Hauge v. City of Des Moines, 38562.

• Decision Date: 02 April 1929
• Docket Number: No. 38562.,38562.
• Citation: 224 N.W. 520,207 Iowa 1209
• Parties: HAUGE v. CITY OF DES MOINES.
• Court: Iowa Supreme Court

207 Iowa 1209

224 N.W. 520

HAUGE

v.CITY OF DES MOINES.

No. 38562.

Supreme Court of Iowa.

April 2, 1929.

Appeal from District Court, Polk County; Lester L. Thompson, Judge.

An action against a city to recover an amount represented by unpaid bonds for public improvements. The opinion in this case heretofore filed, and appearing in 216 N. W. 689, is hereby withdrawn. Affirmed.Reson S. Jones, Eskil Carlson, Chauncey A. Weaver, Don G. Allen, and George W. Vest, all of Des Moines, for appellant.

Stewart & Hextell, of Des Moines, for appellee.

ALBERT, C. J.

The petition is in four counts, and as they represent different situations, they will be treated separately.

The first count deals with a paving improvement upon the completion and acceptance of which the city of Des Moines issued the following bond as a part of a series of 43 bonds, in form as follows:

The City of Des Moines, in the State of Iowa, promises to pay as hereinafter stated, to the bearer hereof on the 1st day of April, 1924, or at any time before that date at the option of the City of Des Moines, the sum of $100.00, with interest thereon from the 29th day of December, 1916, at the rate of six per cent. per annum, payable annually on the presentation and surrender of the interest coupons hereto attached. Both principal and interest of this bond are payable at the office of the city treasurer in the City of Des Moines, State of Iowa.

“This bond is issued by the City of Des Moines under and by virtue of Chapter 8 of Title V of the Code of Iowa, and the resolution of said City duly passed on the 16th day of February, 1916.

This bond is one of a series of bonds of like tenor, date and amount, numbered from 1 to 43, inclusive, and issued for the purpose of defraying the cost of improving by paving a portion of the following named streets, towit: Jefferson, Cherokee and Washington Avenues and E. 8th Street, as described in said resolution of said City, which cost is payable by the abutting and adjacent property along said improvements, as provided by law, and is made by law a lien on all of said abutting and adjacent property and payable in seven annual installments, with interest on all deferred payments at the rate of six per cent. per annum, and this bond is payable only out of the special fund created by the collection of said special tax, when collected, and said fund can be used for no other purpose.

And it is hereby certified and recited that all acts, conditions and things required to be done precedent to and in the issuing of this series of bonds have been done, happened and performed in regular and due form as required by law and resolution; and for the assessment, collection and payment hereon of said special tax, the full faith and diligence of said City of Des Moines are irrevocably pledged.”

The bond involved is No. 43, in amount of $100, and is the last of the series. The allegation of this count is that the assessment produced, together with interest, is not sufficient to pay the principal and interest when due, and that the city failed to levy an assessment sufficient to produce the necessary revenue to meet the costs of the improvement and the bonds issued therefor, together with interest thereon. The allegation further states that bonds up to No. 38 inclusive have been paid in full. Judgment is asked in the sum of $109.50, together with interest at 6 per cent. from January 1, 1927.

To this count the city filed answer which, in effect, is a confession and avoidance. It says that the shortage in revenue, produced to take care of the bond referred to, is due not to any fact or act on the part of the city of Des Moines, or to any and all the acts, conditions, and things required to be done precedent to the issuance of the series of bonds in regular and due form as required by law; that the shortgage is not due to any failure of the city of Des Moines to have exercised its full faith and diligence in the assessment, collection, and payment of the special taxes referred to in the bond; that the city did each and all of the things, acts, conditions, and things required to be done precedent to and in the issuing of said series of bonds, and all things had been done, happened, and performed in regular and due form as required by law; and that said shortage is due to the fact that the county treasurer of Polk county collects interest on the assessments as required and as provided by law, on assessments paid in the month of March of said year interest only to said month, and only pays this amount to the city treasurer, and that the county treasurer cannot pay the amount collected in the month of March of any one year until about or after the 15th of May following; that it is physically impracticable to make payments until about said last-named date of each year, and, by reason thereof, two months' interest, or 1 per cent. of all assessments due in the year, is uncollected, and must be paid by the city of Des Moines, and can only be paid when the special fund created for the collection of said special taxes and the accumulation of such deficiency must rest upon the last bond or bonds of the series, and the amount of shrinkage is in excess of the total amount of the said bond, together with interest accrued thereon.

To this answer, plaintiff demurred. One of the points made in the demurrer is that the answer of the defendant shows on its face that the city did not provide a sufficient fund with which to pay the bond in question, as it was its duty to do. The total of the answer made by the city is twofold: (1) That the county treasurer did not collect the interest on the taxes for the month of March; and (2) that the county treasurer did not turn the money over to the city until the 15th of May because of his inability, due to the large amount of work, to get the money to the city before that date. This gives rise to the questionof the relation between the city and the county treasurer.

[1][2] It is evident on the face of the statutes that the county treasurer is merely an agency for the city for the purpose of collecting these taxes. The duty so to do is conferred upon him by statute, to the end that taxes of all kinds and descriptions that may be assessed against a given piece of property may be paid at one place. He must be looked upon, therefore, as an agent of the city for the specific purpose of receiving and collecting these taxes. How can the city, therefore, be heard to say that, because of the neglect or failure of one of its agencies in getting this money to it by the time the bond and interest are due, to wit, April 1st of each year, it has fully complied with the recitals of the bond? Again, under the answer of the defendant herein pleaded, it at all times knew of the condition that existed, and, having knowledge of such facts, it was bound to anticipate the very thing that did happen, and should have protected the bondholders against the same. Having failed so to do, it breached the recital of this bond, and the matter pleaded by way of answer of the city is not a defense to the matters pleaded by the plaintiff, and the demurrer of the plaintiff was properly sustained.

[3] The second count also involves a paving improvement and a series of 60 bonds...