-five thousand dollars and twenty-four thousand dollars. Then follows an obligation on the part of the city to make the special assessment which it is claimed may be made for maintaining and operating an electric light plant, under sections 478, 474 and 475 of the Code as amended, to provide a fund for the-payment of two thousand seven hundred and eight dollars and thirl y-three cents per month to be paid for 'light, after which the city undertakes the following general obligation: “And the said city hereby agrees and obligates itself to do any and all things proper and necessary to the due levy of such contemplated taxes, and to duly appropriate from such general and special funds the said sums to be paid as herein stated, and to draw such warrants in anticipation of the-actual collection thereof as hereinbefore specified, and the city hereby agrees to make such levy and appropriation, set apart and pledge such specified revenues to said extent for said purposes, and to use all due effort to collect and pay the same to the company; but it is hereby agreed that no-general indebtedness for the payment of the specified sums is hereby created against the said city, b-uf only the obligation to levy, anticipate, and pledge its current revenues, general or special, as and for the purpose hereinbefore stated. It is hereby agreed, also, that the city may, at its election,, at any time, pay all or part of such deferred payments out of money on hand legally available for that purpose, and shall be entitled to receive upon such payments a discount of' six pe'r cent, from the time it is so made until the time when it becomes payable, as hereinbefore provided, and shall thereupon. he discharged pro tanto from the obligation to levy, assess, and collect said amount as an appropriation of its-current revenues as above specified.” Then follows this provision, pledging or mortgaging the property as security for the fulfillment of the promises made by the city: “And it is further agreed that, in so far as it has poiver so to do, the city does hereby pledge and mortgage to the company the entire plant to be constructed as described in the specifications hereto attached, with all appurtenances, and including also the tract of land whereon the power station of said plant is to be erected, to-wit, lots 1 to 8, inclusive, Sibley’s ; addition to tbe city of Des Moines, Iowa, to- secure tbe full performance by the city of its covenants in this contract; tbe object and purpose of tbis clause being to give tbe company, in so far as tbe city bas power to do so, a lien upon tbe said plant and premises to secure tbe said company tbe performance as aforesaid, on tbe part of tbe city, of tbe ■ convenants of tbis contract by it entered into. And tbe said-mortgage shall be foreclosable in the ordinary manner upon failure of the city to perform any of the covenants of tbe -contract upon its part, after sixty days’ notice in writing of the particular default bas been given to tbe city by tbe ■said company, unless such default be rendered within said sixty days.” This is followed by a stipulation as to operation and repairs, as follows: “Tbe company shall at once, upon the completion and acceptance of said plant in tbe ■manner provided in tbe specifications, be placed in possession of tbe entire plant, and shall during tbe said term of _ years, at its own expense, furnish and put in place on said plant all repairs necessary for its proper maintenance and ■ operation, except such as may be necessary by reason of unavoidable casualty, as hereinafter specified; * * * ■provided, however, that, in case of unavoidable casualty by ■cyclone, tornado, fire, etc., totally or partially disabling tbe said plant, tbe city shall, at its own expense, place tbe same "in its former condition at tbe earliest period at which the -same can be done, by tbe use of due diligence, and shall carry fire insurance upon the said plant to tbe extent of no less than twenty thousand dollars, and tornado insurance to •■an extent of not less than fifty thousand dollars.” Tbe last clause of tbe-contract reads as follows: “It is further agreed that, in case either party shall at any time be pre-vented or delayed by legal process from performing any of 'the covenants hereby undertaken on its part, and tbis contract is subsequently finally held valid, and such process ■vacated and dissolved, or suits assaulting its validity finally defeated or dismissed, such party shall at once thereupon proceed to perform all the conditions and covenants by it undertaken herein as nearly as possible as to time, in substantial conformance with, and in all other respects in full compliance with, this contract.” We have now set out all parts of the contract material to the determination of the questions before us, and proceed to a discussion of these questions.

