Action brought by plaintiff on behalf of himself and other taxpayers of city to enjoin city from proposed sale of sewer bonds. On plaintiff's motion for summary judgment, the Court of Chancery, Bramhall, Vice Chancellor, held that notice of election on proposed sale of bonds did not comply with statutory requirement that pertinent facts relating to the loan be stated, where rate of interest which bonds would bear and manner of financing bonds were not stated.
Judgment for plaintiff.
This is an action brought by plaintiff on behalf of himself and other taxpayers of the City of Milford to enjoin the defendant from the proposed sale of sewer bonds.
Daniel J. Layton, Jr., and H. Edward Maull, Georgetown, for plaintiff.
Henry J. Ridgely, Dover, for defendant.
[34 Del.Ch. 371] BRAMHALL, Vice Chancellor.
On September 8, 1953, at a meeting of the Council of the City of Milford, that body passed a resolution proposing to the electors of the City of Milford that the sum of $175,000 be borrowed to finance the enlargement and improvement of the City's sewage treatment and disposal plant and, as provided by the City's charter, called for a special public hearing on said resolution for September 21, 1953, at 8:00 o'clock p. m. At said hearing a resolution was passed calling for a special election to be held in the City of Milford on October 23, 1953, for the purpose of issuing bonds in the said sum of $175,000 to expand and improve the disposal plant. On November 10, 1953, a certificate was duly filed with the Council of the City of Milford, certifying that at said election 12,429 votes were cast for the proposed bond issue and 11,852 votes were cast against the proposed bond issue. As a result of these proceedings, the Council duly advertised said sewer bonds for sale. Plaintiff thereupon instituted this action against defendant to enjoin the sale and issuance of said bonds.
Plaintiff alleged in his complaint the following objections to the issuance of said bonds:
(1) The failure of the notice to voters to provide for the rate of interest which said bonds would bear or the manner of financing the payment of said bonds, which plaintiff alleged was required by Chapter 162, Vol. 37, Laws of Delaware, 1931, Sec. 22(B), subd. 1;
(2) The failure of the full membership of the Council to attend the citizens' meeting of September 21, 1953;
(3) Irregularity in the conduct of the election in that the Justice of the Peace who presided at such election was not a resident of the City of Milford;
(4) Irregularities in voting in that all ballots offered by voters in person were permitted to be dropped into the ballot box without the election board first passing upon the correctness of the number of votes to which each voter was entitled; and,
(5) The alleged refusal of the election board to accept proxies unless the witness to the signature on said proxy was produced in person.
[34 Del.Ch. 372] An amended complaint was filed on January 12, 1954, in which the additional objection was raised that neither the type, manner, nor cost of the proposed expansion and improvement of the disposal plant was set out in said resolution calling for the election. After answer filed by defendant, plaintiff filed a motion for summary judgment.
I shall first consider the objections raised to the notice of the election sent out by Council of the City of Milford. That notice was sent out as a result of the requirement of Sec. 22 of Chapter 162, Vol. 37, Laws of Delaware, 1931, which provides, in part, as follows:
‘ Provided, however, that the borrowing of the money therefore shall have been authorized by the City Council and shall have been approved by the electors in the manner and at the time following:
‘ (B) 1. Council by resolution shall propose to the electors of the City by resolution that the stated amount of money shall be borrowed for any of the above purposes. The resolution shall state the amount of money desired to be borrowed, the purpose for which it is desired, the manner of securing the same, ...