Logan City v. Allen

• Decision Date: 09 May 1935
• Docket Number: 5530
• Citation: 86 Utah 375,44 P.2d 1085
• Court: Utah Supreme Court
• Parties: LOGAN CITY v. ALLEN et al

44 P.2d 1085

86 Utah 375

LOGAN CITY v. ALLEN et al

No. 5530

Supreme Court of Utah

May 9, 1935

Appeal from District Court, First District, Cache County, Melvin C Harris, Judge.

Action by Logan City, a municipal corporation, against L. H. Allen and others. From a judgment of dismissal, the plaintiff appeals.

AFFIRMED.

Leon Fonnesbeck, of Logan, for appellant.

Joseph Chez, Atty. Gen., Budge & Parker, of Salt Lake City, and Newell G. Daines, of Logan, for respondents.

FOLLAND Justice. ELIAS HANSEN, C. J., and EPHRAIM HANSON, MOFFAT, and WOLFE, JJ., concur.

OPINION

FOLLAND, Justice.

By its complaint the plaintiff Logan City seeks personal judgment against three groups of persons, in different sums, on account of taxes levied and assessed against the property of the William Budge Memorial Hospital in Logan City, for the years 1929, 1930, and 1931, having been reduced in amount by the board of county commissioners of Cache county and the State Tax Commission. The defendants are respectively members of the board of county commissioners of Cache county, members of the State Tax Commission, and bondsmen in certain suits commenced by the hospital corporation against the treasurer of Cache county wherein sale for delinquent taxes of the hospital property was enjoined for the years 1929 and 1930. From a judgment of dismissal, after sustaining the several demurrers of defendants to the complaint, plaintiff appeals and assigns errors.

The hospital property was assessed and taxes levied for the years 1929, 1930, and 1931. A suit was then pending in the courts involving the question of whether the levy and assessment of taxes against the same hospital property for the year 1928 was valid, it being claimed by the hospital corporation that it was a charitable institution and that its property was exempt from taxation. This suit was determined adversely to the hospital's contention by a decision of the Supreme Court in October of 1931. William Budge Memorial Hospital v. Maughan, 79 Utah 516, 3 P.2d 258, 13 P.2d 1119. Similar separate suits were commenced in the district court of Cache county to determine the validity of the tax for the years 1929 and 1930, and in each of such suits temporary injunctions were issued restraining the county treasurer from selling the property of collecting the tax. In each case a bond in the sum of $ 2,500 was executed and filed as a basis for the injunction; the bondsmen in one case being the defendants D. C. Budge and J. W. Hayward, and in the other case the defendants D. C. Budge and T. B. Budge. The tax was levied and assessed against the hospital property for the year 1931. There is no allegation of any suit filed or injunction issued to restrain the sale of the property for the tax of that year. The complaint, however, alleges that no sale was made of the property or any part thereof for delinquent taxes for either of the years 1929, 1930, or 1931. In January of 1928 the stockholders of the William Budge Memorial Hospital, at a meeting held January 31st, amended the articles of incorporation in an attempt to classify the hospital corporation as a charitable organization. This court, in the case referred to, had expressly declined to pass on the legal effect of this amendment because the 1928 tax had attached before the adoption of the amendment. After the decision of this court became final, the hospital corporation dismissed its two cases pending in the district court, thereby releasing the restraining orders theretofore issued. It then made an offer to the board of county commissioners of Cache county to settle its delinquent taxes for the years 1929, 1930, and 1931 on the basis of the assessed value of its property as assessed for the 1932 tax. This offer was accepted by the board of the county commissioners and by such board referred to the State Tax Commission for approval. The State Tax Commission, after giving full consideration to the matter, wrote a decision affirming such settlement. It based its decision on the fact that the question of the legal effect of the amendment to the articles of incorporation had not been definitely decided by the courts, and while holding to the view that the amendment gave the corporation the character of a charitable organization, recognized that the question was not free from doubt and would require further litigation to settle the controversy. The commission concluded that it would be for the best interest of the state and county to approve the offer and accept payment of the taxes without interest, penalties, or costs on the basis proposed. The corporation then paid all of its delinquent taxes as reduced and received the treasurer's receipt therefor. The taxes thus compromised and paid included not only state and county taxes, but the taxes levied by Logan City which amounted to 37.37 per cent of the whole. By such settlement Logan City alleges it has been deprived of payment of its proportion of the difference between the total amount of taxes, interest, costs, and penalties, and the sum for which settlement was made. This suit is for such balance. Logan City refused to recognize the compromise settlement as valid.

