*1 OF The BOARD EDUCATION OF DISTRICT, body

GRANITE SCHOOL Utah, Plaintiff,

politic Cross-Respondent,

Appellant and body COUNTY, corporate LAKE

SALT Monson, politic and Arthur Defendant, County Treasurer, Re-

spondent Cross-Appellant.

No. 17175. Utah.

Supreme Court of 8, 1983.

Feb. *2 month, and of each the first Fisher, Casper, receipt Charles B. Salt Byron M. on March 31 a final settlement of Educ. to make City, Lake for Board Aetna Lite and year. each See Osuala Peters, Cannon, Bill Thomas Theodore L. Utah, which Casualty, 608 P.2d Lake City, Salt Avery, John harmonized should be held that statutes County. purpose the intent and carry out order *3 Treasur- undisputed that the the law. It is HOWE, Justice: with these stat- strictly comply er failed to of Education of Granite The Board utes. action (Granite) brought this District School County Lake damages from Salt seeking K. Winder entered Judge David District Monson, Lake Arthur Salt (County) and resolving the is- judgment summary partial Treasurer, (Treasurer) alleging that County as a mat- in favor liability sue of its timely pay to Granite they had failed to dam- reserving the issue of law but ter of which the Treasurer property share of the interim Granite trial. In ages for counter- collected. The Treasurer had change theory its complaint to amended its (in already of sums claimed for costs excess en- unjust at law to from one recovery of Granite) collecting, paid apportioning, of by to parties agreed The equity. in richment of Granite. distributing taxes on behalf and pro- the Treasurer also and this amendment par- both court denied relief to The district un- seeking recovery for in equity ceeded and the Treasurer appeals ties. Granite un- upon based collection costs reimbursed cross-appeals from those denials. just enrichment. sepa- collects taxes for The Treasurer E. Banks trial, Judge Jay District At the located within Salt taxing rate entities good Treasurer had “acted ruled that the then the reve- County Lake and disburses with re- manner faith and in reasonable of Dis- nues to them. On behalf collection, apportionment to the gard U.C.A., pursuant so trict he does tax monies collected of distribution 59-10-66, part: pertinent which states in that: also found him.” The court county treasurer duty It is the of of Treasurer, adopting program The ..., of each school pay to the treasurer to the various preliminary distribution ..., day first of each district are cleared his as funds taxing entities month, in his hands collected moneys all com- substantially thereby has office [sic] school for and due such ... [district] governing statutory duties with his plied pay shall county .... treasurer distribution. such school district treasurer of each ... no that there was held The court further delin- share of proportionate ... [its] show, that Gran- presented evidence taxes, interest, and costs penalty quent belong- money much prove, not how ite did redemptions there- on all tax sales the Trea- deposit by on final was from, ing and shall make a to Granite monthly, during the time March date day any given on the last of settlement surer byof Granite. each year.... period complained of U.C.A., 1953, requires: the Treasur- 53-7-10 During years on collected interest earned all er had be collected taxes shall Such general County’s to the deposit are collect- taxes on officers as other taxes county Nonetheless, trial court deter- pay the account. county and the treasurer shall ed not un- Lake was with- that to the treasurer of said board mined “Salt same collected, of Granite expense who at the days after it is enriched thirty justly through order the actions subject to the District shall hold same School trial Treasurer.” the board of education. Lake Salt that Granite also concluded court harmoniously these statutes Construed expense at the enriched unjustly funds pay the Treasurer to require the activi- County through of Salt thirty (30) days districts within to school Lake County unjust significant ties of the Treasurer enrichment had no effect uncontrovert- though upon liability even evidence is the issue since issue assess, collect, costs solely upon interpretation.of ed that it more to an depended and distribute tax monies for apportion question regardless the statutes is billed recovery. Granite School District then basis of Because amendment [sic] issue, paid by District. to and Granite School did not affect the the Treasur- basic argument simply unpersuasive er’s amendment, PARTIAL complaint SUMMARY JUDGMENT its by virtue of required that the whole case be considered Judge Granite contends that Banks’ including liability. Con- the issue departure Judge Winder’s order anew — Judge it was error for Banks to sequently, partial summary judgment constituted an the issue when it reconsider had appellate of an interlocutory review order nothing previously been resolved inter- clearly beyond authority. which was his to him in a present vened to the issue However, of an that is adjudication revision *4 light. different not may appropriate. question be The final is ap under what revision is circumstances INTERPRETATION STATUTORY propriate. See Richardson v. Grand Central Furthermore, Banks’ Judge appli Utah, (1977), 572 P.2d where with Corp., rule compliance” cation of the “substantial conflicting respect rulings pleadings to on v. Corp. in Copper outlined Kennecott analogous problem, in this a somewhat Utah, (1978).to P.2d 705 the City, ruling to by judge Court held that a one as transferring practice collect Treasurer’s in the sufficiency of the does not pleadings in district was also error. ed school revenues prevent judge considering another from the the considera Preliminarily, fundamental same of law if raised properly it is legislative interpreting tion in statutes on motion the subsequent presents a which intent; light and is determined light. case in different also ex See State designed the to purpose the statute Nelson, Stenberg rel. v. Mont. carry out the applied Intent to where, achieve. to P.2d 870 after amendments if it can be in a manner which purpose done pleadings, filing pretrial memoranda and the language with stat is consistent conference, pretrial judge sev a second Commission, v. Tax ute. Johnson action into trials separate ered an three (1966). Quoting 2d though judge, even the first who had been Statutory Construction from 1A Sutherland But see disqualified, had ordered one trial. 25.03, Kennecott, 575 at (4th Ed.) P.2d 402, 551 § City Vegas Moore of Las 92 Nev. noted: 706 we (1976), where held that a P.2d 244 it was judge abused in over which second his discretion is no rule direc- There universal judge first feature ruling only since the under all circum- tory provisions may, rehear distinguished stances, which motion for from those distinguished be ing previous the second from judge before are The intention of mandatory. which however, had was the be motions which been denied should con- legislature, gram- of additional rule of authority. trolling citation and no formalistic stand mar or word form should case, order, Judge In this Winder’s legislative intent. way carrying out judgment, was being partial summary [Emphasis added.] open changed revision if circumstances controlling justify it. would Therefore are which Generally those directions

