Scott v. Salt Lake County

• Citation: 58 Utah 25,196 P. 1022
• Decision Date: 30 March 1921
• Docket Number: 3632
• Court: Supreme Court of Utah
• Parties: SCOTT County Auditor, v. SALT LAKE COUNTY et al

196 P. 1022

58 Utah 25

SCOTT County Auditor, v. SALT LAKE COUNTY et al

No. 3632

Supreme Court of Utah

March 30, 1921

Application by M. L. Scott, Auditor of Salt Lake County, for writ of prohibition against Salt Lake County and others.

PERMANENT WRIT OF PROHIBITION DENIED.

Morgan & Huffaker, of Salt Lake City, for plaintiff.

A. E Moreton, Co. Atty., and Geo. G. Armstrong, Asst. Co. Atty both of Salt Lake City, for defendants.

WEBER, J. CORFMAN, C. J., and GIDEON, THURMAN, and FRICK, JJ., concur.

OPINION

WEBER, J.

M. L. Scott, county auditor of Salt Lake county, brings this proceeding to permanently prohibit Salt Lake county and its board of county commissioners from making, issuing, and delivering its promissory notes in the sum of $ 345,000 in renewal of notes given by Salt Lake county during the year 1920 to the Continental National Bank of Salt Lake City for money borrowed during 1920 by the county to pay lawful debts. It is also sought to prohibit the county commissioners from levying a tax for the purpose of paying the promissory notes when due.

Plaintiff has furnished a financial statement of the county for 1920 which shows that the expenses for that year exceeded the revenue, and that the county exceeded its constitutional debt limit during 1920. In their answer defendants allege that after the said financial statement was issued by the county auditor a further and more complete examination was made of the records and books of the county, and, instead of exceeding the revenue for 1920, there was an unexpended revenue at the end of that year of $ 51,917.53. Defendants furnish a verified statement that comprises the entire revenue for Salt Lake county for 1920, including an item of $ 65,951.82 still uncollected. To this answer the plaintiff has interposed a general demurrer.

Plaintiff contends that, as shown by the answer: (1) The county has exceeded its debt limit for 1920; (2) that the debts incurred by the county must be paid by the revenues for the year during which the debts were incurred or contracted; (3) that an act of the Legislature of 1921 hereinafter set out is unconstitutional.

Section 3 of article 14 of the state Constitution reads as follows:

"No debt in excess of the taxes for the current year shall be created by any county or subdivision thereof, or by any school district therein, or by any city, town or village, or any subdivision thereof in this state; unless the proposition to create such debt, shall have been submitted to a vote of such qualified electors as shall have paid a property tax therein, in the year preceding such election, and a majority of those voting thereon shall have voted in favor of incurring such debt."

That the word "taxes" in the above-quoted provision of the Constitution means all revenue, including that which is uncollected, is no longer a debatable question in this state. In Muir v. Murray City, 55 Utah 368, 186 P. 433, it is said:

"Notwithstanding the section of the Constitution above quoted uses the word 'taxes' instead of the word 'revenue,' we are inclined to the view that the word 'revenue' conveys the meaning intended. It is hardly possible to conceive that the members of the constitutional convention intended anything other than that the city, in creating an indebtedness without submitting it to the electorate, should keep within the revenue of the current year. Many reasons exist in favor of such an interpretation, and, so far as we can see, there are none against it."

In Dickinson v. Salt Lake City, 57 Utah 530, 195 P. 1110, it is said:

"Taxes levied and collected in any fiscal year should be (and usually are all) used in paying the running expenses of such fiscal year. As no taxes are due until the third Monday in September, there must, of necessity, be a period of some 8 1/2 months of the fiscal year when none of the general taxes of that year are available for use in paying the running expenses of the municipality. Either, therefore, the city officers must see to it that sufficient funds are carried over from the preceding year to pay the running expenses of the city for the first 8 1/2 months or the city must borrow the necessary money to pay such expenses or attempt to run the city without funds. In other words, debts in some form must be incurred on the anticipated revenues to be later collected. In our judgment, the opinion of this court in the recent case of Muir v. Murray City (Utah), 55 Utah 368, 186 P. 433, is decisive of the question presented. True, in that case it does not appear from the opinion that the indebtedness was in but it does appear from the record on appeal that the indebtedness was incurred in the month of March. The city was held liable, as it did not appear that the debt was in excess of the revenues of that year. Bearing on that particular question, this court said: "The contention of the city that it had no power to create the debt in question on the ground that it exceeded the limit fixed by the constitutional provision quoted should not prevail in the absence of proof that the debt was in excess of the potential revenues of the current year from whatever source the revenue was legitimately obtainable. Having failed to make such proof, its contention in this regard is without merit.' The statute seems to give the commissioners power to issue evidence of...