6 7 In Mosher v. School Dist. 44 Iowa, 122, we said: “It vill be observed that article 11, section 8, of the constitu;ion provides that the corporation shall not become indebted in any manner or for any purpose to an amount in the aggregate exceeding 5 per centum of the value of its taxable prop'erty. This prohibits an indebtedness in the form of bond, note, or any other kind of obligation, whether it be in writing or by parol, express or implied.” As said by Justice Miller in City of Litchfield v. Ballou, 114 U. S. 192 (5 Sup. Ct. Rep. 821, 29 L. Ed. 133), construing the constitutional provision before quoted: “But there is no more reason for a recovery on the implied contract to repay the money than on the express contract found in the bonds.” The language of the constitution is that no city, etc., shall be allowed to become indebted in any manner or for any purpose to an amount, including existing indebtedness, in the aggregate exceeding ■five per centum on the value of its taxable property. It shall hot become indebted, — shall not incur any pecuniary liability. It shall not do this in any manner; neither by bonds, nor notes, nor by express or implied promises. Nor shall it be done for any -purpose, no matter how urgent, how useful, how unanimous the wish. There • stands the existing indebtedness to a given amount in relation to the sources of payment as an impassable obstacle to the creation of any further debt, in any manner or for any purpose whatever. If this prohibition is worth anything, it is as effectual against the implied as the express promise, and it is as binding in a court of chancery as a court of law. In McPherson v. Foster, 43 Iowa, 48, we find, this significant language: “The constitutional provision in question, it will be observed, prohibits the creation of indebtedness-beyond the prescribed limit. It is an inhibition upon such, indebtedness, however its creation may be attempted. It will cover the case of implied contract, as well as express-contract by bond or otherwise. It is aimed at the indebtedness,' not its form. It cannot be true, then, that a debt could bo created because a consideration is received.” That the contracts in question created obligations on the part-of the city there can be no doubt. It agreed to-issue warrants, to levy a tax for the payment of the same,. and also pledged its future revenues to the payment ' of these warrants. Had it issued the warrants, and failed to levy the tax, there is no doubt that the holder could have enforced them against the city. Clark v. City of Des Moines, 19 Iowa, 199. At the time the MeCaskey contract was entered into, there was no. statute authorizing a special levy for the purpose of constructing-electric light plants, and tiie warrants, when issued, could only be paid out of the general ‘funds.

But it is said that the .city may anticipate its revenues, and that in so doing it is not violating the constitutional provision, and reliance is placed on some language found in Dively v. City of Cedar Falls, 27 Iowa, 227, wherein it is said: “If A. should undertake to build a court house-within three years, doing so much, and to be paid accordingly, each year, the obligation of the contract would arise-when executed, but the indebtedness,- under the constitution (if there was none other), would be measured by that to be paid each year. If this is not so-, then it would be-impossible in a majority of instances to even contract for •the most necessary public building without a prior levy and deposit of the funds in the public treasury. This the constitution never intended.” What is there said is purely-dictum, as appears in numerous subsequent cases, to which, we will call attention. In Scott v. City of Davenport, 34 Iowa, 208, the Dively Case is referred to, and it is there said: “The case of Dively v. City of Cedar Falls, 27 Iowa, 227. referred to by counsel for: appellant, does not sustain their view. The court there decided that where a -municipal corporation issued warrants or orders for the -payment of money, directed to an 'officer of the same corporation. in an amount larger than 5 per cent, of the taxable property within the corporation, such issue of warrants was not a violation of the section of the constitution above set out, when the corporation had, at the same time, the means in its treasury to meet the warrants. In •.such case, the issue of the warrants amounted to no more -than a direction by the corporation to its .treasurer to pay •out the money then in the treasury upon the warrants. The warrants were not obligations to pay money that the •corporation expected to realize from property purchased. The cases are essentially different. In this case the issue •of the bonds would create am indebtedness which the' city •would be bound to pay.” We quote further from that case ^as follows: “It is only expected that at some future day the city will have the money to pay them (the bonds), derived from the revenues of the waterworks for which,it is proposed to create this additional indebtedness. However reasonable this expectation may be, and however much the erection of the works may conduce to the safety of property and to the convenience or health of the people within the city, the constitution, the language of which •.seems too plain, to be misunderstood, will not permit the creation of this additional debt for that or any other purpose.” In City of Council Bluffs v. Stewart, supra, the effect of the anticipation of current revenues was considered, and we there said, “If the bonds in question should be issued upon the faith of the uncollected taxes and the levy for the current! year, there is no power which- could prevent the city authorities from absorbing, the taxes as-collected in payment of ordinary current expenses. Indeed,., such a course might be absolutely necessary to maintain the city government. It is plain that, if bonds should be issued in anticipation of uncollected taxes, the constitutional limitation might, and probably would, be transcended.” To these rules there are some exceptions. For instance, it is generally’ held that future revenues may be anticipated to meet contracts for current expenses. Such-a rule, or rather exception, is absolutely necessary to the-life of the city, and,to the successful accomplishment of its purposes. In Grant v. City of Davenport, 36 Iowa, 396, this- exception was applied, and it is there said: “Any-appropriation of these revenues, therefore, whether by ordinance or by contract, to the payment of the ordinary expenses, would be, beyond question, as it seems to us,. both reasonable and proper. And, if the appropriation was made in advance of the receipt of the revenues, the-action would be just as legitimate, because that the revenues - will be received is a legal certainty. * * * If, therefore, the ordinance in question accomplishes this, and no»more, its validity is settled. But that a supply of pure-water to the inhabitants of a city for their health and domestic use, as well as for the purpose of extinguishing-fires, is the duty of a city, and that the cost thereof properly comes within the term 'ordinary expenses/ is not' questioned by appellant’s counsel; nor, indeed, could it be-by any one. The city of Davenport would surely become-indebted further by employing individuals or a corporation-to construct its waterworks for it, in consideration of a certain sum, to be paid in bonds or other evidences of indebtedness. Scott v. City of Davenport, 34 Iowa, 208. And, the necessity for the waterworks would constitute no justification or excuse for the violation of the constitution or of the statute. But if it can induce individuals or a corporation to construct and maintain such works for the use- and benefit of tbe municipality and its inhabitants, and can pay a just and fair rent, as agreed, out of its current revenues, and can also, out of such revenues, pay its other-ordinary expenses, we can seo no sufficient reason for holding that an agreement to pay such rent, either weekly, monthly, quarterly, or annually, creates an indebtedness-against the city. From these illustrations, as well as from the plain and practical meaning of the language of the-constitutional inhibition, -the true rule and just interpretation is evolved, to-wit, that where the contract made by the municipal corporation pertains to its ordinary expenses, and is, together with other like expenses, within the limit of its current revenues and such special taxes as it may legally and in good faith intend to levy therefor, such contract does not constitute the incurring 'of indebtedness, within the meaning of the constitutional provisions.” In Water Co. v. Woodward, 49 Iowa, 58, this language is. found relating to the subject now under consideration: “The tax required to be levied is clearly authorized by the-statute, and such tax, together with the income of the company derived from other sources, the ordinance expressly provides shall pay the' obligations assumed by the city. If' it does not, neither the bondholders nor the company have • any claim on the city for the deficiency. The obligation of the city is.to levy the tax, and see that the amount collected is applied to the specified purposes. If the special fund1 legally provided is not sufficient, then it may be well said the-deficiency is not payable by the city, and it is difficult to conceive that there can be such a thing as a debt which is.never to be paid. No burden is created therebw and there-cannot be such an indebtedness.- In any constitutional-sense, the prohibited indebtedness must be a burden, and-payable by the city from funds which could not constitutionally be appropriated to that purpose. Whether the fund legally provided will be sufficient for the designated' purpose we have no means of knowing. Nor is this regarded; as material, if no other charge is created on the city by the ordinance.” In that case the city was also given the ■option to purchase the works, and of that it is said: “Now, the ordinance expressly provides that the city may purchase the works as soon as its financial condition will permit. But this provision cannot have the effect to create a present or future indebtedness, and, without serious doubt, was agreed upon in view of the present financial condition ■of the city. If, at some time in the future, the city can, without a violation of the constitution, purchase the works, and chooses to do so, we are unable to see that such a ■state of facts creates a, present indebtedness, or that any obligation is now assumed by which a debt can be said to be created which is unconstitutional.”

