Lucas v. City of Nampa

• Decision Date: 23 June 1925
• Citation: Lucas v. City of Nampa, 41 Idaho 35, 238 P. 288 (Idaho 1925)
• Parties: GEORGE N. LUCAS, Who Sues on Behalf of Himself and All Others Similarly Interested, Respondent, v. CITY OF NAMPA, a Municipal Corporation and a City of the Second Class; D. W. MOFFATT, as Clerk of Said City; GERTRUDE M. MILLER, as City Treasurer of Said City, Appellants
• Court: Idaho Supreme Court

238 P. 288

41 Idaho 35

GEORGE N. LUCAS, Who Sues on Behalf of Himself and All Others Similarly Interested, Respondent, v. CITY OF NAMPA, a Municipal Corporation and a City of the Second Class; D. W. MOFFATT, as Clerk of Said City; GERTRUDE M. MILLER, as City Treasurer of Said City, Appellants

Supreme Court of Idaho

June 23, 1925

MUNICIPAL CORPORATION-SEWER CONSTRUCTION-ESTIMATE OF CITY ENGINEER-SUIT BY TAXPAYER-PARTIES-BONDS-COMMISSION FOR SALE OF.

1. A city council in the construction of a sewer system is limited and bound by the estimate of the city engineer authorized by C. S., sec. 3879.

2. A suit by a taxpayer to restrain the levy of an assessment for the construction of a sewer system, if filed within thirty days after the confirmation of the final assessment is by C S., sec. 4137, in time.

3. When, pending an action to restrain the levy of assessments of issuance of bonds to pay for a contract for a sewer improvement district, such bonds are sold by the city authorities, defendants in said action, the purchasing bondholders are not necessary parties to authorize the rendition of judgment in such case permanently restraining the city from collecting assessments to pay said bonds.

4. City or municipal corporation has no authority to pay a commission for the negotiation of the sale of bonds issued by the city for a special improvement sewer district.

APPEAL from the District Court of the Seventh Judicial District, for Canyon County. Hon. Ed. L. Bryan, Judge.

Action to restrain the collection of assessments. Judgment for plaintiff. Affirmed.

Judgment of the trial court affirmed. Costs awarded to respondent.

D. L Rhodes and Karl Paine, for Appellants.

No bondholder is a party to the action. The decree, however enjoins the collection of assessments to pay the principal and interest of $ 39,000 outstanding bonds of the district and thereby deprives the bondholders of their property without due process of law, contrary to the fourteenth amendment to the federal constitution, and sec. 13, art. 1 of the constitution of Idaho. (Bear Lake County v. Budge, 9 Idaho 703, 108 Am. St. 179, 75 P. 614.)

Equity requires as to parties defendant that all persons whose interest would be affected by the decree sought to be obtained must be made parties, and if any such persons are not or cannot be reached by process the bill must be dismissed. (Grater, etc., v. Logan County High School Dist., 64 Colo. 600, 173 P. 714; High on Injunctions, 4th ed., secs. 557, 576; Beck v. Allen, 58 Miss. 143; City of Anthony v. State, 49 Kan. 246, 30 P. 488; Pana v. Bowler, 107 U.S. 529, 2 S.Ct. 704, 27 L.Ed. 424; Brooklyn v. Aetna Life Ins. Co., 9 Otto, 362, 25 L.Ed. 416; Township of Empire v. Darlington, 11 Otto, 87, 25 L.Ed. 878; Savage v. Sternberg, 19 Wash. 679, 54 P. 611; Carpenter v. Hindman, 32 Kan. 601, 5 P. 165; T. V. Board v. Texas & Pacific R. W. Co., 46 Tex. 316; Dwyer v. Hackworth, 57 Tex. 245; Bradford v. Westbrook, 39 Tex. Civ. App. 638, 88 S.W. 382; Buie v. Cunningham (Tex. Civ. App.), 29 S.W. 801; Stallcup v. Tacoma, 13 Wash. 141, 42 P. 541; Hope v. Mayor, 72 Ga. 246; Ramsey v. Town of Marble Rock, 123 Iowa 7, 98 N.W. 134; Graham v. Minneapolis, 40 Minn. 436, 42 N.W. 291; Osterhoudt v. County of Ulster, 98 N.Y. 239; Hoppock v. Chambers, 96 Mich. 509, 56 N.W. 86; State v. Gormley, 40 Wash. 601, 82 P. 929, 3 L. R. A., N. S., 256; Mallow v. Hinde, 12 Wheat. (U.S.) 193, 6 L.Ed. 599; California v. Southern Pacific, 157 U.S. 229, 15 S.Ct. 591, 39 L.Ed. 683; Shields v. Barrow, 58 U.S. 130, 15 L.Ed. 158; Ribon v. Chicago, Rock I. Ry. Co., 83 U.S. 446, 21 L.Ed. 367; New Orleans Waterworks Co. v. City of New Orleans, 164 U.S. 471, 17 S.Ct. 161, 41 L.Ed. 518; Amsbary v. City of Twin Falls, 34 Idaho 313, 200 P. 723.)

