is, was it lawful to submit the question provided for in paragraph 7 at the special election provided for in paragraph 6, or was the commission after the water company had failed and refused to comply with paragraph 6 confined absolutely to the provisions of paragraph 8?

a

as

"Section 264a became a law May 17, 1910. By its terms the water company was to place in escrow good and sufficient deed of conveyance of its water works on or before July 1, 1910. A special election was to be held on the first Tuesday in September, 1910, in case the deed of conveyance of the water company hould be deposited in escrow, above stated, for the purpose of determining whether $8,000,000 in bonds should be issued to purchase and repair the existing water plant. This question was not submitted at the special election as the water compary did not deposit its deed as provided in paragraph 6, but under paragraph 7 in lieu of the question stated in paragraph 6, the question in paragraph 7 was submitted at said special election. The language of paragraph 7 in regard to the submission of the question therein provided for uses the words 'shall be submitted.' Paragraph 8 provides that the commission, in case the water company has not accepted $7,000,000 for its plant, as provided in paragraph 6, shall proceed to make a careful investigation of the value of said plant for the uses and purposes of the city and county, and its inhabitants, and also proceed to make a careful estimate of the cost of constructing and completing a new water works system for the city and county and the inhabitants thereof, and that said commission may submit an alter native bond proposition at the special election provided for in paragraph 6 for the issuance of bonds in such sum as the commission may deem it advisable for the acquisition or construction of the water plant or any part thereof by any of the ways within its powers.

"In the light of what has transpired it would no doubt have been better had the commission proceeded under paragraph 8, still it could not know before July 1, 1910, whether the water company would accept $7 000 000 in bonds for its plant, and the time between July 1, 1910, and September 6, 1910, the date of the special election, would in our judgment be entirely insufficient to make a careful investigation of the value of the water company's plant, and of the cost of

constructing and completing a new water system. Indeed, we think that it would have been impossible for the commission to have performed the duties required under paragraph 8 within the time limited. This is demonstrated by the time that it took the engineering committee subsequently appointed to make an investigation of the cost of constructing a new system of water works.

"So far as mere procedure is concerned we think the commission's failure to act under paragraph 8 was justified. And we are also of the opinion that such failure to act in no wise invalidated the election which was actually held. The language of paragraph 7 is mandatory, and the question upon which the qualified electors were to vote was clearly defined."

"It is further claimed that, whether the commission was obliged to follow paragraph 8 or not the failure to make a careful estimate of the cost of constructing a new system of water works prior to the special election at which $8,000 000 in bonds were authorized renders the vote nugatory."

The case of Carlson v. City of HeJena, 39 Mont. 82, 102 Pac. 39, 17 Ann. Cas. 1233, noticed.

"There can be no question in this case that the submission of the question voted upon to the qualified taxpaying electors in any way interfered with the discretion of the commission or the council of the city and county as to where the supply of water should be obtained, so the case cited is inapplicable on that point. The case, however, does seem to hold that it was necessary for the council of the city of Helena, Montana, before it submitted the bond proposition to a vote of the taxpayers, to have ascertained whether or not a water supply and water system could be obtained and constructed for the sum of $600,000; and one of the grounds upon which the court seems to have held the bonds void was that the council never did ascertain prior to the vote what a water system for the city of Helena would cost. We all must admit that that would be the business way of going about the matter, but where, as in the case at bar, the charter authorizes the creation of an indebtedness in the sum of $8,000,000 to provide a municipal water plant or system and everything incidental or necessary thereto for supplying the city and county and all its inhabitants with water for all uses and purposes upon a vote of the taxpaying electors, and the charter further provides that

the question shall be submitted as provided in paragraph 6 of 264a, we can not conclude that the mere failure of the commission to ascertain the probable cost of a new system would render the vote provided by law nugatory. In our judgment section 264a left it to the discretion of the commission whether it should follow paragraph 7 or paragraph 8."

Fixing date, form and maturity of bonds.