question is whether the fact that Granite done, to be thing but one at of the essence theory recovery its changed merely to a view given are with a different which equity law to one constituted conduct prompt and proper, orderly presentation of the issue of business, obey no failure We Judge Banks. hold that Granite’s rights those whose will occur to prejudice the basis of recovery to seek amendment statute, protected by are proper orderly are not com- conduct of business. monly mandatory, rights considered of the school districts to receive [T]he provision protected will not be considered mandato- the collected revenues are statutes; and, ry if the of the statute purpose rights jeopardized has been those are no sub- when instead of distribution on a substantially complied with monthly rights stantial have been jeopardized. collection, thirty days basis or within [Emphasis over 98% of taxes Novem- added.] year prac- ber 30 of each and the transfer receipt of revenues tice in significant disharmony has been with right to the use of those revenues are sub the statutes. stantially delayed by the Treasurer’s failure following observe 59-10-66 and 53-7-10. The an indication of the offers purpose of these merely history practice: statutes is not of the Treasurer’s transfer (Treasurer Lambourne) Date Amount Transferred Transferred 13,1973 5,853,000.00 December $ 2,1974

January 140,000.00 January 7,1974 4,024,000.00 1,1974 February 1,646,000.00 February 27,1974 19,869.69 ' 28,1974 May (cid:127) 2,066,886.32 $13,749,756.01 TOTAL *5 (Treasurer Monson) 1974 Date Transferred Amount Transferred 2,1974 142,000.00 December $ 3,1974 56,200.00 December 16,1974 2,900,000.00 December 19,1974 5,000,000.00 December 9,1975 January 3,000,000.00 31,1975 January 3,000,000.00 12,1975

June 1,224,128.14 $15,322,328.14 TOTAL (Treasurer Monson) 1975 Date Transferred Amount Transferred 2,1975 1,561,453.00 December $ 15,1975 10,000,000.00 December January 5,1976 3,015,643.00 3,1976 February 163,001.00 31,1976 March 1,876,367.51 15,1976 54,201.86