Two special methods are provided by statute for the construction of a sewerage system, either of which is complete in itself and may be followed to the exclusion of general statutory provisions. (C. S., secs. 4121-4151, and C. S., secs. 3999-4028; Veatch v. Gibson, 29 Idaho 609, 160 P. 1112; Caldwell v. Mountain Home, 29 Idaho 13, 156 P. 909; Henderson v. City of Enterprise, 202 Ala. 277, 80 So. 115; citing 3 McQuillin on Municipal Corporations, sec. 1186; Edwards v. Auditor General, 161 Mich. 639, 126 N.W. 853; State v. Chariton Drainage Dist. No. 1, 252 Mo. 345, 158 S.W. 633; Lawyer v. Carpenter, 80 Ark. 411, 97 S.W. 662; State v. White, 41 Utah 480, 126 P. 330; Birmingham v. Southern Express Co., 164 Ala. 529, 51 So. 159; Jackson v. Cravens, 238 F. 117; Kelley v. Morton, 179 Mo.App. 296, 166 S.W. 840.)

The decree is not sustained by the evidence in that the evidence does not show that the estimate in Ordinance No. 37 was the only estimate made or published. (Newman v. Warren-Quinlan Asphalt Co., 71 Okla. 284, 177 P. 375; Crawford v. Cassity, 78 Okla. 261, 190 P. 412.)

The decree is directly contrary to the evidence in that there is no evidence whatever that the bonds were sold below par. (State v. Boyles, 34 Idaho 283, 200 P. 125.)

The council had the right to make additional assessments. (C. S., sec. 4121; 2 Page and Jones on Taxation by Assessment, sec. 952; Miller v. City of Glenwood, 188 Iowa 514, 176 N.W. 373; C. S., sec. 4141.)

G. W. Lamson and Buckner & Warren, for Respondent.

A general law duly enacted governing cities and towns, and which limits the powers granted a city, is a limitation of equal force and as imperative in its working as if it were a part of the constitution itself. C. S., sec. 3879, is such a general limitation. (Dunbar v. County Commrs., 5 Idaho 407, 49 P. 409; Cooley, Const. Limitations, 6th ed., 227; Dillion, Municipal Corp., 5th ed., 237, 587; Moss v. Fairbury, 66 Neb. 671, 92 N.W. 721; Whittaker v. Deadwood, 23 S.D. 538, 122 N.W. 590; Van der Creek v. Spokane, 78 Wash. 94, 138 P. 560; Corliss v. Highland Park, 146 Mich. 597, 110 N.W. 45.)

The city council has no authority to make an additional assessment in a sewer district to raise an amount in excess of the estimate of the engineer and in excess of the amount fixed by the ordinance of intention. (Van der Creek v. Spokane, supra; Farr v. West Chicago Park Com., 167 Ill. 355, 46 N.E. 893; Covington v. Schlosser, 141 Ky. 838, 133 S.W. 987; Campbell v. Haven, 211 Mass. 121, 97 N.E. 611; Hapgood v. Seattle, 69 Wash. 497, 125 P. 965; Inner Circle, etc., v. Seattle, 69 Wash. 508, 125 P. 970; West Chicago Park, etc., v. Metropolitan West Side, etc., 182 Ill. 246, 55 N.E. 344; Town of Cicero v. Green, 211 Ill. 241, 71 N.E. 884; Page & Jones, Taxation by Assessment, sec. 954.)

