210 P. 900 | Mont. | 1922
delivered the opinion of. the court.
The plaintiff, a national banking corporation, brought this action against the city treasurer of the city of Glendive and the county treasurer of Dawson county, for the purpose of recovering all the city taxes paid by it to the county treasurer for the city of Glendive, under protest, in the year 1917, in excess of ten mills on the dollar, on an assessed valuation of $68,726. The levy made by the city for that year for general municipal and administrative purposes was eleven mills, and for other purposes six mills, a total of seventeen mills. The district court held that the levy of eleven mills for general municipal and administrative purposes was in excess of the city’s jurisdiction to the extent of one mill, and judgment was given the plaintiff for such excess—that is, one mill on the plaintiff’s total assessed valuation; and it further held that the levies made for other purposes to the total amount of six mills were within the power of the city, and as to these levies found against the plaintiff. No judgment was taken against the county and as to it the case was dismissed. Plaintiff has appealed to this court from the judgment.
The case was presented to and heard by the district court upon the pleadings and an agreed statement of facts; Judge .Stanley E. Felt, of the sixteenth judicial district, presiding by
On the sixth day of August, 1917, the city council of the city of Glendive passed what was termed or named by it a “resolution” entitled “Resolution determining the tax levy of the city of Glendive, Montana, for the year 1917,” which provided that:
“There be levied a tax of 11 mills on all of the taxable property within the limits of the city of Glendive, Montana for general municipal purposes; * * * and * * * that there be levied a tax of six mills * * * on all of the taxable property within the limits of the city * * * for the following purposes:
To create a sinking fund for filtration water bonds ... .001'
To create a sinking fund for city hall bonds...........00%
To create a sinking fund for sewer bonds.............00%
To pay interest on the funded debt...................004. ’ ’
Plaintiff’s argument presents four contentions: (1) That the city council did not have the power or authority to levy any taxes in excess of the ten-mill levy authorized by section 3342 of the 1907 Codes, as amended by the Act of 1917 (now section 5194, Rev. Codes 1921), for general municipal and administrative purposes, the effect of which contention is to urge that there is not any authority given to a city council to levy any special tax for bond interest or sinking fund purposes;
1. Plaintiff’s first contention, that a municipal corporation may not for any purpose levy a tax to exceed ten mills, is a novel one, and if it could be sustained would revolutionize the whole system and theory of municipal taxation for bond interest or sinking fund purposes. The contention is without any merit. It is elementary that a city has no inherent power to levy a tax on the property situated within its corporate limits, but only such power as is conferred upon it by statute, and that statutes conferring such authority are to be strictly construed. (Dillon on Municipal Corporations, sec. 1377; 28 Cyc. 1658, 1661.) The city asserts its power to levy the additional six mills by virtue of section 3343 of the 1907 Codes, which provides that: “The council may also assess and levy the special taxes or assessments provided for in this title.”
By section 3346 of the 1907 Codes it is stated that: “The council has power to levy, collect and equalize annually taxes on all the property in the city or town taxable for state and county purposes, and may by ordinance provide for the levy, assessment * * * and collection of the same”—the amount of which being limited by sections 3342 and 3343. As to the levy and assessment of such taxes it is provided by the statute as it then existed (sec. 3358) that: “The council must, on or before the first Monday of October of each year, by resolution, determine the amount of city or town taxes for all purposes, to be levied and assessed on the taxable property in the city or town for the current fiscal year. * * * ” The words “levied” and “assessed” are here used in the statute interchangeably, and not in any narrow technical sense; both refer
Appellant concedes that the grant of power to a city to levy taxes for general municipal and administrative purposes is conferred by section 3342, but why it is not likewise conferred to the full extent expressed therein or necessarily implied therefrom, by section 3343, is not argued by plaintiff. Section 3342 and section 3343 are each a part of the same Chapter, namely, Chapter 3 of Title III, Part IY of the Political Code of 1907, Chapter 3 being entitled “Organization and Government of Cities and Towns,” and Title III, “Cities and Towns,” and each is equally a grant of power to the city: (1) The former for the purpose of levying taxes for general municipal and administrative purposes to the limit of one per centum of the assessed value of the taxable property of a city of the population of Glendive; and (2) the latter for the purpose of assessing and levying the special taxes and assessment provided for in that title.
In the ease of Bain v. City of Goldsboro, 164 N. C. 102, 80 S. E. 256, the question was very much the same as is here presented, and the court there said: “The clause of the Revenue Act * * * limiting- the rate of municipal taxation to one per centum on the value of real and personal property does not apply to our facts, as the legislature has given special authority to levy the tax for the payment of the principal and interest of the bonds to be issued by the defendant, which brings this case within the exception of that section.”
