124 P.2d 248 | Idaho | 1942
In the trial court respondent, trustee for the owner of all the remaining unpaid bonds of the special or local improvement district involved, successfully sued out a writ of mandamus to compel appellant to reassess, under the second paragraph of section 49-2726 I. C. A.,1 the property in the district to recoup, in the *634 first cause of action, a claimed mistaken or inadvertent deficiency of $2796.55 in the assessment, security for the payment of the principal of the district's bonds, and in the second cause $3220.20 asserted rightful interest thereon.
Appellants unavailingly urged that mandamus was the wrong remedy; that there was no deficiency in fact or in law, and if there was, respondent was charged with knowledge and notice thereof barring his action for relief, and that both causes of the action are barred by the statute of limitations.
Respondent introduced all the city's records of the district, and the testimony of respondent as to the work performed, receipt of warrants therefor, and preliminary negotiations culminating in the exchange of warrants for bonds, and of an expert accountant analyzing the above records and financial transactions. Appellant introduced no evidence. The evidence is uncontradicted in that no witness disputed another. It is in minor particulars somewhat confusing, and different conclusions or inferences could in some instances be drawn. The learned trial judge ordered a reassessment against all property in the district except that upon which the full assessment had been paid prior to October 1, 1926. No assignment of error challenges this segregation. The trial court's meticulous, substantiated findings disclose the following desultory and checkered history of this district.
All preliminary proceedings for the organization of the district, initiated March 3, 1925, were correct, and the assessment roll of $25,347.78 was approved August 4, 1926, to cover construction cost, $22,001.68, engineering inspection and supervision, $2,172.18, advertising, clerk's costs, incidental engineering, printing, etc., $473.92, and $700 interest on interim warrants to October 1. The construction contract for $22,001.68 was let to J. C. Maguire Construction Co., June 23, 1926, and the project completed. *635
By October of the same year, interim warrants had been issued in payment of charges against the district in the amount of $24,384.86. Pursuant to notice authorized by the council and given by the city clerk2 certain property owners prior to October 1, 1926, paid $2952.39, their assessments in full. The clerk (notwithstanding the specific provisions of the statutes covering local or special improvement districts [49-2715 and 49-2721] and correlated provisions [
All of the above payments made by the city and property owners were applied on the payment of such warrants and interest thereon, leaving, November 30, 1928, when the bonds were disposed of, a warrant indebtedness of principal and interest amounting to $16,185.77. $13,278.88 was received from the sale of the bonds, to which amount the assessment roll on the face thereof had been reduced by debiting against it assessments paid June, 1928. $110.34, collected prior to May 1, 1928, was in the bond redemption fund. There was thus on the face of the roll only a legitimate total on November 30, 1928, of $13,389.22 with which to retire the warrant indebtedness of $16,185.77 as required by 49-2717. The clerk paid the warrant indebtedness by finagling $969.93 from the Treasurer's Investment Fund, which had no connection whatever with the district involved herein; accrued interest on the bonds of $308.14, which she considered had accumulated and which she required the purchaser to pay; and the collections from an installment assessment made by her June 1, 1928, of $1518.48, and which was deducted from the assessment roll. This assessment should have been for the payment of bonds, but she paid warrants therewith. Thus the actual amount of the assessment roll standing as security for the payment of bonds November *637 30, 1928, was short $2796.55, the basis of respondent's first cause of action.
"Oh, what a tangled web we weave When first we practise to deceive." — Scott.
Bonds to the amount of $13,278.88 were issued and sold November 30, 1928, to J. C. Maguire Co., really exchanged with the money above mentioned, for the amount of warrants outstanding. Later the company was dissolved and these bonds distributed to respondent's cestui que trust, his wife, for her stock in the company. Twenty-six bonds were for $500 each and the 27th for $278.88, all due on or before November 30, 1938. Bond No. 1 was paid August 30, 1930, bond No. 6 was paid July 7, 1936, and bond Nos. 2 to 5 were paid September 15, 1936. All interest was paid in full on presentation of coupons until 1937.