"It is further contended that the commission failed and neglected to fix the date, form and maturity of the $8,000,000 of bonds prior to the special election of September 6, 1910, and that, therefore, the commission has no power to issue the same. It appears that by the ordinance effective January 15, 1914, the council of the city and county fixed the form and date of the bonds. They were to bear date January 1, 1914, and all the installments of said bonds were to mature not later than thirty years from the date of original issue, and all of the bonds should absolutely mature and be payable thirty years after their date. It also appears from the record that while litigation did not prevent the commission from fixing the form, date, and maturity of the bonds prior to the special election, it did cause the delay to a large extent which happened subsequently thereto.

"Paragraph 5 of 264a empowers the commission to fix the date, form, and maturity of the bonds without any limitation as to the time it should so do. The taxpaying electors must be charged with a knowledge of this law, and when they voted the bonds they did so charged with such knowledge. The question submitted to the taxpaying electors was the question the law required to be submitted to them and that was sufficient."

"It is also contended that the public utilities commission has no authority under section 264a to issue what is termed 'straight, flat, thirty-year bonds.' but they were to issue only 'call bonds,' and that in any event it was the mandatory duty of the commission to determine whether said bonds were to be straight, flat bonds or call bonds prior to the special election. Paragraph 5 of section 264a provides:

No such bonds shall be used or sold at less than par, nor sold except after advertisement as in this charter provided for the sale of public improvement bonds, and they may

be called for redemption by the commission in like manner as provided in section 314.'

"It is conceded that the commission under the grant of power to say at what time the bonds should mature would have the right to issue straight, flat, thirty year bonds. But it is claimed that the language last quoted restricts and limits the power of the commission in some way so as to deprive them of their authority to issue straight. flat, thirty-year bonds. We do not think so, and consider the reasoning to the contrary highly technical. It is insisted, however, that in any event it was the mandatory duty of the commission to determine whether the bonds were to be straight, flat, thirty-year bonds or call bonds prior to said election, and to inform the taxpayers thereof. As we have said before there are many things that the commission might have done, but we think it is enough to require them to do what the law commanded, and we find no command in the law for informing the taxpayers of whether the bond would be straight, flat, thirty-year bonds or call bonds."

Provision for sinking fund.

"Section 6 of Ordinance No. 4, Series of 1914, provides for a tax upon all taxable property in the city and county sufficient to pay the an nual interest on said bonds, and to provide a sinking fund to extinguish the principal of said bonds at their maturity.

"Section 7 of said ordinance provides that when the water plant or system shall have been constructed that the revenue derived from the operation of said water plant or system, or so much thereof as is not actually needed for the operation and maintenance of the said water plant or system, shall be paid into the treasury of the said city and county for the purpose of creating a sinking fund to extinguish the principal and interest of the said bonds within the said period of thirty years, and that whenever there is any money so paid into the treasury of the city and county from the revenues of the said water plant, then and in that event and until said sums of money are exhausted, no part of the levy provided for in this connection to be levied upon the taxable property of the city and county, shall be utilized in the extinguishment of the principal and interest of said bonds.

"It is now contended that the law only authorized the commission to

provide for a sinking fund to be cre ated out of the net earnings derived from the operation of the water plant when constructed; and sections 258, 261, and 263 of article 9 of the charter are cited in support of this contention. We infer from the language of the ordinance that it was the intention of the commission and council to make such a provision for a sinking fund as would render it certain that the bonds with interest would be paid. The ordinance does provide a sinking fund to be paid out of a net revenue arising from the operation of the water works system; and it further provides that no part of the levy provided for in section 6 to be levied upon taxable property of the city and county, shall be used where there is sufficient income arising from net rev

enue.

"It is claimed also that the commission ought to have stated in the proposition submitted to the vote of the taxpaying electors how it proposed to create a sinking fund for the payment of the principal and interest of the bonds. So far as submitting the proposition to the electors is concerned the law did not require it, and we may not say the bonds are void, because something was not submitted to the taxpaying electors that the law did not provide should be submitted. Nor can we hold the bonds invalid merely because the commission and council have made a provision for a sinking fund that may not have been necessary. Any irregularity in this respect can be easily corrected by the commission and council." Wheeler, et al., v. City and County of Denver, et al., — C. C. A. —, 231 Fed. 8.

