Kelly v. City of Sunnyside

• Decision Date: 02 May 1932
• Docket Number: 23438.
• Parties: KELLY v. CITY OF SUNNYSIDE et al.
• Court: Washington Supreme Court

11 P.2d 230

168 Wash. 95

KELLY v. CITY OF SUNNYSIDE et al.

No. 23438.

Supreme Court of Washington

May 2, 1932

Department 2.

Appeal from Superior Court, Yakima County; A. W. Hawkins, Judge.

Action by R. S. Kelly against the City of Sunnyside and another. From an adverse judgment, defendants appeal.

Affirmed.

Wm. B Bridgman, of Sunnyside, for appellants.

Roberts & Roberts and Walter V. Swanson, all of Yakima, for respondent.

Geo. O Beardslee, of Prosser, and Tanner & Garvin, of Seattle, amici curiae.

MAIN J.

The plaintiff, the owner of local improvement guaranty fund bonds issued by the defendant city, brought this action for recovery upon the bonds and to require the city to levy a tax for the benefit of the guaranty fund, as provided for in chapter 141, p. 454, Laws of 1923. The cause was tried to the court without a jury, and resulted in a judgment upon the bonds and a direction that the tax be levied, from which the defendants appeal.

Section 1 of the act referred to provides that every city and town may immediately create a fund for the purpose of guaranteeing, to the extent of such fund and in the manner 'hereinafter provided, the payments of its local improvement bonds issued subsequent to the effective date of this act. * * *' Section 2 provides that the local improvement guaranty fund shall at no time 'exceed a sum equal to five per cent of the outstanding bond obligations thereby guaranteed.' Section 3 provides that after the creation of the guaranty fund, the city or town 'shall levy, from time to time as other taxes are levied, such sums as may be needed to meet the financial requirements of the fund. * * *' Section 6 of article 8 of the Constitution of this state provides that no city shall for any purpose 'become indebted in any manner to an amount exceeding one and one-half per centum of the taxable property in such * * * city * * * without the assent of three-fifths of the voters therein voting at an election to be held for that purpose. * * *' The appellant city was indebted, above legal offsets, more than one and one-half per cent. of the actual value of the taxable property therein, and there has been no vote of the people for a larger indebtedness.

The principal question, as stated in the appellants' brief is whether the local improvement guaranty fund law is limited in its application by the constitutional provision mentioned. In other words, the question is whether the provision of the local improvement guaranty fund law requiring the levy of a tax for the benefit of the fund creates a debt within the meaning of the constitutional provision quoted. The appellants recognize that in the cases of Comfort v. Tacoma, 142 Wash. 249, 252 P. 929, 930, and Hallahan v. Port Angeles, 161 Wash. 353, 297 P. 149, this court has sustained the constitutionality of the law, but say that in neither of the cases was the precise question here presented Before this court. But...