The city clerk embezzled from the funds of this district $2585.87, which was recovered in a separate action prior to the one herein by respondent against appellant, and thereby bonds 7 to 11 and $85.87 on bond 12 were paid January, 1939. There thus remain in respondent's possession 16 bonds, 14 bonds in the denomination of $500 and one bond in the denomination of $278.88, and $414.13 due on bond No. 12, or a total of $7693.01. Thus the reassessment of $2796.55 if paid in full, which it may not be and for which failure respondent will have no recourse, will leave $4896.46 of the principal of the bonds unpaid.
In limine, appellant asserted at the oral argument that the deficiency in this assessment roll arose partially, if not entirely, because of the cancellation of $3071.08 thereof, by sale for delinquent taxes to the county of a portion of the property in the district. This point as such is not in appellant's specifications of error, nor is the matter argued in its brief. The dates of these cancellations or tax sales are not shown nor is there any analysis indicating such pyramiding of this amount as to wipe out the total difference between the amount actually paid on the bonded indebtedness to date of $5585.87, and $13,278.88, or $7693.01.
Appellant urges that respondent's cause of action, if any, accrued at the time the roll was first short, if at all, *638
namely, November 30, 1928, and it is barred by sections
The limited nature of special improvement district bonds is well known and needs no reiteration, merely mental retention as we proceed.4
The record shows and the court found that respondent had no actual notice of this deficiency and inadequacy of the assessment roll until March 4, 1937. Suit was commenced September 22, 1938. The shortest length of time in any of the statutes of limitations urged by appellant is that in
The ordinance authorizing the issuance of the bonds pledged the good faith of the city in the carrying out of its duties in connection with the district, and that all steps had been properly taken, which necessarily included a valid and sufficient assessment roll, because it is apparent from even a superficial study of the statutes providing for local improvement districts that there shall be in existence at the time of the issuance of bonds a face value assessment at least equal to the amount of the bonds issued. These recitals in the ordinances and bonds should be of some effect. (Burger v.Calek,
Four different parties are interested in and affected by the issuance of local improvement bonds: the city and the general taxpayers therein, because while not directly nor as such responsible for the payment of any of the indebtedness, contingent liabilities, based upon improper actions of the city, may materialize and result in consequent financial loss to and enforced contribution by the general taxpayers. (Wheeler v. City of Blackfoot, supra.) The bondholder and the property owner within the district are those most vitally interested — the bondholder desirous that within the limited scope of this type of security he may receive that to which he is legitimately entitled, and the property owner that the strictly limited obligation as against his property be not enlarged. It is apparent, however, that the legislature intended by section 49-2726 to provide that under certain factual circumstances a reassessment could and should be imposed upon the property owner within such districts to make good a deficiency occasioned by mistake or inadvertence. All that we are required to hold as a matter of law and all that we do hold is that the circumstances detailed above constitute, under the applicable statutes made and provided, a sufficient cause by mistake or inadvertence to *640
justify the imposition of the reassessment required herein by the judgment of the trial court. No actual additional charges are thus imposed upon the property owners because until the principal as assessed is paid it remains a charge, the inopportune assessment in June, 1928, was not paid on the bonds but was used to pay warrants. The property owners received the benefit of the delay in payment and of the improvement and are charged equally with the bondholder with notice of the law that in the event of mistake or inadvertence reassessment may ensue. The property holder is charged with a duty at least equal to the bondholder to see the law is complied with. (Henning v.City of Casper,
"If an individual would give money to another in return for a supposedly valid obligation in writing, and the written instrument should turn out to be invalid, no court would hesitate an instant in making recovery possible. Principles of justice and honesty fundamentally apply to individuals, municipalities, states, and Nation alike, and should be applied alike, unless constitutional or statutory provisions forbid. Municipalities, it is true, are creatures of the Legislature and have only such powers as are granted them, and cannot do the things prohibited by law, as we held in the first part ofTobin v. Town Council,
In Lucas v. City of Nampa,
The purpose, intent, and applicability of the two paragraphs of 49-2726 is to be kept in mind and is important. The first paragraph is for the correction of errors in law and the second factual defects. (United States v. John K. Catherine S.Mullen Benev. Corp.,
"Under the above decision there can be no restoration of the lien against the four lots sold by the county, for the special assessment, nor can they be reassessed. The question then remains whether the remaining lots in this local improvement district can be reassessed for the amount of appellant's bonds.