2. Plaintiff makes the further contention that, even though the city council does possess the power to assess and levy taxes for the purpose of creating a sinking fund for the payment of the principal of the several bond issues when due, such levy must be made by ordinance, and that, instead of an ordinance, the city council passed a resolution purporting to make the levy. In each of the bond issues, except, so far as the record shows, the city hall bond issue, the ordinance providing for the issue recited that: “There is hereby authorized and directed to be levied and collected while the said bonds or any portion thereof are outstanding and unpaid, an annual tax which shall be sufficient, with any other revenues available therefor, to meet the payment of the interest on the said bonds as the same become due, and to provide a sinking fund for the payment of the principal thereof at or before their maturity; and it is hereby made the duty of the proper officers to see to the levy and collection of such taxes sufficient in amount for the said purposes, and to the application of the proceeds therefrom to the payment of the interest and principal of the said bonds as and when the same become due and payable.” This provision of the ordinance, together with all of the provisions of the statute, upon the issuance and sale of the bonds, became a part of the city’s contract with the purchasers. (Abbott on Municipal Corporations, sec. 223; 4 Dillon on Mu
A duty was imposed upon the city council to make certain levies of taxes for certain purposes, which duty could be enforced, if need be, by the holder of any of the city’s bonds. The city council made the levies required; it performed the duty that the law imposed upon it. It is true that it did not perform that duty in the exact method provided by the law, but it did make the levies and whether it termed its act
Irregularities on the part of the city council in levying taxes do not injure a taxpayer if the tax levy was in fact a legal tax to be levied. Nothing short of proof that the tax was illegal and invalid will support a recovery. The principle is well stated in Cooley on Taxation, third edition, at page 1493, as follows: “When a municipal corporation is sued for money collected and paid over to it as a tax, the idea on which the suit is predicated is, that the corporation has received that which, in justice, it ought not to retain. A suit will not, therefore, lie to recover back taxes paid when the only complaint that can be made of them is that the proceedings in their levy and collection have been irregular. The fact of their irregularity does not establish injustice; there must be something further in the case which either exempts the party from the tax altogether, or which, because of illegality or inequality, deprived the officers of jurisdiction. Municipalities do not guarantee to their people correct action on the part of their officers, and if they did, no one would be entitled to rely upon the guaranty until he was injured. Irregular action does not necessarily injure the parties concerned. * * * ”
The court in the ease of Town of White Sulphur Springs v. Pierce, 21 Mont. 130, 53 Pac. 103, had under consideration the construction of like provisions of the 1895 Codes, and it was held that although the board of aldermen of White Sulphur had not provided by ordinance for the collection of its taxes, nevertheless the taxes there in controversy, levied by the resolution of the board were legal.
3. Plaintiff contends that, even though it be held that the city was authorized to assess and levy taxes for bond
Plaintiff in its brief says that by the use of the words “funded debt” it was “probably the intention of the city to create a fund to pay the interest on the indebtedness authorized by Ordinance No. 143, but this is largely speculation.” Ordinance No. 143 was the one providing for the $45,000 water bond issue and the $5,000 sewer bond issue. Defendants in their brief claim that the language used related to water bonds, but what particular issue or issues is not stated. We believe it to be clear from the record that the levy “to create a sinking fund for filtration water bonds .001” related to the $65,000 filtration water bond issue made in 1936; that the levy “to create a sinking fund for city hall bonds .00%” related to the $27,000 city hall bonds; and that the levy “to create a sinking fund for sewer bonds .00%”. related to the $5,000 seiver bonds, leaving unprovided for the $45,000 water bonds issued in 1905 and the $15,000 water bonds issued in 1908, a total of $60,000, unless it can be said that the levy “to pay interest on the funded debt .004” applies to these two bond issues. But by what process of reasoning are we to argue that it was intended to include these two water bond issues? To sustain such a contention it would have to be assumed, first, that the revenues from the city owned water plant were insufficient for the purpose of paying the interest on these bonds and that the city had so found and declared. But as to these two bond issues there is not anything in the record by which the court could indulge in any such presumption. If the levy had, in specific terms, referred to the one or the other or both of these water bond
4. Plaintiff further contends that there could not have been any tax levy made by the city in behalf of the filtration water bond issue, because this issue was in excess of the constitutional three per cent limit of indebtedness, and unless the water .plant revenues are not sufficient to discharge the original obligation when due, and pay the interest when it accrues thereon, that a property tax cannot be levied to supply the deficiency. Assuming that the filtration water bond issue was in excess of the three per cent limit of indebtedness authorized by section 6 of Article XIII of the Constitution, then it is true that the revenues from the city owned water plant are irrevocably set aside and dedicated to the discharge of the principal and interest of such bon'd issue, and a taxpayer who is not a water user cannot be called upon to contribute anything, unless the water plant revenues are insufficient, and then only may a property tax be levied to supply the deficiency. (Edwards v. City of Helena, 58 Mont. 292, 191 Pac. 387.)
There is nothing in the record in this case to show that the revenues from the water plant were adequate to create a sinking fund for the redemption of the filtration water bonds. The plaintiff concedes that the pleadings and agreed statement of facts do not show this, and it proceeded upon che theory that the burden of proof was on the defendants to make
From all the foregoing, the court finds that the levy of one mill “to create a sinking fund for filtration water bonds,” and the levy of one-half mill “to create a sinking fund for the city hall bonds,” and the levy of one-half mill “to create a sinking fund for sewer bonds” were each valid levies, but that the so-called levy of four mills “to pay interest on the funded debt” is not a legal levy.
The cause is remanded to the district court, with directions to modify the judgment in accordance with the views herein expressed, and, when so modified, it will stand affirmed; each party to pay his own costs.
