property for these purposes, the additional indebtedness so authorized is regarded as indebtedness over and above any existing indebtedness for other purposes, and the municipality may contract indebtedness for water and the other specified purposes to the full extent of the prescribed percentage of the assessed valuation of taxable property, although the existing indebtedness for general purposes, in one form or another, and by reason of the various exceptions and qualifications necessarily placed upon the operation of the constitutional limitation, largely exceeds the limit prescribed therefor.' It has also

for so long as such undertaking fails to 1 Sioux Falls v. Farmers' Loan & Tr. produce sufficient revenue to pay for Co., 136 Fed. Rep. 721, rev'g 131 Fed. cost of operation and administration Rep. 890; Wells v. Sioux Falls, 16 (including interest on bonds issued S. Dak. 547; State v. City Council, therefor, and the cost of insurance 23 Utah, 13; State v. Quayle, 26 Utah, against loss by injury to persons or property), and an annual amount to be covered into a sinking fund sufficient to pay, at or before maturity, all bonds issued on account of said undertaking, all such bonds outstanding shall be included in determining the limitation of the power to incur indebtedness, unless the principal and interest thereof be made payable exclusively from the receipts of the undertaking" (Const., 1902, § 127).

Washington. Cities and towns shall not incur a debt exceeding one and onehalf per centum of the taxable property, nor in cases requiring the assent of a vote shall the total indebtedness at any time exceed five per centum on the value of the taxable property therein, "provided, further, that any city or town with such assent [of the voters] may become indebted to a larger amount, but not exceeding five per centum additional, for supplying such city or town with water, artificial light, and sewers, when the works for supplying such water, light, and sewers shall be owned and controlled by the municipality" (Const., 1889, art. viii. § 6).

Wyoming. No city, town, or village shall create any indebtedness exceeding two per centum on the assessed valuation, but "may be authorized to create an additional indebtedness, not exceeding four per centum on the assessed value of taxable property therein, as shown by the last preceding general assessment, for the purpose of building sewerage therein. Debts contracted for supplying water to such city or town are excepted from the operation of this section" (Const., 1889, art. xvi. § 5).

26; State v. Allen, 183 Mo. 283; Austin
v. Seattle, 2 Wash. 667; Seymour v.
Tacoma, 6 Wash. 427; Petros v. Van-
couver, 13 Wash. 423; State v. Hop-
kins, 14 Wash. 59; Graham v. Spokane,
19 Wash. 447; Hazeltine v. Blake, 26
Wash. 231. See also Weldin v. Wil-
mington, 3 Del. 472; Menominee Water
Co. v. Menominee, 124 Mich. 386. The
cases which declare this rule were criti-
cised and dissented from in Farmers'
Loan & Tr. Co. v. Sioux Falls, 131 Fed.
Rep. 890, where it was held that the
additional indebtedness not exceeding
ten per cent which may be incurred for
water and other purposes, under the
Constitution of South Dakota, means
that additional indebtedness within a
gross aggregate of a fifteen per cent of
the value of taxable property may
be incurred, and that a city which is
already indebted for general purposes
to an amount nearly equal thereto has
no power to construct water works
by an issue of bonds which will in-
crease its indebtedness to twenty-three
per cent of its assessed valuation.
The court was of the opinion that all
the indebtedness incurred for every
purpose, must be taken into considera-
tion in arriving at the power of the
municipality to incur debt for water
purposes, and that to the extent that
such general indebtedness exceeds the
general limitation of indebtedness it
must be deducted from the additional
ten per cent of indebtedness which the
municipality may incur for water pur-
poses. On appeal, the Circuit Court
of Appeals reversed this ruling.
Fed. Rep. 721. Water for the pur-
poses specified in the Constitution is
of such prime necessity as to have led
to the special provision in the Constitu-

136

been held that indebtedness for water works should not be included as a part of the general indebtedness in ascertaining the power of the city to incur debt under the general constitutional limitation.1

tion for procuring it, and this purpose and the language concur, as it seems to the author, in supporting the construction of the Constitution stated in the

text.

contract

addition to obligations issued to provide for the supply of water exceed ten per cent of the assessed valuation of real property, indebtedness incurred Under the Constitution of Washing- for water supply is to be excluded in ton it has been held that where a determining whether the debt of the municipal corporation is authorized to village has reached the statutory become indebted for water works, limitation. Lines v. Otego, 91 N. Y. sewer, and artificial light works in an Supp. 785. additional five per cent of the taxable property, its authority to become indebted forsuch purposes is not restricted to five per cent of the indebtedness, but it may become indebted for such purposes in any sum provided the total municipal indebtedness does not exceed ten per cent of its last assessment roll. Metcalfe v. Seattle, 1 Wash. 297. As to the operation and effect of the amendment to the Constitution of South Carolina, with reference to water works, &c., see Seegers v. Gibbes, 72 S. Car. 532; Bray v. Florence, 62 S. Car. 57.