8 We think there is a radical distinction between a contract to procure light for a. city and its inhabitants, and a •contract for the construction of an electric light plant for a city, and the necessity for the plant constitutes no excuse or justification for the violation of the constitution. This distinction is pointed out in the Grant Gase, supra, and is made plain in Spilman v. City of Parherslurg, 35 W. Va. 605 (14 S. E. Rep. 279). See, also, Earles v. Wells, 94 Wis. 285 (68 N. W. Rep. 964). Grant that the city had a right to levy a special assessmént for the purpose of maintaining’ and operating an electric light plant, as provided by section 2 of chapter 11 of the Acts of the Twenty-second General Assembly, yet it •does not follow that it could anticipate its future general revenues, for the purpose of erecting such a plant.

9 Again, it is argued that the contract does not create a debt, but merely a contractual obligation, which may •only become a debt as the light was furnished and the compensation earned. It seems to be conceded that, if the contract related to the ordinary expenses of the city, as the furnishing of light or water, or of fire protection, this argument would' be souud._ Indeed, it is expressly so held in many of the cases heretofore cited. But does this rule apply to a contract for the construction of a plant for the purpose? Expressions may be found in some of "the cases cited that give color to this argument (see Dively v. City of Cedar Falls, supra; Anderson v. Insurance Co. 88 Iowa, 579; Allen v. City of Davenport, 107 Iowa, 90; Water Co. v. Woodward, 49 Iowa, 58); and in some cases this is no •doubt the rule. See City of Fast St. Louis v. East St. Louis Gaslight & Coke Co. 98 Ill. 415; Crowder v. Town of Sullivan, 128 Ind. 486 (28 N. E. Rep. 94, 13 L. R. A. 647); Smith v. Dedham, 144 Mass. 177 (10 N. E. Rep. 782); Lighting Co. v. City of Merrill, 80 Wis. 358 (49 N. W. Rep. 965); City of Walla Walla v. Walla Walla Water Co. 172 U. S. 1 (19 Sup. Ct. Rep. 77, 43 L. Ed. 341). But where the contract is for the erection, of electric light plants, or for any other improvement, and the time of payment is postponed to a later date, and no special levy for the purpose of erecting such works is authorized, the rule seems to be well settled that the sums to become due in the future must all be taken into account in estimating the amount of the existing indebtedness of the municipality. Culbertson v. City of Fulton, 127 Ill. 30, (18 N. E Rep. 781); City of Council Bluffs v. Stewart, supra; French v. City of Burlington, 42 Iowa, 614.

