Douty v. Mayor of Baltimore

¹²⁷ Sloaüv, L, delivered the opinion of the Court. This is an appeal from a decree of the Circuit Court Ho. 2 of Baltimore City, denying an injunction to the plaintiff, who is the appellant, on a special case stated, under section 221 of article 16 of the Code, wherein the appellant, a citizen and taxpayer of Baltimore City, sought the opinion of the court as to the legality of certificates of indebtedness about to be issued by the Mayor and City Council of Baltimore under the authority of the Act of Assembly of 1927, ch. 431, entitled: “An act to authorize the Mayor and City Council of Baltimore to issue certificates of indebtedness of said corporation to an amount not exceeding one million five hundred thousand dollars ($1,500,000), the same to be expended for the purpose of acquiring land and improvements for establishing an airport for land and sea planes.” It was provided by section 1 of the act: “That the Mayor and City Council of Baltimore be and it is hereby authorized to issue the certificates of indebtedness of said corporation to an amount not exceeding one million five hundred thousand dollars ($1,500,000), said certificates of indebtedness to be issued from time to time and for such amounts, payable at such periods, and to bear such rate of interest, all as the Mayor and City Council of Baltimore shall by ordinance from time to time provide; but no stock or bond shall be issued in whole or in part unless the ordinance of the Mayor and City Council of Baltimore providing for the issuance thereof shall be submitted to the legal voters of Baltimore City 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 article 11 of the Constitution of Maryland.” And by section 2: “That the proceeds of said certificates of indebtedness, not exceeding their par value hereby authorized ¹²⁸ to be issued, shall be used for the acquisition by purchase or condemnation of land and/or improvements on land for the purpose of establishing and maintaining for public purposes an airport in the City of Baltimore to thereby afford suitable landing facilities for accommodating land and sea planes.” And by section 3, that: “Said certificates of indebtedness when issued shall bear interest at such rate or rates as may be provided by or under the authority of said ordinance.” In pursuance of this act the Mayor and City Council of Baltimore passed an ordinance, Ho. 1057, entitled: “An ordinance to authorize the Mayor and City Council of Baltimore (pursuant to chapter 431 of the Acts of the General Assembly of Maryland of 1927) to issue its certificates of indebtedness to an amount not exceeding ODe million five hundred thousand dollars ($1,500,000) for the acquisition by purchase or condemnation, of land and/or improvements on land for the purpose of providing and maintaining for public purposes an airport in the City of Baltimore to thereby afford suitable landing facilities for accommodating land and sea planes.” wherein it was provided by section 1: “That the commissioners of finance be and they are hereby authorized and directed to issue the certificates of indebtedness of the City of Baltimore to the amount of one million five hundred thousand dollars ($1,500,000) from time to time as the same may be required for the purposes hereinabove named; and the said certificates of indebtedness shall be sold by said eommissioners of finance from time to time and at such times as shall be requisite and the proceeds of the sale of said certificates of indebtedness, not exceeding their par value, shall be used for the purposes hereinbefore named, provided that this ordinance shall not go into effect unless it shall be approved by a ¹²⁹ majority of the votes of the legal voters of the City of Baltimore cast at the time and place hereinafter designated by this ordinance”; And by section 2: “Said certificates of indebtedness when issued shall bear interest at such rate or rates as may be determined by the commissioners of finance at the time when any of said certificates are issued.” And by section 4: “That this ordinance shall be submitted to the legal voters of the City of Baltimore for their approval or disapproval at the municipal election to be held in Baltimore City on the first Tuesday after the first Monday in May, 1927”; And by section 5, that: “A copy of this ordinance and notice of the time for holding said election shall be published in at least two of the daily newspapers published in said City of Baltimore twice a week for two weeks prior to said election, the first publication to be not later than April 18, 1927.” It appears from the case stated that, in pursuancé of the act of assembly and Ordinance Mo. 1057, the question of the approval or disapproval of the ordinance and proposed loan was submitted to the voters of the City of Baltimore at the regular municipal election held on the first Monday of May, 1927, there being printed on the official ballot at that election the following: “Airport Loan. “Ordinance Mo. 1057, Approved April 13, 1927. “An ordinance to authorize the Mayor and City Council of Baltimore (pursuant to chapter 431 of the Acts of the General Assembly of Maryland of 1927) to issue its certificates of indebtedness to an amount not exceeding one million five hundred thou ¹³⁰ sand dollars ($1,500,000) for the acquisition by purchase or condemnation of land and/or improvements on land for the purpose of establishing and maintaining for public purposes an airport in the City of Baltimore to thereby afford suitable landing facilities for accommodating land and sea planes. Eor Ordinance Against Ordinance on which said proposal there were 66,44-5 votes cast in the affirmative and 22,665 in the negative, so that there can be no question in this case about the approval of the loan, if the voters of Baltimore were sufficiently advised of the question upon which they undertook to vote. In pursuance of said statute) ordinance, and election, the board of commissioners of finance of Baltimore, by unanimous vote, on December 29th, 1927, adopted the following resolution: “Resolved, that the Mayor and City Council of Baltimore be and it is hereby authorized to issue $1,500,000 Airport Serial 1933-1967 Loan, Series 1933-1962, inclusive, for $43,000 each, and Series 1963-1967, inclusive, for $42,000 each.