June 17,1976 16,018.38 December $16,686,684.75 TOTAL (Treasurer Monson) 1976 Date Transferred Amount Transferred 7,1976 1,767,700.00 December $ 13,1976 9,713,500.00 December 17,1976 384,963.33 December 28,1976 692,000.00 December 4,1977

January 252,000.00 31,1977 2,842,945.17 March $18,029,608.50 TOTAL

1035 Board, 26 Utah compliance” ap is an Grant v. Utah State Land “Substantial preju 100, (1971). rule where no propriately employed 2d 485 P.2d 1035 See also State Gates, 182, as a result of failure to follow (1950); dice occurs 118 Utah statute; and, generally Wells, 55, the direction of the (1900). 22 61 P. 534 Miles v. public of time within which prescription prejudiced by Because directory Sjos only. officers must act comply strictly with Treasurer’s failure 373, P.2d Bishop, trom v. 15 Utah 2d 393 statutes, legis- because .terms (1964); Hamblin v. Board of Land State duty it a of the Treasurer to lature made Commissions, 402, 55 Utah 187 P. 178 as and since pay prescribed, revenues (1919); Wight City ex rel. v. Park State “shall”, usually accepted with a a word District, 61, School 43 Utah 133 P. connotation, has used mandatory been Nelson, 226, (1913); Tanner v. 25 Utah throughout statutory provisions, (1902). P. 984 the case here. But is not interpreted must be statutes Where from consideration of the whole As a strictly they plainly as written. object appears statute and its nature or it result, comply failure to the Treasurer’s' was to legislature the intent of the makes him with the terms of the statutes public on a officer rather impose duty legisla- this construction is Only by liable. discretionary than a even the word power, pur- out the carry tive intent followed to “may” mandatory. has been held to be statutes in a manner which is poses of the State, Fuller v. Ala.App. So.2d Conse- language. consistent with their Emanuel, (1944); ex rel. Rowe v. resolving judgment Banks’ quently Judge 156, (1942). In this Neb. 7 N.W.2d in the Treasurer’s favor the issue of duty 59-10-66 states that is the case § “[i]t ground compliance” on the of “substantial to the trea county pay treasurer to error. surer of each ... school district [Emphasis of each month ... day first this supplied.]” language, This statute’s INTEREST ON REVENUES as

tax nature and the nature of 53-7-10 other revenue raised Taxes and part legislation of the Uniform School Fund are re apportioned purposes for school carry the Treasurer duty mandate a C.J.S., *6 412(a) funds. 79 garded as trust § purposes timely out the distribution v. (1952). at 279 Cf. Board Education preju of revenues. In view of this and the 97, (1917). The Daines, 166 P. 977 50 Utah result, the lan dice that would otherwise to receive diverted board or officers entitled guage appears of both of these statutes gov them from the may revenues recover mandatory. be which has re body or officer ernmental supports which further Language 79 or the benefit of them. ceived the funds the conclusion that the directives of these C.J.S., (1952). generally 413(c) at 285 See mandatory statutes are is the term “shall” Am.Jur.2d, (1973). 432 In New 84 at 68 appears throughout provisions. which both 185, 347, Fisher, 21 v. 180 U.S. S.Ct. Orleans validly interpreted While “shall” has been was held liable (1901), city 45 L.Ed. 485 Kennecott, (as supra), it is directory as in collected it on the amount of interest for presumed mandatory and has been usually collected but had de taxes it had school in interpreted previously as such this of Louis City also paying over. See layed Herr v. jurisdictions. other' Salt Board, 32Ky., S.W. v. Louisville School ville Utah, v. (1974); 525 P.2d 728 County, discharged (1895) city where a 406 1111, Zeimer, 45, 79 10 Utah 2d 347 P.2d the school board over to paying from Smith, v. 119 (1960); A.L.R.2d 821 Swift in behalf of entire amount 126, (1948). 609 This Court Colo. 201 P.2d the mo the fact that despite school board the terms of a statute assumes fund. sinking paid into nies had been given an inter advisedly used and should be held case, Treasurer In this which is in accord pretation application way the same in trust in revenues meanings. Granite’s usually accepted with their 1036

