Hitchins v. Mayor of Cumberland

Henderson, J., delivered the opinion of the Court. This friendly suit by a taxpayer was brought under the Uniform Declaratory Judgments Act, Code (1951), Art. 31 A, to test the validity of a proposed bond issue of the City of Cumberland. On February 25, 1957, the Mayor and City Council of Cumberland passed Ordinance No. 2049, authorizing the City to issue and sell $500,000.00 of “Cumberland Urban Development Bonds of 1957”. The parties agree that the Ordinance was passed in pursuance of the authority contained in Section 81(e) of the City Charter, as amended by Charter Amendment Resolution No. 4, effective September 28, 1955, and that this Charter Amendment was made in pursuance of the authority given to municipalities in Maryland, other than Baltimore City, by Article XIE of the Maryland Constitution, approved November 2, 1954, and by the implementing legislation enacted by Chapter 423, Acts of 1955, adding sections 9 to 43 to Article 23A of the Code ³¹⁹ (1957 Supp.).

Chapter 423 applies to Cumberland. Hitchins v. City of Cumberland, 208 Md. 134, 143 . Sections 31 to 39, inclusive, of Art. 23A, relate to the creation of Municipal Public Debt. Sec. 31 provides that every municipal corporation shall have the power “under this subheading to borrow money for any proper public purpose and to evidence such borrowing by the issue and sale of its general obligation bonds in the manner herein prescribed, unless the charter of said municipal corporation shall provide a different procedure for the borrowing of money or shall be amended so to provide in the manner set forth in this subtitle.

Charter amendments for such purpose are hereby authorized. * * * Whenever there shall be any conflict between the provisions of this subheading and the charter of any municipal corporation, the provisions of said charter shall control.” Sec. 32 provides that all bonds of a municipal corporation shall be authorized by resolution or ordinance, and states in some detail what such ordinance shall contain. The last paragraph of sec. 32 contains a sentence that “it shall not be necessary to submit any such resolution or ordinance or the question of the issuance of bonds authorized thereby to a referendum of the qualified voters of said municipal corporation unless said resolution or ordinance shall so provide or unless the charter of such municipal corporation shall so require.” Sec. 34, under the subheading “Limitations on authority of municipal corporations” provides in subsection (3) : “If the charter of any municipal corporation shall require a referendum on the issue of all or any particular type of bonds of such municipal corporation, such bonds shall be issued only if a majority of the qualified voters voting on the referendum held on such issuance shall favor the same but if the majority of said qualified voters shall vote against such issuance then another referendum shall not be held on the question of issuing bonds for the same public purpose until the expiration of one year from the date upon which the issuance of said bonds shall have been so disapproved”. It is agreed that prior to the charter amendment of September 28, 1955, any proposed bond issue, unless authorized ³²⁰ by specific legislation, had to be approved by two-thirds of the voters at a general or special election. Section 81(e), as amended provides that the Mayor and City Council shall have the power “to borrow, from time to time, such sums of money as they may deem necessary for the general welfare of the city and its general corporate purposes”, after passing and publishing an ordinance authorizing such loan, “and provided further that such loans shall be obtained and bonds issued evidencing said loan, any time after fifty (50) days, but not longer than four (4) years from the date of the passage of said Ordinance, unless on or before the fortieth (40) day after being so ordained or passed there shall be presented to the legislative body of the municipal corporation * * * a Petition signed by 2 0% or more of the persons who are qualified to vote in municipal general elections in the City of Cumberland * * *.

If the Petition for a referendum complies with the requirements of this section, the legislative body shall, by Resolution * * * within thirty days * * * specify the day and hours for the election * * * at either the next regular municipal general election or at a special election, in the discretion of the legislative body. In the event a special election is designated, it shall be held within a period of not less than forty (40) days nor more than sixty (60) days after the final passage of the Resolution providing for the referendum. * * * If a majority of the voters approve said loan and the issuance of said bonds at any referendum held thereon in pursuance of the provisions of this subsection, said loan may be made and said bonds may be issued.” The parties agree that the change in the charter with reference to the initiation of a referendum, and the required vote thereon is valid under the provisions of the enabling act and not inconsistent with anything therein contained. We agree. Cf.

Hitchins v. City of Cumberland, supra, and Woelfel v. Mayor and Aldermen, 209 Md. 314 . Section 1 of Ordinance No. 2049 provided that “said Mayor and City Council shall issue and sell, at any time after fifty (50) days from the passage of this Ordinance but not later than four (4) years from the date of its passage, its negotiable coupon serial bonds * * * .” Section 2 of the ³²¹ Ordinance provided for the form of the bonds and coupons, to be dated May 15, 1957, with interest payable on November 15 and May 15 of each year. Section 3 of the Ordinance provided that “in the event no referendum is requested by the requisite number of petitioners within forty (40) days from the date of the passage of this Ordinance, * * * the said Commissioner of Finance and Revenue shall cause advertisement to be made and inserted in two daily newspapers printed and circulated in the City of Cumberland, not less than ten (10) days prior to the date of the sale thereof, and such further advertisement as he may deem proper, giving notice that he will offer said bonds for sale on the 21st day of May, 1957, at 10:00 o’clock A. M., E. D. S. T. The advertisement to be published as provided in this Section shall be in substantially the following form and the terms and conditions therein set forth shall be the terms and conditions governing such sale: * * * .” There was opposition to the bond issue, and petitions were circulated and filed on or before April 6, 1957. On May 6, 1957, the Mayor and City Council decided that the petitions did not contain the valid signatures of 20% of the qualified voters, and that no referendum should be held.

However, a suit was threatened, and the City made no effort to sell the bonds on May 21, 1957. On May 27, 1957, the City passed an amendatory Ordinance No. 2057, adding a new Section 3A to the original Ordinance, purporting to give to the Mayor and City Council authority to fix, by a subsequent ordinance, a definite date for the sale of said bonds, provided they were sold within the four year period established by Section 1 of the original Ordinance. The new Ordinance also provided for advertisement of the bonds by the Commissioner of Finance and Revenue, and further provided that if any referendum should be held on the original Ordinance No. 2049, it should be considered as having been held on that Ordinance as amended by Ordinance No. 2057, and that no further referendum should be held on Ordinance No. 2057, or on Ordinance No. 2049 as amended by Ordinance No. 2057. On May 30, 1957, suit to compel a referendum on Ordinance No. 2049 was filed, but had not ³²² been decided when this suit was heard in the trial court.

We were informed at the argument that the petition for a referendum has since been held valid. The bill of complaint in the instant case, filed on June 4, 1957, recited the foregoing facts and alleged that the Mayor and City Council did not have the authority to amend the original Ordinance, or to prohibit a further referendum on the new Ordinance, or to refer the new Ordinance to a vote along with the original one. A restraining order was passed, by consent, to delay the referendum and the issuance of any bonds pending the decision in the instant case. A hearing was held on bill and answer.

The Chancellor decreed (1) that Ordinance No. 2049 was valid, and (2) “That the insertion therein of the conditional date