Bond v. Mayor of Baltimore

Pattison, J., delivered the opinion of the Court. This is an appeal from an order of Circuit Court IsTo. 2 of Baltimore City sustaining the demurrer of the appellees, the Mayor and City Council of Baltimore and the Board of Commissioners of Pinance of the City of Baltimore, and dismissing the appellant’s hill of complaint. The facts as alleged in the hill are substantially as follows: By Chapter 401 of the Acts of 1906, as amended by Chapter 202 of the Acts of 1908, a Paving Commission for the City of Baltimore was created, and provision was therein made for the issuance of city stock to an amount not exceeding five millions of dollars ($5,000,000) for the purpose of defraying the cost of the work of snch commission. The sixth section of the original Act, as amended by the Act of 1908, contains the following provisions: “That in order to provide money for the work to be done by said Commission under tbis Act as and when portions of such work are from time to time being done, the Mayor and City Council of Baltimore is hereby authorized to issue the stock of said corporation to an amount not exceeding $5,000,000, said stock to be issued from time to time and in such amounts as the Mayor and City Council of Baltimore shall by ordinance prescribe; provided, however, not more than one million of dollars ($1,000,000) of said stock shall be issued in any one year, and to be payable at such times and to bear such rate or rates of interest as the Mayor and City Council of Baltimore shall by ordinance provide; said amounts of stock shall he sold and issued by the Commissioners of Pinance of the city ¹⁶² of Baltimore, at the best prices obtainable in their judgment therefor. * * * Appropriations for the cost of said work based upon the estimates of said Commission, shall be annually included by the Board of Estimates, in the usual way, in the ordinance of estimates; * * * but no part of said stock shall be issued, nor any member of said commission appointed until the ordinance of the Mayor and City Council of Baltimore providing for the issuance thereof shall be submitted to the legal voters of the city of Baltimore at such time and place as may be fixed by said ordinance, and be approved by a majority of the votes cast at such time and place as required by section 7 of Art. 11 of the Constitution of Maryland; if issued pursuant to such approval, the Mayor and City Council of Baltimore shall levy in each and every year upon all property liable to taxation in the City of Baltimore a sum sufficient to pay the interest accruing on said amount of stock and to create a sinking fund sufficient, with the aid of any premiums on the sale thereof, to redeem said amounts of stock at their respective dates of maturity.” In the ordinance of estimates made for the year 1911 (approved December 2nd, 1910) under the heading of Estimates for Few Improvements, was an appropriation of $500,000 appearing’ therein as follows: “Paving Commission.

To be taken from the Five Million Dollars Paving Loan contingent upon the passage of an ordinance of the Mayor and City Council of Baltimore and its approval by the legal voters of Baltimore City, providing for the issuance of said loan as authorized by Chapter 202 of the Acts of 1908. For the' cost and expense in connection with the grading, paving and curbing and regrading, repaving and recurbing public streets, avenues, alleys and highways in the City of Baltimore, including construction work, salaries and other expenditures, Five Hundred Thousand ($500,000) Dollars.” The Mayor and City Council acting under the authority conferred upon them by the Act of 1906, as aimended by the Act of 1908, passed an ordinance known as Ordinance Fo. ¹⁶³ 661 which was on the 13th day of April, 1911, approved by the Mayor. The ordinance is as follows: “See. 1st. Be it Ordained by the Mayor and City Council of Baltimore, That the Commissioners of Finance be, and they are hereby authorized and directed to issue the registered stock of the city to the amount of five millions of dollars, from time to time as the same may be required for the purposes herein-before named, and that said stock shall be sold by the Commissioners of Finance, from time to time and at such times as shall be requisite, and the proceeds of the sale of said stock shall be used for the purposes hereinbefore named and for no other purposes whatever; provided that this ordinance shall not go into effect until it shall be approved by a majority of the votes of the legal voters of the city of Baltimore cast at the time and place hereinafter designated. “Sec. 2.

And Be it Further Ordained, That said stock shall be issued in sums of not less than one hundred dollars ($100) each, redeemable on the first day of August in the year 1951, and bearing interest at the rate of not more than four per centum per annum, as may be determined by the Commissioners of Finance of Baltimore City, said interest to be payable semiannually on the first day of February and August in each and every year.” The third section provides for the payment of interest upon said stock and for the redemption of the stock at maturity. The fourth section provides for the submission of the ordinance to the voters of the city for ratification by them, and names the day upon which the election shall be held. The fifth section provides for notice and publication of notice of the election. The ordinance when submitted to the voters of the city for ratification at the election held May 2nd, 1911, was approved by a majority of the votes cast at such election, and thereafter the Mayor nominated the five members, who together with himself were to constitute the Paving Commission.

