Mayor of Baltimore v. Gill

Bartol, C. J. delivered the opinion of the Court. This is an appeal from an order of the Circuit Court of Baltimore City, directing a writ of injunction to be issued, to restrain the appellant, its officers and agents, from acting under, or in any manner carrying out the provisions of a certain Ordinance passed by the Mayor and City Council of Baltimore, which is exhibited with the bill of complaint, and set out in the record. The bill filed by the appellees alleges that the Ordinance in question is unconstitutional, null, and void. First.

Because it was passed in violation of the provisions of Article 11, section 7, of the Constitution. And, secondly, because, independently of the restrictions imposed by the Constitution, the Mayor, and City Council of Baltimore, as a municipal corporation, had not the power or authority to pass the Ordinance. The defendant demurred to the bill, and alleged for cause of demurrer, “ that the complainants have no standing in a court of equity to maintain their suit.” Two questions arise upon the record, and are necessary to be decided on this appeal. 1st. Is the Ordinance valid and constitutional ? ³⁸⁶ 2d.

Have the complainants a right to file the bill for an injunction ? 1. In passing upon the question of the validity of the Ordinance, we shall not enter into an examination of the nature, objects and general powers of municipal corporations ; or consider whether apart from the constitutional restriction, the Mayor and City Council of Baltimore would possess the power to pass the Ordinance in question, without special authority for that purpose being conferred on them by law. It is quite immaterial to consider that subject in the present case, because, in our judgment, the powers of the Mayor and City Council, with regard to the subjects embraced in the Ordinance have been defined and limited by the express provisions of the Constitution, and the validity of the Ordinance may, therefore, be tested by an examination of its provisions in the light of the restrictions imposed upon the city government by the seventh section, of the eleventh Article of the Constitution. That is as follows: “ From and after the adoption of this Constitution, no debt (except as hereinafter excepted) shall be created by 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 ³⁸⁷ by a majority of the votes cast at such time and place; but the Mayor and City Council may temporarily borrow any amount of money to meet any deficiency in the City Treasury, or to provide for any emergency arising from the necessity of maintaining the police, or preserving the safety and sanitary condition of the city, and make due and proper arrangements for the removal {quaere renewal) and extension, in whole or in part, of any and all debts and obligations, created according to law, before the adoption of this Constitution.” Without stopping now to construe the several parts of this clause of the Constitution, or attempting to define their precise meaning and extent, it is very obvious that it prohibits the Mayor and City Council from creating any debt for the purpose of aiding in the construction of works of internal improvement, without the sanction of the General Assembly, and the assent of a majority of the legal voters of the city.

In order to determine whether the Ordinance is within the prohibition, we must look at its provisions, and ascertain its true construction, purpose, and effect. It is sot out at length in the record and need not be repeated here, except so far as may be necessary to point out its main features and operation. We hazard nothing in saying that no one can read it, without being impressed with the conviction that the City Council must have been sensible of the difficulties which the Constitution interposed in the way of such legislation, and that its phraseology was ingeniously chosen for the purpose of avoiding the restrictions imposed by that instrument. But in considering it, we must not forget that we are dealing with substance, not with form.

It is the thing done, or sought to be accomplished, which must determine the question of the power of the Mayor and City Council to pass the Ordinance. This depends upon the true con ³⁸⁸ struction, operation and effect of the whole Ordinance, not upon the form or mere phraseology of some of its parts. "When it provides in the first section, that one million of dollars shall be raised by the pledge or hypothecation of stock held by the city, it is substantially the same thing as if it provided in terms for borrowing the money. To raise money on a pledge is to borrow it; and the party from whom it is thus obtained actually loans it, although in the Ordinance it is called furnishing the money.

When the Ordinance speaks of returning the money so raised, it means simply repaying the money borrowed. So when the Ordinance provides that the money so obtained shall be invested in the bonds of the Western Maryland Rail Road Company, to be secured by mortgage; that it shall be applied only to the construction and equipment of the road, and be furnished only as, and when required for that purpose ; it, in substance and effect, provides for loaning the money to aid in the construction of that work of internal improvement. Though in the title and body of the Ordinance the word invest is used, and it purports to be a mere change of investment, it is impossible to shut our eyes to the fact that the whole scheme of the Ordinance is to borrow the sum of one million of dollars, to secure its repayment by hypothecating stock of the Baltimore and Ohio Rail Road Company held by the city, not for the necessary or proper use of the city, nor for the pui’pose of making a bond fide change of investment; but for the purpose of enabling the city to loan the same to the Western Maryland Rail Road Company, to aid that company in making and equipping its road. This purpose, sufficiently obvious from the face of the Ordinance, is made the more manifest by an examination of the message of the Mayor to the City Council, and the report of the committee by whom the Ordinance was pre ³⁸⁹ pared, all of which are exhibited with the bill of complaint and found in the record.

It requires no refined or labored argument to show that the Ordinance is within the scope and purview of the constitutional provision, and that the Mayor and City Council were prohibited from passing it, without the previous authority of an Act of Assembly, and the sanction of a vote of the citizens. The Constitution declares that “ no debt shall be created by the Mayor and City Council,” unless it be first sanctioned by an Act of Assembly, and submitted to the legal voters, and approved by a majority of the votes cast. No language could be broader, or more comprehensive. The only exception is found in the latter part of the section, which permits the Mayor and City Council “ temporarily, to borrow money to meet a deficiency in the city treasury, or to provide for any emergency arising from the necessity of maintaining the police, or preserving the safety and sanitary condition of the city.” These powers are necessary to maintain the faith of the city, and to secure its peace and good government, they are expressly excepted by the Constitution, and may be exercised within the discretion of the city government; but with this exception, the Constitution expressly forbids the Mayor and City Council from creating any debt.

Does the Ordinance before us propose to create a debt within the meaning of the Constitution ? If this question is answered in the affirmative, then, as its object and purpose are not within the exception, it does what the Constitution forbids. As we have before said, it provides for borrowing one million of dollars, upon the pledge of valuable property, or assets, held by the city. Such a transaction is, in our judgment, creating a debt within the intent and meaning of the Constitution.

It has been argued that no debt is created by the Ordinance, because, by the second section, ³⁹⁰ it is provided that the parties loaning the money shall look for its repayment, exclusively to the stock pledged, and that in no event is the city to be liable or responsible for the return or repayment of any part thereof, even sthough the stock pledged should prove insufficient. This provision was doubtless adopted for the purpose of avoiding the restriction imposed by the Constitution. "We think it altogether ineffectual for that purpose. A debt is money due upon a contract, without reference to the question of the remedy for its collection.

It is not essential to the creation of a debt that the borrower should be liable to be sued therefor. No suit can be maintained against the State by one of its citizens, and yet debts are created by the State which it is bound in good faith to pay. If money be borrowed by the Mayor and City Council, which, by the contract, is to be repaid, it is immaterial to inquire whether the city is liable to be sued therefor, or its payment be secured by the pledge or hypothecation of specific property held by the city, it would be in our judgment, equally the creation of a debt, within the meaning of the Constitution in one case as in the other. The Constitution is not to have a narrow or technical construction ; but must