New First Nat. Bank of Columbus, Ohio v. City of Weiser

• Decision Date: 22 April 1916
• Citation: 30 Idaho 15,166 P. 213
• Parties: THE NEW FIRST NATIONAL BANK OF COLUMBUS, OHIO, a Corporation, Plaintiff, v. CITY OF WEISER et al., Defendants
• Court: Idaho Supreme Court

166 P. 213

30 Idaho 15

THE NEW FIRST NATIONAL BANK OF COLUMBUS, OHIO, a Corporation, Plaintiff, v. CITY OF WEISER et al., Defendants

Supreme Court of Idaho

April 22, 1916

MANDATE-CITIES AND VILLAGES-STATUTORY CONSTRUCTION-IMPROVEMENT BONDS-LIEN OF BONDHOLDERS-PAYMENT OF INTEREST AND PRINCIPAL-LIABILITY OF LOT OWNERS.

1. Under the provisions of sec. 2238 of the Political Code and amendments thereto, and the other sections of said Political Code defining the powers of cities and villages, improvement districts may be organized and improvement district bonds issued for the payment of improvements, and it is made the duty of the mayor and council to levy special assessments each year sufficient to redeem the instalments of such bonds maturing next after their issue, and the funds arising from such assessments shall be applied solely to the redemption of the principal and interest on said bonds, and such bonds are made liens upon the property of the abutting property owners and if any of such property owners pay their assessments they are entitled to be credited on their account, as shown by the assessment-roll, both for interest and principal, and the city authorities would have no authority under the provisions of said act to divert such money so paid by a property owner to the payment of the interest or principal due from another abutting property owner who failed or neglected to pay his assessments as required by law.

2. When a property owner pays his assessments as provided by said act and the city ordinance, the money arising therefrom must be paid by the city authorities on the interest due on such bonds and on the matured principal, and such property owner is entitled to have his property released from the lien of such bonds to the extent of the payment made, and the money so paid by the property owner cannot be diverted to the payment of the interest or principal due on said bonds from other property owners who fail to pay their assessments.

3. The benefit assessed to each lot or parcel of ground abutting on such improvement is liable for the payment of assessments made against such lot or parcel of ground, and if the city fails or refuses to pay such bonds, or promptly collect any such assess- ments when due, the owner of such bonds may proceed in his own name to collect such assessments and may foreclose any lien thereon in any court of competent jurisdiction, and is authorized to recover in addition to the amount of said bonds and interest, five per centum, together with costs of such suit, including a reasonable sum for attorney's fees.

4. Said statute gives the bondholder a plain, speedy and adequate remedy at law whereby he can proceed to collect from each property owner the amount due from him on such bonds.

5. Under the provisions of subsec. 12, a lien is created against the property of the abutting owner and the bond owner is authorized to receive, sue for and collect any assessments made against such property through any of the methods provided by law for the collection of assessments for local improvements.

6 Subsec. 4 provides among other things, that the holder of any such bonds shall look only to the fund provided by such assessment for the principal and interest of such bond and gives the bondholder a preference over any mortgage or lien against the land of such abutting owner.

7. It was not intended that the bondholder could require a property owner who had paid his assessments as levied under said law to pay assessments for other abutting owners who are delinquent in the payment of their assessments.

8. Said act also provides that the holder of any such bonds shall have no claim for the payment of the same against the city or village except for the collection of the special assessments made for the improvements for which said bonds are issued and the bondholder's remedy in case of nonpayment is confined to the enforcement of such assessments. This provision of said law is especially made a part of each bond.

9. The bondholder has no claim against the city on account of the debt created by such bonds, and is given no right as against a land owner who has paid all of his assessments, and the city authorities have no power or right to divert any portion of the principal or interest paid by such taxpayer to the payment of interest and principal owed by a delinquent taxpayer.

10. The bondholder may proceed in the matter as provided by statute, and can either secure his money from the delinquent taxpayer or obtain title to the property owned by such delinquent, free and clear of all encumbrances.

