State ex rel. Southard v. City of Van Wert

Full title: THE STATE, EX REL. SOUTHARD, DIR. OF HEALTH v. CITY OF VAN WERT ET AL

Court: Supreme Court of Ohio

Date published: Dec 21, 1932

126 Ohio St. 78 (Ohio 1932)

184 N.E. 12

Opinion

No. 23632

Decided December 21, 1932.

State health department — Sewage disposal orders mandatory and municipalities required to issue bonds — Section 1259, General Code — Fifteen-mill tax levy limitation inapplicable, when — Section 5625-2, General Code, and Section 2, Article XII, Constitution — Municipality to levy taxes, outside limitation, for current expenses, when.

IN MANDAMUS.

This is an action in mandamus filed in this court by the state director of public health, seeking an order to compel the city of Van Wert to comply with an order issued on April 14, 1920, by the then commissioner of health, with the approval of the public health council, requiring the respondent to install works and means Satisfactory to the director of health for disposing of the sewage of the city of Van Wert in such manner as to correct and prevent the pollution of Town creek, caused by allowing sewage from said city to enter therein.

The relator avers the taking of various steps leading to the issuance of such order, in compliance with Sections 1249 and 1250, General Code. He avers that such order has not been complied with and that Town creek is still being corrupted by sewage of the city of Van Wert, thereby creating a public nuisance detrimental to the health and comfort of the citizens of Pleasant and Hoaglin townships in Van Wert county, as stated in a certain petition filed in September, 1930, by fifty-seven qualified electors of these townships.

The relator therefore asks a writ of mandamus compelling the compliance with the orders theretofore issued satisfactory to the director of health, disposing of the sewage of the city in a manner to correct and prevent the pollution of Town creek, caused by said sewage, and asks that all other things be done necessary and proper to effectually carry out and comply with the order of the department of health served on the respondents on April 14, 1920.

To this petition the respondent has filed an answer, setting forth four defenses; the first defense being in the form of a general denial, having admitted certain formal matters.

The second defense in the answer is to the effect that the respondent claims that all funds that it is possible to secure from all sources are needed, necessary and required to pay the operating expenses of the city and to retire an already existing debt; that respondent has no funds to comply with or carry out the order of the relator and is not authorized to borrow money and issue bonds, for to do so would create an additional debt that could not be retired by a levy of taxes within the provisions of Section 5625-2, General Code, or within the provisions of Section 2, Article XII, of the Constitution of Ohio, as the present total tax levy of said city of Van Wert is now 18.6 ills, allocated as follows:

Within the 15-Mill Limitation

State school levy ............................ 2.65 mills School ....................................... 5.50 City ......................................... 4.84 Township ..................................... .06 County ....................................... 1.95 ------ Total ....................................... 15.00 mills

Outside the 15-Mill Limitation

School ...................................... 3.40 mills State ....................................... .20 ------ Total ....................................... 3.60 mills

The third defense alleges that to install such works and make such improvements as would be necessary to comply with and carry out the order of the relator would create an additional expense to the city of Van Wert, on account of maintenance and operation of the proposed plant and system, which could not be borne by said city, for the reason that said city has no funds so to do, and could not make an extra levy of taxes so to do without violating Section 5625-2, General Code, and also Section 2 of Article XII of the Constitution of Ohio, because the present levy of taxes in said city has already reached the 15-mill limitation, as shown and set out in the second defense.

The fourth defense recites that in an attempt to comply with the orders of the relator the electors of the city, at a general election in November, 1931, voted on the proposition of issuing bonds and making a levy of taxes outside the 15-mill limitation, as provided by law, to secure funds to comply with said order, at which election the majority of votes were cast against the bond issue.

To summarize, these defenses raise questions of law and the relator has filed a general demurrer; the chief question being, What effect upon the proceedings of this nature has Section 2, Article XII, of the Constitution of Ohio, as amended November 5, 1929, effective January 1, 1931?

Mr. Gilbert Bettman, attorney general, Mr. L.F. Laylin and Mr. William S. Evatt, for relator.

Mr. Jesse F. Beam, city solicitor, for respondent.

BY THE COURT.

This court has heretofore recognized the mandatory character of orders of the state department of health, issued pursuant to general laws. State Board of Health v. City of Greenville, 86 Ohio St. 1, 98 N.E. 1019, Ann. Cas., 1913D, 52. This conclusion has been reaffirmed since adoption of Section 3, Article XVIII, of the Constitution, relative to the power of municipalities to "exercise all powers of local self-government and to adopt and enforce within their limitations such local police, sanitary and other similar regulations as are not in conflict with general laws." City of Bucyrus v. State Department of Health, 120 Ohio St. 426, 166 N.E. 370; also State, ex rel. Neal, Dir. of Health, v. Williams, Mayor, 120 Ohio St. 432, 166 N.E. 377, where the decisions following the Greenville case are collected and adhered to.

This is a proceeding to compel compliance with the provisions of Section 1259, General Code, in conformity with the order of the state health department, which section in and of itself has nothing to do with tax limitations. Said section, in part, provides:

"Each municipal council, department or officer having jurisdiction to provide for the raising of revenue by tax levies, sale of bonds, or otherwise shall take all steps necessary to secure the funds for any such purpose or purposes."

The terms of this section are clear and mandatory. The only point in the case, then, is whether the 1 1/2 per cent. (15-mill) limitation of Section 5625-2, and of the Constitution, Section 2, Article XII, will prevent the issuance and payment of the bonds necessary to finance the construction of the sewage plant.