This must be the true rule, for, if appellants’ contention be correct, the city might, by contracts such as the one in suit, absorb all the general revenues in advance, and leave nothing for the payment of current expenses. Suppose a city should anticipate all its general revenues, and thus leave nothing for the payment of current expenses, and suppose, further, that it should issue warrants for the payment of these expenses, which were not paid for want of funds; could not the holder of these warrants enforce them against the city, and if enforced, and the city is compelled to pay (as no doubt, it would be obliged to do) the amount thereof, in addition to the amounts previously appropriated for improvements, would not the very object of the-constitutional provision be thwarted, and a wise provision of our fundamental law rendered nugatory ? The answer to these propositions is so obvious that no amount of refinement can add anything’ to the conclusion. We are cited to no case that establishes a contrary doctrine. Language is no doubt used in some of them which is broad enough to sustain appellants’ contention, but that language must be interpreted in the light of the facts disclosed in the opinions. So interpreted, there is no real conflict in the-cases on this proposition. As a general rule, a city may not anticipate its general revenues to be created by a scheme-of general -taxation. Special taxes and assessments may, however, be anticipated in a proper case. Davis v. City of Des Moines, 71 Iowa, 500; City of Clinton v. Walliker, 98 Iowa, 655; Anderson v. Insurance Co., supra; Tuttle v. Polk, 92 Iowa, 433; Allen v. City of Davenport, supra. As supporting the general rule announced, see, also Read v. Atlantic City, 49 N. J. Law, 558 (9 Atl. Rep. 759); Beard v. City of Hopkinsville, 95 Ky. 239 (24 S. W. Rep. 872, 44 Am. St. Rep. 222, 23 L. R. A. 402); Spilman v. City of Parkersburg, supra; Prince v. City of Quincy, 128 Ill. 443 (21 N. E. Rep. 768); State v. Commissioners, 37 Ohio St. 526. That such is the legislative intent is clearly indicated by section 1 of chapter 4 of the Acts of the Twenty-second General Assembly, which reads as follows: “All cities of the first class shall make their appropriation for all the different expenditures of the city government for each fiscal year at or before the beginning thereof, and it shall be unlawful for the city council or any officer, agent or employe óf the city, to issue any warrant, enter into any contract, or app-ropriate any money in excess of the amounts thus appropriated, for the different expenses of the city, during the year for which said appropriation shall be made, and any such city shall not appropriate in the aggregate, an .amount in excess of its annual legally authorized revenue, but nothing herein shall prevent such cities from anticipating- their revenues for the year for which such appropriation was made, or from bonding or refunding their outstanding indebtedness, provided, that this section shall not apply to -cities of the first class organized since 1881.” In construing this section, we said, in Phillips v. Reed, 107 Iowa, 331, that the object of the law was to place municipal corporations on a cash basis, and prevent the accumulation of such.a floating indebtedness as appears in. that case.

We do not overlook the fact that the city has the right to establish electric light plants, and to acquire a site therefor, and to pay for the same out of the general revenues. That fact is not regarded as controlling, however, for there-is no authority to levy a- special tax for either «purpose. -

10 Further, it is said on behalf of the city that it did not obligate itself to pay more under the contract for the plant and the expense of operating'the samp than, it had theretofore been paying for lighting alone. We do not think this fact, even if true (and we doubt if it be established), is of controlling importance. It may have-paid more for lighting than it should. - But, however this may be, such situation does not authorize it to enter into a contract for the construction of a plant in violation of the constitutional inhibition.

We need not.consider the obligation of the city to rebuild the plant in ease of' destruction by fire or otherwise. That such provision could not be enforced if, when time for performance arrived, the city was indebted to the constitutional limit, is too- clear for argument.

As the contract for the purchase of the site is conditional on the main contract being held valid, there is no necessity for considering the legality of the contract made with the trustees of the Sibley estate.

Careful consideration of the authorities cited, aided by patient independent examination of the questions-involved, leads to the .conclusion that the .contracts in suit, as well as the tax levied pursuant thereto', are invalid, arul that the decree of the district court is right. — Aeeirmed.

Granger, C. J., not sitting.