11. The plaintiff in this case has a plain, speedy and adequate remedy at law for the collection of any principal or interest due from any property owner who has failed to pay any assessments made by the city authorities, and that being true, the peremptory writ of mandate will not issue.

[As to whether a personal liability may be created for an assessment for local improvements, see note in 133 Am.St. 929]

Original proceedings in this court to require the city authorities of the City of Weiser to pay the funds arising from assessments made in a certain improvement district in a certain way. Alternative writ issued and on a hearing such writ quashed and the peremptory writ denied.

Alternative writ quashed and the peremptory writ denied, with costs in favor of the defendants.

C. F. Reddoch, for Plaintiff.

The legislature intended the issuance of negotiable securities, which would permit and allow public improvements. While it is true that the holder of bonds issued under sec. 2238, Rev. Codes, must look to the local improvement fund for the principal and interest represented by his bond, yet there is no doubt but that the legislature intended and contemplated the issuance of a security, which would be marketable and would permit and allow municipal improvements, and if the contention of the city of Weiser and its officials should be sustained, street improvements in the state of Idaho are at an end until the legislature makes some other bonding provision, as a purchaser could not be found for such bonds. (Abbott on Negotiable Securities, sec. 11; Abbott on Public Securities, secs. 101, 117.)

There can be no question but that the legislature intended the interest should be paid as it matured, because if it is only to be paid in partial instalments, no one would buy such a bond. (Veatch v. City of Moscow, 24 Idaho 461, 134 P. 551.)

The plaintiff has a legal right to compel the defendant city and its officials to perform this duty, and the only adequate remedy is by writ of mandate. (Fremont v. Crippen, 10 Cal. 211, 70 Am. Dec. 711; Babcock v. Goodrich, 47 Cal. 488; California Pac. R. Co. v. Central Pac. R. Co., 47 Cal. 528; Raisch v. Board of Education, 81 Cal. 542, 22 P. 890; State v. Murphy, 19 Nev. 89, 6 P. 840; Coos Bay R. etc. Co. v. Wieder, 26 Ore. 453, 38 P. 338; Yearian v. Spiers, 4 Utah 482, 11 P. 618; State v. Kamman, 151 Ind. 407, 51 N.E. 483.)

The only argument which can be made against the issuance of the writ is that plaintiff has an equitable remedy by foreclosing the lien represented by instalments of the assessments maturing each year, and the authorities are uniform that an equitable remedy is not a bar to a proceeding by mandamus. (State v. Sneed, 105 Tenn. 711, 58 S.W. 1070; Roberts, Extraordinary Legal Rem., pp. 23, 25, 107; Merrill on Mandamus, sec. 35.)

J. W. Galloway, City Attorney, and Frank Harris, for Defendants, cite no authorities.

SULLIVAN, C. J. Budge and Morgan, JJ., concur.

OPINION

SULLIVAN, C. J.

This is an original application to this court by the plaintiff for a writ of mandate against the city of Weiser and its officials, commanding said city and its officials to apply the moneys now available in Local Improvement Districts Nos. 6 and 7, as well as all moneys hereafter to be received in said local district funds, or either thereof, first in the payment of interest upon the bonds of said district, and second, after the payment of interest, apply such funds as are available in either of said districts to the redemption of said improvement bonds in their order, beginning with the lowest number.

Upon said application, an alternative writ of mandate was issued and on the return day thereof the defendants demurred to the petition and also interposed a motion to quash.

The facts were not disputed and the question arose over the law applicable to the facts and involves the proper construction of sec. 2238, Rev. Codes, as amended by chap. 81, Laws 1911, p. 266, and especially subds. 11, 12 and 14 of subd. 6 of said section, relating to the issuance, payment of interest upon, and the redemption of bonds issued under the provisions of said section.

It is contended by counsel for plaintiff that a careful analysis of the provisions of said sec. 2238, and especially those provisions relating to the issuance, payment of interest upon and redemption of such bonds, will disclose the fact that to a certain extent they are obscure and uncertain and...