The amendment to Section 2, Article XII, adopted in November, 1929, effective January 1, 1931, provides, in part:

"No property, taxed according to value, shall be so taxed in excess of one and one-half per cent of its true value in money for all state and local purposes * * *."

Section 5625-2, General Code, provides in part: "The aggregate amount of taxes that may be levied on any taxable property in any subdivision or other taxing unit of the state shall not in any one year exceed fifteen mills on each dollar of tax valuation of such subdivision or other taxing unit, except taxes specifically authorized to be levied in excess thereof."

It does not affirmatively appear by the answer what proportion of the present tax rate of 18.6 mills is to be allocated for mandatory debt charges for the discharge of existing obligations. True, the payment of existing debts, as evidenced by bonds, and the payment of interest, and the creation of a sinking fund for the retirement of such bonds, are to be first provided for, and current expenses become a secondary consideration. This was the holding of the court in Rabe v. Board of Education of Canton School Dist., 88 Ohio St. 403, 423, 104 N.E. 537. That case was followed in State, ex rel. Heald, v. Zangerle et al., Budget Commrs., 94 Ohio St. 447, 115 N.E. 1013. In State, ex rel. Merydith Construction Co., v. Dean, Aud., 95 Ohio St. 108, 119, 116 N.E. 37, this court after referring to Section 2, Article XII, of the Constitution, said:

"This language is capable of but one construction. Everything of a municipal nature, all current expenses of every kind, must yield to the imperative necessity of paying interest and providing a sinking fund."

See, also, State, ex rel. Industrial Commission, v. Clinton Township Rural School District of Knox County, 112 Ohio St. 729, 149 N.E. 136.

Therefore any now mandatory duty to issue bonds and levy taxes must of course be subject to existing mandatory levies. The averment of the current levy of 18.6 mills is not a defense to the enforcement of a mandatory duty involving an additional mandatory tax levy, unless it appears that 15 mills of the current levy must be allocated to existing mandatory debt charges. The answer not disclosing this fact, the demurrer to the same must be sustained.

Much is said in brief of counsel, as well as in argument in open court, with reference to the constitutionality of Section 1259-1, General Code. But under our view of this case, that section is not involved, for the reason that it does not affirmatively appear in the answer that the tax commission of Ohio has certified to the director of health that the municipal corporation is unable to comply with the provisions of Section 1259 without a vote of the electors, by reason of existing debt and tax limitations.

So that for the purposes of this case it is unnecessary to discuss the effect of the amendment of Section 2, Article XII, relative to tax limitations, as passed in November, 1929, effective January 1, 1931. However, Section 5625-2, General Code, relative to the 15-mill limitation, should be alluded to. In that section it is provided for a limitation of 15 mills on each dollar of tax valuation to be levied in any one year, except taxes specifically authorized to be levied in excess thereof; and it is further provided that the limitation known as the 15-mill limitation shall include both the limitation imposed by said section and the limitation imposed by Article XII, Section 2, of the Constitution.

It is further to be noted that the amendment of Section 2 of Article XII, while fixing the 1 1/2 per cent. limitation for all state and local purposes, also provides that "laws may be passed authorizing additional taxes to be levied outside of such limitation, either when approved by at least a majority of the electors of the taxing district voting on such proposition, or when provided for by the charter of a municipal corporation."

This constitutional amendment became effective January 1, 1931, and in June of that year Section. 5625-15, General Code (114 Ohio Laws, 845), was amended by the Legislature to provide that:

"The taxing authority of any subdivision * * * by a vote of two-thirds of all the members of said body, may declare by resolution that the amount of taxes which may be raised within the fifteen mill limitation will be insufficient to provide an adequate amount for the necessary requirements of the subdivision, and that it is necessary to levy a tax in excess of such limitation for any of the following purposes:

"1. Current expenses of the subdivision.

"2. For the payment of debt charges on certain described bonds, notes or certificates of indebtedness of the subdivision issued subsequent to January 1st, 1925."

Current expenses must be secondary to levies to meet mandatory requirements, such as discharge of bonded indebtedness, interest thereon, and also compliance with orders of the state department of health issued under general state laws, which we hold to be mandatory. If current expenses of the municipality cannot be provided for within the 15-mill limitation, and provision also be made for payment of bonds required to be issued in order to comply with the orders of the state department of health, then the current expenses must yield and the municipality take advantage of Section 5625-15, General Code, as authorized by the provisions of the constitutional amendment, Section 2, Article XII, to secure funds for current expenses.

That the Legislature may impose upon a municipality the performance of certain duties of a public nature, and require it either to raise moneys for that purpose or to devote to it revenues already on hand, is well recognized. 19 Ruling Case Law, 767; McQuillin on Municipal Corporations (2d Ed.), vol. 1, 665 et seq.; Cooley's Constitutional Limitations (8th Ed.), vol. 1, 491.

For the reason that the answer does not affirmatively show that the levy necessary to pay the bonds which must be issued to comply with the order of the state board of health in financing the construction of the sewage plant, together with the mandatory levies, would result in exceeding the limitations of the Constitution or of the General Code, the demurrer to the second, third and fourth defenses of the answer must be sustained.

Demurrer to answer sustained.

MARSHALL, C.J., JONES, DAY, ALLEN, KINKADE and STEPHENSON, JJ., concur.

MATTHIAS, J., not participating.