While it is true that the total assessment, together with the cash paid, equaled the total cost of the improvement, or $5,000, as asserted by respondents, it evidently did not equal the total actual cost and expense of the improvement together with accrued interest thereon as provided by section 7892-43 supra. Had the assessments so been provided for the payment of the bonds, first maturing in the local improvement district, or those numbered from 1 to 32, inclusive, could not have exhausted the fund.
The statute relating to such local improvement districts, section 9407, Rem. Comp. Stat., does provide that the bonds shall be called in and paid in their numerical order, and another section (9400) relating to the assessments provides that: *642
'Such bonds shall not be issued in any amount in excess of the cost and expense of the improvement.'
But it is a fact that, regardless of the loss of the $499.13 with interest on the four lots seized by the county and sold for general taxes, there was a deficit in the amount assessed on the property which would be required to satisfy the amount of the bonds and interest on the total cost of the improvement. There was some $56.15 paid by some of the owners of the four lots sold by the county, as interest, to be deducted from the total accumulation of interest amounting as stated to $349.49, leaving a balance of interest accumulating on the property of $239.24 for the ten-year period. This, added to the principal which they failed to pay, would total $792.37. This, deducted from the face of the bonds held by appellant, leaves a balance of $107.63 principal.
* * * * * * * *
We conclude that the only relief appellant can now have is that the remaining property in the district, exclusive of the four lots in question, must be reassessed by the city for the payment of the deficit of $107.63, with interest from the date of the maturity of appellant's bonds."
not in State v. City of Vancouver,
In Reynard v. City of Caldwell,
Respondent's second cause of action is to recover unpaid and uncollected interest amounting to $3220.20. The city clerk, after the negotiation of the bonds, set up gratuitously what was called an installment or deferred assessment roll. There was no provision in the statute or ordinances for the same; and the clerk computed the interest which should be collected to amount to $5125.74, whereas the proper amount should have been $8345.94. While the city council in ordinance No. 1502 provided for levies to be made during the ten year life of the bonds, no annual levies were made by the council as required by statute. The clerk merely sent out notices based upon her estimates as above indicated. Appellant's counsel asked what more could have been done if the council instead of the clerk had made the annual levies. While not necessarily material who made the levy, since the deficiency is because not enough was levied, if the council had made the levies required by law, they might have discovered the mistake sooner and thus uncovered the clerk's embezzlement of funds from this district and thus perhaps have avoided enforced contribution by the city of $2585.81 from some source, occasioned by the clerk's defalcation. The loan, if we may euphemistically call it that, which the clerk surreptitiously abstracted from the Treasurer's Investment Fund, to this district of $969.93, was illegal and jeopardized the city and the general taxpayer. (Wheeler v. Cityof Blackfoot, supra.) The imposition of the amount of interest sought by respondent is clearly *644
justified under section 49-2721 as construed in Veatch v. Cityof Moscow, supra. See also McDonald v. Pritzl,
Respondent having a clear, legal right to the relief sought, mandamus is the proper remedy. (McDonald v. Pritzl, supra;Smith v. Boise City, Idaho,
The judgment is affirmed. Costs awarded to respondent.
Budge, Morgan, Holden, and Ailshie, JJ., concur.
If payment be made on or before the 1st day of October, 1926, no penalty interest or cost will be collected. If payment be made after the 1st day of October, 1926, the owner may redeem his property from such liability by paying all the installments of the assessment with interest at the rate of not to exceed 7 per cent (7%) per annum from the date of the issuance of said bonds, hereafter to be authorized by ordinance to the time of the maturity of last installment of said bonds." (Plaintiff's Exhibit 6, p. 80.)