he acts as a trustee in collecting provides. revenues Mining Wasatch Co. v. Crescent for other entities. delay Mining 8, in transfer of 7 Company, (1890), Utah 24 P. 586 317, 348, Granite’s revenues allowed the aff’d. U.S. S.Ct. 38 L.Ed. (1894); Goodbe, Young 562, v. benefit from the interest 82 U.S. earned on them 566, (1873). 21 L.Ed. 250 since Political subdivi- during years in the Trea- sions have not been exempted from this surer all interest earned on them to rule. Co., Baker Lumber Co. v. A.A. Clark the County’s general account. In New Or- 336, (1919); 178 P. 764 Wilson v. leans, supra, city where a collected school 506, City, Salt Lake 52 Utah 174 P. 847 taxes, quoted the court the Circuit Court of (1918). Appeals with approval stating: law, “Under the school taxes In view of the delay Treasurer’s per revenues, carried ten cent per transferring interest annum the al from the day they lowing became of interest on school delinquent. It other funds jurisdictions penalty accepted was a and the rule to non-payment allow debts, interest, interest on overdue we taxes. This conclude as penalty, or for de- contends, there are neither layed payment taxes, of school formed no legitimate grounds public policy nor in part city’s proper revenues. The exempting law for Lake County city collecting acting same was as a ' paying interest on tax monies which were trustee for the school Delay board. overdue Granite. This is not a case of the payment of operated preju- to the error, protected Treasurer’s investment dice, not of the city, but of the school bond salary. or forfeiture of Neither is this fund and its creditors. We are unable to governmental action barred by immunity. any authority find in law or morals for immunity Governmental may not be used as the city appropriate to itself this inter- claims; nor, equitable defense to need a est. To allow such an appropriation claim for damages present first have been would be to reward the city for its own ed to the County bring for Granite to this negligence in the collection of the taxes action. El Enterprises, Rancho Inc. v. Mur due the school fund. We fully agree with Utah, ray City Corp., the master interest, that ‘the as a mere and cases cited therein. Salt Lake accessory of the principal, belongs to the acquiesced receipt in the of the benefit of same person to principal whom the be- interest delayed earned the Treasurer’s ” longs.’ [Citations omitted.] appropriation of Granite’s funds and must 197, 352, at U.S. S.Ct. at 45 L.Ed. at be held accountable for receipt of that ben 492. See also Pomona City School District efit. 510, Payne, 9 Cal.2d 50 P.2d However, the trial court found that (1935), where the court stated: show, there presented was no evidence It cannot questioned be that school funds *7 that prove, and Granite did not how much as such remain the property of the school money belonging deposit to Granite was on district, more, believe, ... No we can the any given during Treasurer on date the county, the absence of clear statu- period complained the time of by Granite. tory authority, assume to be the owner of Nothing argued which has been dissuades the interest increments upon such us from relying upon findings these funds.... The county is the simply trial court. Granite’s own witness merely agent district, of the school it cannot year-end deduced backwards from a total to itself, allocate to nor enrich its own cof- calculate deposit any given date. This is with, fers the interest upon increments upon insufficient data which to base a re the money placed in its custody ... covery. Consequently, precluded Granite is Utah statutes do not subject address the recovery from the of interest any monies of interest on However, school funds. earned on its collected revenues. Other well established rule allows interest on questions pertaining this issue are fore overdue debts even where no statute so closed. the everyday exigencies Daines,

Should supra. the a l. v. The legislature has Treasurer’s make compliance office with defined tax specifically what collection ex unworkable, the statutes here involved then penses county pass through may to a legislature the appropriate is the forum U.C.A., for taxing entity 17-19-15 the Treasurer to seek a change law through 17-19-17. is It reasonable that to allow for the demands of his office. This in enacting statutory these provisions the Court will continue to exercise its authority legislature advisedly limited the amount law; the interpret we refrain as- which school districts would be required suming legislature’s the task writing of it. It, therefore, reimburse. was error not Judge Banks to find that We make our prospective decision on the unjustly enriched that despite fact col liability of the Treasurer for payment lecting distributing and tax monies for of interest. Apparently practice his of de- Granite exceeded the amount imposed by laying payment of taxes to the various enti- paid appeal statute Granite. An ties is one long-standing. Yet no one has to a maxim of cannot equity overcome the challenged heretofore practice that in the express our provisions of on the statutes courts. This is the first case to reach this subject. trial is court affirmed on this Court on the subject. may It extremely be point. disruptive government to county to be sud- subjected denly to liability payment for the is so that a judgment case remanded sizeable amounts interest for which consistent with this opinion may be entered. county budgeted. end, has not In it Parties to stand their own costs. county taxpayers who will suffer the brunt of the Treasurer’s omission. Justice STEWART, J., and VeNOY CHRISTOF- will be best served our our giving deci- FERSEN, District Judge, concur. today sion prospective application only.