The city council has no authority to levy an assessment to pay a commission which goes to the purchaser of the bonds of the sewer district. (C. S., sec. 4143; State v. Banks, 33 Idaho 765, 198 P. 472; Bay City v. Lumberman's State Bank, 193 Mich. 533, 160 N.W. 425; Peery v. Los Angeles, 187 Cal. 753, 203 P. 992, 19 A. L. R. 1044; City of Lincoln v. Harts, 270 Ill. 646, 110 N.E. 912.)

Those who buy bonds from litigating parties with actual notice of suit in regard thereto are not bona fide purchasers. (Lytle v. Lansing, 147 U.S. 57, 13 S.Ct. 254, 37 L.Ed. 78; County of Scotland v. Wm. Hill, 132 U.S. 107, 10 S.Ct. 26, 33 L.Ed. 261.)

Special improvement bonds of a sewer district are payable out of a special fund and are not negotiable. (New First Nat. Bank v. Weiser, 30 Idaho 15, 166 P. 213; Blackwell v. Coeur d' Alene, 13 Idaho 357, 9 P. 353; Northern Trust Co., v. Wilmette, 220 Ill. 417, 5 Ann. Cas. 193, and note at p. 197, 77 N.E. 169; Bank v. Elgin, 136 Ill.App. 453; 28 Cyc. 611, note 4; 19 R. C. L. 286, note 6; Washington County v. Williams, 111 F. 801, 49 C. C. A. 621; National Bank v. Petterson, 200 Ill. 215, 65 N.E. 687; McQuillin, Municipal Corp., sec. 2269.)

The holders of special improvement bonds are not necessary or proper or indispensable parties to an action to enjoin the levy or collection of the assessment. (Hoffman v. Board of Commrs. of Gallatin County, 18 Mont. 224, 44 P. 973; Hughson v. Crane, 115 Cal. 404, 47 P. 120; Sechrist v. Rialto Irr. Dist., 129 Cal. 640, 62 P. 261; Boskowitz v. Thompson, 144 Cal. 724, 78 P. 290; Modoc County v. Spencer, 103 Cal. 498, 37 P. 483; Leitch v. Wentworth, 71 Ill. 146; Cherokee Nation v. Hitchcock, 187 U.S. 294, 23 S.Ct. 115, 47 L.Ed. 183; Kellogg v. School Dist. No. 10, 13 Okla. 285, 74 P. 110; Edwards v. People, 88 Ill. 340; Carruthers v. City of Astoria, 72 Ore. 505, 143 P. 899, 1106; City of Covington v. Schlosser, 141 Ky. 838, 133 S.W. 987; Mock v. City of Santa Rosa, 126 Cal. 330, 58 P. 828.)

GIVENS, J. William A. Lee, C. J., Wm. E. Lee, Budge and Taylor, JJ., concur.

OPINION

GIVENS, J.

Respondent proceeded in equity against the appellants, the city of Nampa and city officials, to have declared illegal and void a contract for the construction of Local Sewerage District No. 22 of Nampa; to enjoin the issuance of any bonds or the collection of any assessments to pay therefor in excess of $ 118,300, the estimate made by the city engineer. Respondent also urges that the city council had no authority to pay a commission for the negotiation of the sale of its bonds, which it is claimed were sold below par, and that the purchasers of the bonds were not bona fide purchasers and therefore not necessary parties. Appellants contend that C. S., sec. 3879, does not apply to chapter 171 of the C. S., being sections 4121 to 4160, inclusive, under which it is maintained that the improvement district was organized, the bonds issued and the assessments made; that the bonds were not sold below par and that the present holders are necessary parties.

C. S sec. 3879, first appears in the Sess. Laws of 1893, p. 97, sec. 20, of an act to provide for the organization, government and powers of cities and...