That said loan be issued in the form of coupon bonds of $1,000 denomination, dated October 1st, 1927, registered as to principal only, and that they bear interest at the rate of 4% per annum!”; etc. The commissioners of finance advertised all of the certificates of indebtedness authorized by the act for sale or issue upon sealed proposals and, on January 10th, 1928, accepted the bid of the Baltimore Trust Company of Baltimore and Hambleton & Company of Baltimore, at $103.18 for each $100 of said bonds, they being the highest bidders therefor. ¹³¹ The legality of the said proposed certificates of indebtedness and of the power of the Mayor and City Council of Baltimore to issue the same are questioned upon the following grounds: (a) That chapter 431 of the Acts of 1927 and Ordinance Ho. 1057 of the Mayor and City Council of Baltimore do not comply with the provisions of article 11, section 7, of the Constitution of Maryland, in that neither the statute nor the ordinance specifies the rate of interest to be charged, “as required by the Constitution.” (b) That chapter 431 of the Acts of 1927 “pledg’es the credit of the city to the payment of a debt within the meaning of the Constitution, in excess of the said $1,500,000, namely by the amount of four per cent, interest thereon until paid.” (c) That Ordinance Ho. 1057 “is void in that it attempts to delegate to the board of finance commissioners the fixing of the rate of interest to be borne by the alleged certificates of indebtedness.” (d) That Ordinance Ho. 1057 did not prescribe the terms or fix the interest upon the loan, and the interest to be paid was not submitted to the legal voters of the city and not approved by them as required by section 7 of article 11 of the Constitution of Maryland. (e) That the loan and terms were not properly and legally submitted to the legal voters of Baltimore and approved by them. (f) That the word “debt,” as used in section 7 of article 11 of the Constitution includes interest, both accrued and to accrue, and therefore the submission of the loan without naming the interest thereon was in violation of the Constitution. The provision of the State Constitution, the violation of which is charged by the appellant in the case stated, is section 7 of article 11, which reads as follows: “Erom and after the adoption of this Constitution, no debt (except as hereinafter excepted), shall be created by ¹³² 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.” With the exception of the point raised as to the form of the ballot and the question thereby submitted to the legal voters of Baltimore, there is no question involved in this case which, in our opinion, has not been passed upon in Bond v. Baltimore, 116 Md. 685 , and Bond v. Baltimore, 118 Md. 159 , favorably to the contention of the appellees, and, because we are of the opinion that the ordinance was properly submitted to the voters, the decree of the Circuit Court of Baltimore City should be affirmed.

It is contended by the appellant that the airport bond issue is illegal because neither the Act of 1927 nor Ordinance Ho. 1057 specifies the rate of interest to be charged “as required by the Constitution.” The cases of Stanley v. Baltimore, 146 Md. 277 , and Thom v. Baltimore, 154 Md. 273 , relied upon as authorities for this contention, we think are not susceptible of this construction. What was decided in the Stanley case was that the Mayor and City Council of Baltimore, after having submitted the matter of the port development loan under the Act of 1920, ch. 560, and the ordinance passed in pursuance thereof, could not, by ordinance, issue the balance of the loan at a rate different from that fixed by the original ordinance; and in the Thom ease it was decided that it could not be done under the Act of ¹³³ 1927, ch. 155. There was nothing said in either of these cases from which it might be implied that the Constitution required the rate of interest to appear in an Act of Assembly authorizing the City of Baltimore to incur a debt. With regard to the power of the municipality and its latitude in fixing the rate of interest on loans, the opinion in the Stanley case, at page 293, said: “The act of the Legislature may authorize the creation of the debt or the extension of the credit in general or particular terms.

If the language of the act be specific and definite, the ordinance of the municipality authorizing the creation of the debt or credit must conform; but, if the authority be conferred by the Legislature in general