Deseret Sav. Bank v. Francis

• Decision Date: 11 August 1923
• Docket Number: 4002
• Citation: Deseret Sav. Bank v. Francis, 62 Utah 85, 217 P. 1114 (Utah 1923)
• Court: Utah Supreme Court
• Parties: DESERET SAV. Bank v. FRANCIS et al., Commissioners of Ogden City

217 P. 1114

62 Utah 85

DESERET SAV. Bank v. FRANCIS et al., Commissioners of Ogden City

No. 4002

Supreme Court of Utah

August 11, 1923

Appeal from District Court, Second District, Weber County; J. N Kimball, Judge.

Actions by the Deseret Savings Bank against Frank Francis and others as commissioners of Ogden City, for a peremptory writ of mandate. Judgment for plaintiff, and defendants appeal.

AFFIRMED.

Wade M Johnson and S. C. Powell, both of Ogden, for appellants.

Van Cott, Riter & Farnsworth, of Salt Lake City, for respondent.

CHERRY, J. WEBER, C. J., and THURMAN, FRICK, JJ., concur. GIDEON, J., dissents.

OPINION

CHERRY, J.

In the year 1920 the commissioners of Ogden City levied special local taxes on certain property in paving district No. 128 east, in Ogden City, to defray the expense of paving a roadway in the district, payable in ten equal annual installments. Thereafter, and under the authority of Comp. Laws Utah 1917, § 746, coupon warrants, drawn on the treasurer of the city and against the fund created by the special tax levy, were issued to the contractor in payment of the cost and expense of the improvement. A number of these warrants were transferred to the plaintiff, who presented them at maturity for payment, and payment was refused for the reason that there was no money available in the fund created by the special tax levy of the district against which the warrants were drawn. Plaintiff thereupon demanded that defendants create a special improvement guarantee fund, as provided by chapter 9 Laws Utah 1921, for the purpose of guaranteeing the payment of its warrants and upon defendants' refusal commenced this action in the district court of Weber county for a writ of mandate to require the defendants to comply with its request. Upon a stipulation of facts, the district court issued a peremptory writ of mandate, requiring the defendants to create the special improvement guarantee fund as prayed for, from which judgment the defendants have appealed to this court.

At the time of the issuance of the warrants, the funds available for their payment were limited to the special local taxes levied upon the property in the district, and the liability of the city for the payment of the same was defined by section 748, Comp. Laws Utah 1917, as follows:

"The city or town, as the case may be, shall not be held liable for the payment of any special tax warrant, except to the extent of the funds created and received by special tax levies or assessments; but the city or town shall be held responsible for faithful accounting, collection, settlements, and payments of the moneys of said funds, and when such accounting, collecting, settlements, and paying is faithfully performed, all further liability on the part of the city or town shall cease."

The coupon warrants issued were substantially equal in amount to the special taxes levied, so that, in case of delinquency or nonpayment of any of the taxes, there would be a default in the payment of the warrants to that extent.

After the plaintiff's warrants had been issued, the Legislature passed an act providing for a special improvement guarantee fund (chapter 9, Laws Utah 1921), the first section of which is as follows:

"Any city or town which has issued, or may hereafter issue, any special improvement bonds or warrants, shall by appropriation from the general fund or by the levy of a tax of not to exceed one mill in any one year, or by the issuance of general obligation bonds, or by appropriation from such other sources as may be determined by the board of commissioners, or city council, or board of town trustees, as the case may be, create a fund for the purpose of guaranteeing, to the extent of such fund, the payment of bonds or warrants and interest thereon, issued against local improvement districts for the payment of local improvements therein. Such funds shall be designated as 'Special Improvement Guarantee Fund.'"

The same Legislature, by chapter 16, Laws Utah 1921, amended section 748, Comp. Laws Utah 1917, to read as follows:

"The city or town, as the case may be, shall not be held liable for the payment of any special tax bond or warrant, except to the extent of the funds created and received by special tax levies or assessments and to the extent of the special improvement guarantee fund of such city or town; but the city or town shall be held responsible for the lawful levy of all special taxes or assessments, for the creation and maintenance of the special improvement guarantee fund as provided by law, and for faithful accounting, collection, settlements and payments of the taxes levied for these purposes and the moneys of said funds."

As stated in appellants' brief--

"The question before the court in these proceedings is whether or not the provisions of chapter 9, Laws of Utah 1921, are mandatory in so far as districts created prior to the passage of the act are concerned."

The language of the statute is that--

"Any city * * * which has issued, or may hereafter issue, any special improvement bonds or warrants, shall * * * create a fund for the purpose of guaranteeing * * * the payment of bonds or warrants," etc.

The words of the statute are imperative and mandatory, and while the mere form of a statute does not control in this respect ( Eccles Lbr. Co. v. Martin, 31 Utah 241, 87 P. 713) the presumption is that the words are used in their ordinary sense, and if a different interpretation is sought it must rest upon something in the character of the legislation or in the context which will justify...