Construction of acts of incorporation. 139. (Pa. 1860.) "Now we freely subscribe to the rule that neither privileges, powers, nor authority can pass by an act of incorporation, unless they be given in unambiguous words, and that an act giving special privileges must be construed strictly. That in such a case, where a sentence is capable of having two distinct meanings, that a construction must be given to it most favorable to the public. But in applying these principles to this case, it must be done with reference to the subject-matter contemplazed by the legislature as a whole." Jacob E. Curtis, Plaintiff, v. The County of Butler, 24 How. 435, 16 L. Ed. 745.

140. (Ind. 1862.) "The object of this court has been, in cases of a like kind, and it is still its purpose, to give to the contracts of counties for the purchase of railroad stocks and for borrowing money, to aid in the construction of railroads and other internal improvements, a strict interpretation of the legislative acts empowering them to do one or the other; but at the same time to give protection to the bona fide holders of such contracts as have been put on sale in the money market, by corporations or by counties acting corporately, against

their efforts to be relieved from the responsibilities of official acts, in putting such paper into circulation, for capitalists to invest money in them, on assurance that the principal and interest would be paid accordingly. We repeat now, as appropriate to the subject-matter of the case in hand as it was in the case in which this court said it, 'that corporations are as strongly bound as individuals are to a careful adherence to truth in their dealings with mankind, and that they cannot by their representations or silence involve others in onerous engagemets, and then defeat the calculations and claims their own conduct had superinduced.' An act giving special privileges must be construed strictly. That, in case a sentence is capable of having two meanings, a construction must be given favorable to the public. However, that, in applying those principles of construction, it must be done with reference to the subject-matter contemplated by the legislature as a whole, so as not to allow its manifest purpose and design to be defeated by denying the use of means by which the main object could only be accomplished." Moran v. Miami County Comrs., 2 Black, 722, 17 L. Ed. 342.

Construction of grant of power.

141. (Ind. 1863.) The grant of authority, "To take stock in any char

tered company for making road or roads to said city," does not limit the taking of stock in companies whose lines come within the city. Van Hostrup v. Madison City, 1 Wall. 291, 17 L. Ed. 538.

May" sometimes means must." 142. (Ill. 1866.) A statute of Illinois declared that "The board of supervisors, under township organization, in such counties as may be owing debts which their current revenue, under existing laws, is not sufficient to pay, may, if deemed advisable, levy a special tax, not to exceed in any one year 1 per cent. upon the taxable property of any such county." Held, that this language though in form permissive was peremptory. "The conclusion to be deduced from the authorities is, that where power is given to public officers, in the language of the act before us, or in equivalent language - whenever the public interest or individual rights call for its exercise the language used, though permissive in form, is in fact peremptory. What they are empowered to do for a third person the law requires shall be done. The power is given, not for their benefit, but for his. It is placed with the depositary to meet the demands of right, and to prevent a failure of justice. It is given as a remedy to those entitled to invoke its aid, and who would otherwise be remediless. In all such cases it is held that the intent of the legislature, which is the test, was not to devolve a mere discretion, but to impose a positive and absolute duty.' The line which separates this class of cases from those which involve the exercise of a discretion, judicial in its nature, which courts cannot control, is too obvious to require remark. This case clearly does not fall within the latter category." Supervisors United States ex rel., 4 Wall. 435, 18 L. Ed. 419; City of Galena v. Amy, 5 Wall. 705, 18 L. Ed. 560.

Difference between mandatory and enabling statutes; railroad aid; constitutionality.

145 (N. Y. 1873.) "It may be that a mandatory statute requiring a municipal corporation to subscribe for stock in a railroad company, or to contribute to the construction of the railroad of such a company, is not a legitimate exercise of legislative power, and that it is not even an act of legislation. This was decided by the Court of Appeals of New York in the case of The People ex rel. v. Bacheler (8 Alb. L. J. 120). But the present is no such case. The legislative act by which the town of Queensbury was authorized to issue bonds in aid of the railroad from the village of Glens Falls to intersect with the Saratoga and Whitehall railroad was not mandatory. It was merely enabling. It authorized the issue and donation of the bonds, if approved by a popular vote. It was a mere grant of power upon conditions, coupled with a prescription of the mode in which the power granted might be exercised. And that it was a constitutional exertion of legislative power must be considered as settled affirmatively by the decisions of this court in Railroad Co. v. The County of Otoe (16 Wall. 667, 21 L. Ed. 375), and Olcott v. The Supervisors of Fond du Lac County (16 Wall. 678,

L. Ed. )." Town of Queensbury v. Culver, 19 Wall. 83, 22 L. Ed. 100.

Subscription to railroad stock on behalf of township; construction of statute.