Austin v. Seattle, 2 Wash. 667; Petros v. Vancouver, 13 Wash. 423. See also Los Angeles v. Hance, 137 Cal. 490. The provision of the New York Constitution quoted supra, that the limitation therein contained shall not prevent the issue of bonds to provide for the supply of water, but the term thereof shall not exceed twenty years, and a sinking fund shall be created on the issue of the bonds for their redemption, only applies to cities whose constitutional indebtedness already exceeds the general limitation of ten per cent of the value. If the indebtedness of the city, together with the proposed issue to provide for the supply of water, does not exceed that limit, the provision restricting the term of the bonds and requiring a sinking fund does not apply. Rochester v. Quintard, 136 N. Y. 221; Rome v. Whitestown Water Works Co., 113 N. Y. App. Div. 547, aff'd 187 N. Y. 542. If the amount of indebtedness proposed to be incurred exceeds the ten per cent limit provided by the Constitution, an issue of bonds for water purposes is invalid and unlawful if provision be not made for a sinking fund. Cahill v. Hogan, 44 N. Y. Misc. 360, aff'd 99 N. Y. App. Div. 620. Under the provision of the New York Village Law that "a village shall not incur indebtedness if thereby its total

In Missouri, under constitutional provisions, quoted supra, that no city shall incur indebtedness to an amount exceeding five per cent of the value of taxable property, and that any city of a specified population may, with the assent of the voters, be allowed to become indebted to an amount not exceeding an additional five per cent on the value of the taxable property for the purposes of purchasing or constructing water works and light plants to be owned by the municipality, debt already incurred by the city for the purpose of constructing water works must be taken into consideration in determining the question of the power of the city to incur further debt for purposes coming within the general limitation, e. g., sewers. In other words, in applying the general limitation upon indebtedness, debt incurred for all purposes, including the construction or purchase of water works, must be included in the computation. State v. Wilder, 197 Mo. 1. Under this provision, while bonds exceeding the original five per cent limitation may be issued "to purchase or construct" a combined water and light plant, they cannot be issued to maintain and operate it. State v. Wilder, 200 Mo. 97.

Under the Constitution of Washington, quoted supra, the fact that a city may become indebted to an additional five per cent of the assessed valuation for water, &c., does not prevent such city from creating, pursuant to statutory authority, a local assessment district for laying water mains and contracting debt on behalf of such local assessment district. The debt of such local assessment district is not to be considered as having any bearing on the limitation of indebtedness of cities for water, artificial light, &c. Smith v. Seattle, 25 Wash. 300. Montana. Under the provisions of

§ 215. Remedies of Taxpayers-Evidence. The incurring of debt in excess, or in violation, of the constitutional restrictions is within those general principles which confer upon the taxpayer the right to invoke the aid of a court of equity to restrain the illegal acts of the municipality or its officers. And upon similar principles a taxpayer may maintain a suit making proper and necessary parties to enjoin the levy and collection of taxes for the purpose of paying or satisfying such illegal indebtedness. But while the officers of a municipal corporation may be enjoined from contracting an indebtedness in excess of the constitutional limit, it has been held that the city officials who by their official acts have negligently or knowingly and wrongfully created debt exceeding the constitutional limit, cannot be held personally liable for the amount of such debt.3 Bonds and the Constitution, referred to above, only be raised when it seeks to incur prohibiting indebtedness exceeding debt. It cannot be raised to defeat a three per cent of the assessed valuation, but permitting the legislative assembly to extend this limit by authorizing municipal corporations to submit the question to a vote "when such increase is necessary" to construct sewers or procure a water supply, and the statute permitting debt for these purposes to the amount of an additional ten per cent, the limit can only be increased in case of necessity. If the municipality is not indebted in any amount at all, or if it has the necessary funds in its treasury, no indebtedness chargeable against the excess can be incurred. Hence a city which is indebted to the three per cent limit cannot refund its outstanding bonds issued for sewerage purposes, and declare them to represent indebtedness contracted outside of the three per cent limit, thus leaving a margin within that limit for other purposes. Palmer v. Helena, 19 Mont. 61. Nor can it arbitrarily declare a new debt to be contracted for water to be chargeable against the extended limit, when it is not indebted to the three per cent limit. Butler v. Andrus, 35 Mont. 575; 90 Pac. Rep. 785.

