Council of Allen Park v. Allen Park Village Clerk

The council of the village of Allen Park, by petition, seeks our writ of mandamus directing the village clerk to countersign refunding special assessment bonds, pledging the full faith and credit of the village as authorized by the council. The clerk refuses so to countersign, claiming such refunding special assessment bonds may not issue unless authorized by vote of the village electorate. The charter of the village requires that bonds be countersigned by the clerk. The original special assessment bonds, authorized by the village council, pledged the full faith and credit of the village, without vote of the village electors. The purpose of refunding, in part, is to reduce the rate of interest.

The question of law here involved is well stated as follows in petitioner's brief:

"Is an electoral vote necessary, under the provisions of Act No. 278, § 26, subd. (e), Pub. Acts 1909, as amended?"

The statute, 1 Comp. Laws 1929, § 1788 (Stat. Ann. § 5.1536), relating to prohibited bond issues, provides:

"(e) Or authorize any issue of bonds except special assessment bonds, * * * unless approved by three-fifths of the electors voting thereon at any general or special election."

Counsel for defendant concedes that no electoral vote was required by the village charter. The sole question turns upon the meaning of the term "special assessment bonds," as employed in the mentioned section of the village home rule act. The quoted subdivision excepts special assessment bonds from need of electoral authorization.

Counsel for defendant urges us to circumscribe the term "special assessment bonds" as employed in the statute to such as are payable solely from the assessments levied against districts and the collections thereof made. So to hold would render the village, maker of the bonds, a mere tax collector for the bondholders. The right of the village to issue bonds in anticipation of collection of special assessments carries a liability to pay the bonds. Such bonds are excepted from the amount of prohibited village indebtedness.

Counsel for plaintiff cite our opinion in Callahan v. Cityof Berkley, 307 Mich. 701. That case is in point. Counsel for defendant claims that, upon the pivotal point here involved, the opinion was dictum in that, while the point was presented in the appeal, it was not argued by counsel representing the parties. It was argued in the brief amicus curiae, rightly considered, and a motion for rehearing denied.

The village clerk is directed to countersign the refunding bonds, as issued by the village council. No costs.

NORTH, C.J., and STARR, BUTZEL, BUSHNELL, SHARPE, BOYLES, and REID, JJ., concurred.