DURHAM, J., does not here- participate in; CHRISTOFFERSEN, Judge, District COUNTERCLAIM sat. The Treasurer not deny does that Granite expenses required collection OAKS, (concurring dissent- Justice statute; he argues simply that because it ing): cost tomore collect Granite’s share affirming I in the opinion concur paid, than Granite he should be allowed to denial of Treasurer’s relief recover the difference. The basis of his expenses for the excess col- counterclaim argument sought is that equi- since Granite portions lection. I also concur those ty, compelled it should be to do equity. (1) that opinion concluding complied substantially (cid:127)Treasurer had not recognized We have right (2) statutory with the requirements, the Legislature impose a duty upon city holds the taxes he County Treasurer county officers to collect taxes for pur earnings their in trust for the collects and poses county other than purposes and to do them,1 whom he collected entities for so or compensation with without for the no de- governmental immunity expenses incurred. Tax Comm’n. suit for fense District’s Logan, to.Granite School City of 88 Utah *8 no (1986); Foods, Christensen, express opinion relief in I equity. Best Inc. v. 392, applying appropriateness majority’s (1930); P. 1001 Board of Dist., of County prospectively. Education Cache et its rule School “proportionate share” “make a 1. In addition to the reasons in Justice tricts their cited opinion, specified confirm time Howe’s 59-I0-66’s reference to final settlement” a moneys the collections “collected for” the school districts and that the school districts own only pay its them in trust. command that the Treasurer the dis- the holds Treasurer I the denial of relief to dissent from The its fact equitable Granite on claim.2 Utah, Plaintiff and STATE much of its prove

that Granite did not how Respondent, on any Treasurer held money County made a given date is irrelevant. Granite HICKEN, Defendant Robert showing County that the Trea- prima facie Appellant. moneys of its trust surer had held some exceeding thirty-day statu- periods for 18321. No. tory misappropriated limit and had Court of Utah. Supreme is periods. obtained for those This earnings fact that evident from the over 98% Feb. 1983. been November 30 taxes have year considerably of each but less than 98% days have been over beneficiary having

after time. The that

made breach of prima showing facie

trust, had burden of the trustee

accounting for its administration means, By

trust the burden funds. of the infor- party possession

falls to the

mation, and all doubts will be resolved principles These

against it. are well-settled E.g.,

of trust law. Malcolmson v. Goodhue Bank,

County 198 Minn. National (1936); Bogert, Trusts & Trus-

N.W. 157 G. 1962); (2d Restatement

tees ed.

(Second) (1959). These of Trusts § to

principles apply should all fiduciaries. obliged Treasurer

account to the Granite School District for

all it on tax funds earnings has obtained for the statu- beyond

held in trust

tory period.3 This relief essential to legislative on how

integrity of directions

funds various taxes shall be ex- raised I remand with

pended. would therefore against

instructions to enter decree and its Treasurer on the issue proceed accounting and to an

liability damages. the amount of

determine C.J.,

HALL, concurring concurs OAKS, J. dissenting opinion actually unproductive Only Judge were 3. if the funds I 2. also dissent from conclusion statutory apply partial or other the court the issue would Banks could reconsider case, any In liability. plaintiffs equita- rate of interest. theoretical substitution on majority’s to “interest overdue legal surely references suffi- ble for ones offered claims equity inapposite. suit in summary partial debts” cient basis reconsider ownership, not debt. judgment on is based since such substitution recovery. necessary changed the elements