Bradford v. San Francisco, 112 Cal. 537; Hudson v. Marietta, 64 Ga. 286; Springfield v. Edwards, 84 Ill. 626; Culbertson v. Fulton, 127 Ill. 30; Grayville v. Gray, 19 Ill. App. 120; McPherson v. Foster, 43 Iowa, 48; O'Malley v. Olyphant, 198 Pa. 525; Spilman v. Parkersburg, 35 W. Va. 605; Fowler v. Superior, 85 Wis. 411. See post, chapter on Actions and Liabilities; Index, Remedy. The question of the power of a city to incur debt can

proposed street improvement which is sought to be effected by a special assessment and by general taxation in advance of action showing that the city intends to incur debt in connection therewith. Jacksonville R. Co. v. Jacksonville, 114 Ill. 562; post, § 294.

2 Smith v. Broderick, 107 Cal. 644; Bradford v. San Francisco, 112 Cal. 537; Howell v. Peoria, 90 Ill. 104. More fully as to taxpayers' suits, see chapter on Actions and Liabilities; Index, Equity. But it must appear that the tax is levied for the purpose of paying an unconstitutional debt. If the tax is within the authority of the municipality, it cannot be enjoined on the ground that when collected it may be applied to such indebtedness. Strohm v. Iowa City, 47 Iowa, 42. The court upon which equity jurisdiction is conferred by statute to restrain a violation of the fundamental law has ample jurisdiction to prevent it whether the debt or liability which is claimed to violate the constitutional prohibition is created for a legal or an illegal purpose. Blood v. Beal, 100 Me. 30.

Lough v. Estherville, 122 Iowa, 479. The court, Bishop, J., said: "Counsel for appellant does not cite any case holding that the mayor and respective members of the council of a city may be held personally liable in damages. because municipal indebtedness in excess of the constitutional limit has been contracted or permitted. We know of no such case, and we cannot say there is anything in reason or the spirit of our system of government that dictates the promulgation of any such

coupons of a municipality are presumed to be valid, and the burden is on the municipality to show that the indebtedness evidenced thereby is invalid under the constitutional limitations. But when it appears that the limit of the municipal indebtedness has been reached, the burden of sustaining the validity of the evidence of indebtedness sued on is on the person claiming thereunder.2

rule at our hand. While a violation also Anderson v. Orient Fire Ins. Co.. of the Constitution in the respect in 88 Iowa, 579; Holliday v. Hildebrandt, question is to be condemned, and the 97 Iowa, 177; Independence Dist. 1. courts should interfere to prevent such Society for Savings, 98 Iowa, 581; 67 violation whenever called upon so to N. W. Rep. 370. The assessed value of do, yet we are not prepared to adopt taxable property may be proved by the the suggestion that an action for certificate of the county clerk to the damages may be resorted to as afford- value thereof, as shown by the records ing a proper means of redress where in his office. East St. Louis G. L. & C. violation has been accomplished." Co. v. East St. Louis, 45 Ill. App. 591. 1 Lake County v. Standley, 24 Colo. The existing indebtedness may be es1; Lake County v. Linn, 29 Colo. 446. tablished by an authorized official pubSee chapter on Municipal Bonds, post. lication showing the amount thereof. It will be presumed in support of the Ib. The books of the secretary of the validity of bonds that they have not municipality or other officer showing been issued in excess of the limitation, the amount of indebtedness are adin the absence of evidence of the missible for the purpose of proving assessed value of the property. Glad- the amount of the debt. Wormley stone v. Throop, 71 Fed. Rep. 341. v. Carroll Dist. Township, 45 Iowa, 2 Law v. People, 87 Ill. 385. See 666.

§ 230 (82). Charters defined. We have before seen that in this country municipal corporations are created by legislative act, either in the form of a special legislative charter or under general incorporating statutes.1 A MUNICIPAL CHARTER granted by the crown in England is a written instrument in the form of letters-patent, with the Great Seal appended to it, addressed to all the subjects, and constituting the persons therein named and their successors a body corporate for or within the place therein specified, and prescribing the powers and duties of the corporation thereby created. But such charters are inoperative until accepted. But in this country, as we have elsewhere shown, the legislature creates, alters, and, in the absence of constitutional restriction, can repeal charters and incorporating statutes and abolish municipal and public corporations at its will, and it invests them with such powers, mandatory and discretionary, and requires of them such duties, as it deems most expedient for the general good, and for the benefit of the particular locality. No precise form of words is necessary to create a corporation, and a corporation may be created by implication.*

1 Ante, §§ 59, 61.

Weeks v. Gilmanton, 60 N. H. 500;

2 Ante, §§ 50, 69. Outline of charter ante, §§ 10, 15, 34. of the Middle Ages, ante, § 7.

Ante, §§ 3, 64, 65.