146. (III. 1876.) Action to recover the amount of certain interest coupons issued with certain bonds by Charles Clement, supervisor and agent of East Oakland township, upon a subscription to the stock of the P. & D. Railroad Company. The assumed, and only, authority for such bonds was An act to incorporate the Paris and Decatur Railroad Company," approved February 18, 1861. Said act required the railroad company to give thirty days' notice by publication of the opening of books for subscription to the capital stoc thereof, and provided that "it shall be lawful for all persons of lawful age or for the agent of any corporate body. to subscribe any amount to the capital stock of said company." Held. that said act conferred no power on

municipal corporations to subscribe for such stock and that the provision referred to private corporations when it authorized agents to subscribe, and does not refer to counties, cities, towns, or townships, and cannot be held to embrace them.

"We have held that a town cannot subscribe for stock in a railroad cor

poration unless it has the authority of the legislature for the act. The leg islature usually requires the approval of the electors of the town, at an election for that purpose, as a condition to such subscription. Doubtless, the legislature can impose or omit conditions, in its discretion. But when the sanction of a popular vote is required, it must be obtained." Township of East Oakland v. Skinner, 94 U. S. 255, 24 L. Ed. 125.

"To borrow money for any object,"

etc., authorizing railroad aid. 147. (Iowa, 1863.) The charter of the city of Muscatine authorized the city"To borrow money for any object in its discretion, if at a regularly notified meeting under a notice stating distinctly the nature and object of the loan, and the amount thereof, as nearly as practicable, the citizens determine in favor of the loan, by a majority of two-thirds of the votes given at the election." Held, that this provision conferred power on the city to issue bonds to aid in the construction of railroads. Meyer v. City of Muscatine, 1 Wall. 384, 17 L. Ed. 564; Comrs. of Marion County v. Clark, 94 U. S. 278 (284), 24 L. Ed.

59.

Depots and side tracks incident to railroad.

148. (Kan. 1877.) In the grant of power to aid in the construction of railroads or other works of internal improvement is included authority for the construction of depots and side tracks of a railroad.

"Such constructions are constituents, essential parts of every railroad, without which it would be incomplete and incapable of serving the uses for which it is intended. The cost of building them is always, and properly, charged to construction account, and not to repairs or expenses of operation; and a mortgage of a railroad, without further description than such is necessary to identify it, covers its side tracks and de

pots." Township of Rock Creek v. Strong, 96 U. S. 271, 24 L. Ed. 815.

Proposition to voters for issuance of bonds may be submitted more than once.

149. (Miss. 1878.) There being nothing in the enabling act indicating the intention of the legislature to the contrary, a proposition to issue the bonds once defeated by the electors may again be submitted for their approval. Supervisors v. Galbraith, 99 U. S. 214, 25 L. Ed. 410.

Act providing that bonds issued under it should not be invalid because of errors in calling election, canvass or return of votes, or signing of bonds.

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150. (Ill. 1879.) A statute of Illinois, approved March 6, 1867, authorizing townships to subscribe to the capital stock of railroads, provided for the calling of elections to vote upon the question of making such subscription and issuing bonds therefor on the application of twenty legal voters of the township, and required twenty days' notice of the election to be given. Section 5 of the statute declared that no mistake in the giv ing of the notice, or in the canvass or return of votes, or in the issuing of the bonds, shall in any way invalidate the said bonds so issued; provided, that there is a majority of the voters at such election in favor of such subscription." An election was called by the clerk of Roberts township on an application signed by only twelve legal voters, and was held after but ten days' notice. It was urged that the provisions of said section 5 of said act violated the Constitution of Illinois.

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"We do not, however, feel justified in declaring that provision of the act to be in conflict with that instrument. We are referred to no decision of the State court which so decides." O Certainly the legislature could prescribe the mode of ascertaining the sense of the voters, who alone, it is claimed, were the corporate authorities of the town, within the meaning of the State Constitution. And as it might, in the act of March 6, 1867. have allowed the election to be called upon the application of a less number of voters and taxpayers than twenty, and to be held after a notice of ten