This action is two fold. Judgment is sought against D. C. Budge, T. B. Budge, and J. W. Hayward as sureties on the bonds in the injunction suits on the theory that such bondsmen guaranteed payment of the taxes in the event of dismissal of the case or a final judgment upholding the tax as valid. This cause of action is based on the contract obligation of such defendants. The defendants L. H. Allen, W. W. Hall, and Thomas Muir were county commissioners of Cache county at the time settlement was made. George A. Critchlow, H. P. Leatham, and R. E. Hammond were members of the State Tax Commission at the time. The action proceeds against the county and state officials on the theory they had wrongfully and unlawfully compromised and settled the taxes levied against the hospital property.

We first consider the demurrer of the defendants Budge, Hayward, and Budge, bondsmen in the injunction suits. The demurrer was properly sustained because it is not made to appear by any allegations of the complaint that any loss suffered by plaintiff was caused by or was the result of the issuance and pendency of the restraining orders. These bondsmen did not "guarantee payment of the tax" as argued by appellant, but merely agreed "to pay all damages not exceeding said sum of $ 2,500 which the County Treasurer, as collector of taxes, may sustain by reason of said restraining order." The restraining orders prevented the county treasurer from making sale of the property for the taxes of 1929 and 1930 until after dismissal of such action and discharge of the restraining orders. The delay was not the cause of any damage or loss to Logan City. The county treasurer had not been deprived of authority to proceed and collect the full amount of the tax, penalties, accrued interest, and costs. It is not suggested, and we do not see how it well could be, that by reason of such delay the county treasurer had lost his power to enforce collection of the delinquent tax. Neither is it alleged that the taxed property had in the interim become of less value than the total amount of taxes, interest, penalties, and costs. On the other hand, the complaint sets forth the reason why the full amount of these tax claims was not paid; that is, the board of county commissioners, with the approval of the State Tax Commission, compromised the claims and accepted as full payment a sum less than the total amount. It is unnecessary to pass on the objections that there was a misjoinder of parties defendant, and that plaintiff had no legal capacity to sue because not an obligee on the bonds.

The demurrers of the other defendants, filed separately for the members of the county board and for members of the state board, rest on the same grounds. Appellant contends the board and commission were without authority to make any reduction in the tax levied for the years mentioned, and that the action of such officers being in excess of authority, and Logan City having suffered loss by reason of such unlawful action, it may recover a personal judgment for the amount of such loss against the individual officers. The defendants assert that the board and commission acted within statutory authority; that the power and authority conferred on them by law is in character discretionary and quasi judicial; that their action being within discretion, even if erroneous, it imposed no personal liability unless actuated by bad faith, fraud, or collusion; that the complaint, failing to charge bad faith, collusion, or fraud, does not state a cause of action.

The general rule is well stated in 46 C. J. 1043, where, referring to the immunity of judges to civil liability for acts within the limits of their jurisdiction, it is said the rule also applies "to officers exercising quasi-Judicial powers, whose discharge involves the exercise of judgment and discretion," and that such officers are not liable for error or mistake of judgment in the exercise thereof in the absence of corrupt or malicious motives. The rule is stated in 22 R. C. L. 485, as follows:

"Where an officer is invested with discretion and is empowered to exercise his judgment in matters brought before him he is sometimes called a quasi judicial officer, and when so acting he is usually given immunity from liability to persons who may be injured as the result of an erroneous decision, provided the acts complained of are done within the scope of the officer's authority, and without willfulness, malice, or corruption. This immunity from civil liability for a mistake in judgment extends to errors in the determination both of law, and of fact."

The...