The nominations so made by the Mayor were confirmed by the Second Branch of the City Council on the ¹⁶⁴ 29 th of May, 1911, and thereafter on the 31st day of May, 1911, an organization of the Commission was effected. In the ordinance of estimates for the year 1912 an appropriation of $1,000,000 was made for the purposes above set forth. The Commission, after its organization, met from time to time and at its meeting of December 28th, 1911, passed a resolution in which, after setting out the appropriation of $500,000 as contained in the ordinance of estimates, and after alleging the passage of Ordinance No. 661, its approval by the Mayor and its ratification by the people at the election of May 2nd, 1911, and the appointment of the members of the board and its organization, it alleges that the Commission “proceeded to act upon and incur expenses of various kinds to be paid out of the appropriation by the Board of Estimates, but said Paving Commission. had not heretofore formally ratified said appropriation, although it has repeatedly acted upon it.” “Therefore, Be Is Resolved, by the Paving Commission of Baltimore City, appointed in pursuance of the Act of 1906, Chapter 401, and the Act of 1908, Chapter 202, and the ordinance of the Mayor and City Council of Baltimore, passed and approved April 13, 1911, and its ratification thereof at the May' election, 1911, That the appropriation of Rive Hundred Thousand Dollars ($500,000) to be taken out of the Five Million Dollars ($5,000,000) Paving Loan provided in the ordinance of estimates for the year 1911, be, and it is hereby ratified and approved by this Commission.” At a meeting of the Board of Finance, November 14th, 1911, it was decided to offer for sale by sealed bids on Monday, December 4th, 1911, $500,000 of this stock of the city (the amount appropriated in 1910 for the year 1911) to be issued under the Acts of the General Assembly above mentioned, thus after advertising the stock for sale as determined upon by them at their meeting of November 14th, 1911, the Commissioners of Finance agreed to sell' unto the Mercantile Trust and Deposit Company, one of the defendants to these ¹⁶⁵ proceedings, the highest bidder therefor, stock to the amount of $394,200, the same to be delivered to them upon the payment of the purchase price therefor. It was at this point of the negotiations for the sale of said stock to the Mercantile Trust and Deposit Company that the plaintiff, on December 28th, 1911, filed his bill asking that the defendants and each of them be restrained and enjoined from consummating the sale of said stock and from applying the proceeds thereof to the payment of said “excessive and unauthorized proposed expenditure during the ensuing year.” The plaintiff in his bill charges that the appropriation of $500,000 appearing in the ordinance of estimate for the year 1911, is void, because, as he alleges, at the time of the passage of such ordinance, the ordinance (Ho. 661) providing for the appointment of the Paving Commission had not been passed, and consequently said commissioners had not been appointed, and therefore the estimate was not made or based upon the estimates of such Commission; and he further-charges that the subsequent ratification and adoption of such appropriation could not give validity to it.

In this connection, however, ho concedes the validity of the million dollar appropriation, for he alleges that it “'is the only valid appropriation of any part of the proceeds of such stock which has been made, or which can be made until such appropriation has been made by the ordinance of estimates for the year 1913, when introduced and passed. The plaintiff also charges that the issue of said stock is illegal and unauthorized for the following reasons: First, because by Ordinance Ho. 661 the defendants, the Mayor and City- Council, did not prescribe the times when and the amount in which the stock was to be issued, and did not fix and establish therein the rate of interest to be paid on such stock otherwise than by providing- that such should not exceed four per cent., but delegated the determination of such matters to the Commissioners of Finance, which, as he charges the defendant had no authority to do, but were required to fix and determine the same by ordinance. Second, ¹⁶⁶ because the purpose for which said stock is to be issued is to enable the expenditure of $1,500,000 on the work of the Paving Commission during the year 1912, which amount as he charges, is in excess of the amount that has been validly appropriated for such purposes in the ordinance of estimates for the year 1912, and that the sale of stock to the amount of $1,500,000 “for the purpose of providing such excessive and unauthorized fund for the work of 1912 is illegal and void and contrary to section 6 of the Act, which requires that such stock should be issued as and when the work of said Commission is from time to time being done, and limits the amount to be