Village of Bayside v. Town of Milwaukee

• Decision Date: 05 October 1954
• Citation: 267 Wis. 448,66 N.W.2d 129
• Parties: VILLAGE OF BAYSIDE, Respondent, v. TOWN OF MILWAUKEE, Appellant. In re ADJUSTMENT OF ASSETS AND LIABILITIES BETWEEN THE TOWN OF MILWAUKEE, etc.
• Court: Wisconsin Supreme Court

Page 129

66 N.W.2d 129

267 Wis. 448

VILLAGE OF BAYSIDE, Respondent, v. TOWN OF MILWAUKEE, Appellant In re ADJUSTMENT OF ASSETS AND LIABILITIES BETWEEN THE TOWN OF MILWAUKEE, etc.

Supreme Court of Wisconsin.

Oct. 5, 1954.

Wickert & Fuhrman, Milwaukee, for appellant.

Suel O. Arnold, Milwaukee, for respondent.

CURRIE, Justice.

The following issues are raised on this appeal:

(1) Were the moneys in the Rubbish Removal Fund and the Utility District No. 2 Fund apportionable assets under sec. 66.03, Stats.?

(2) Did the trial court err in holding that the proceeds of state income taxes, telephone company taxes, motor vehicle registration fees, and liquor taxes not yet received by the state treasurer as of February 13, 1953 (the date of incorporation of the village) but later distributed to the town were apportionable assets under sec. 66.03, Stats.?

(3) If such proceeds of state taxes later distributed to the town in 1953 which had not been received by the state treasurer on February 13, 1953 were apportionable assets, are not a portion of the proceeds of such taxes distributable by the state to the village of Bayside during the year 1954, attributable to 1953, also apportionable assets in which the town of Milwaukee is entitled to share inasmuch as the village was not incorporated during the first forty-four days of 1953?

(4) Inasmuch as the town is required to distribute to the village a proportion of the proceeds of state taxes received by it subsequent to February 13, 1953, should not the order appealed from have made provision for liabilities of the town incurred prior to February 13, 1953, but first ascertainable subsequent to the proceedings in the trial court but prior to the last distribution of proceeds of state taxes required to be made by one of said two municipalities to the other under the apportionment order?

(5) Did the order appealed from fail to make proper provision for first deducting the percentage of the distributable state liquor taxes received by the town, which the town was under contract to pay over to the city of Glendale, before apportioning the balance thereof?

(6) Was it an abuse of discretion for the trial court to have refused to interplead the city of Glendale?

The portions of sec. 66.03, Stats., entitled 'Adjustment of assets and liabilities on division of territory' material to this appeal are as follows:

'(2) Basis. Except as otherwise provided in this section when territory is transferred, in any manner provided by law, from one municipality to another, there shall be assigned to such other municipality such proportion of the assets and liabilities of the first municipality as the assessed valuation of all taxable property in the territory transferred bears to the assessed valuation of all the taxable property of the entire municipality from which said territory is taken according to the last assessment roll of such municipality. * * *

'(5) Apportionment Board. The boards or councils of the municipalities, or committees, thereof selected for that purpose, acting together, shall constitute an apportionment board. * * *

'(7) Adjustment, How Made. The apportionment board shall determine, except in the case of public utilities, such assets and liabilities from the best information obtainable and shall assign to the municipality to which the territory is transferred its proper proportion thereof by assigning the excess of liabilities over assets, or by assigning any particular asset or liability to either municipality, or in such other manner as will best meet the requirements of the particular case. * * *

'(8) Appeal to Court. In case the apportionment board is unable to agree, the circuit court of the county in which either municipality is situated, may, upon the petition of either municipality, make the adjustment of assets and liabilities pursuant to provisions of this section.'

In considering the first of the foregoing listed issues it is also necessary to examine the statutes under which the Rubbish Removal District and Utility District No. 2 were created.

Sec. 66.049, Stats. authorizes cities and villages to create districts for the removal of ashes, garbage, and rubbish, and to defray the cost of such removal by special assessment against the property served, by general tax upon the property of the district, or by general tax upon the property of the city or village. Under the provisions of sec. 60.29(30), Stats., a town board, if authorized by resolution at the town meeting, would have the power to create such a rubbish removal district in a town. No question has been raised but that the rubbish removal district with which we are concerned in this proceeding was validly created by the town board. The testimony is also undisputed that the owners of the property in the rubbish removal district had been assessed for the garbage collection services rendered by the town in the district so that the moneys in the rubbish removal fund had not been obtained by a general tax levied on all the property of the town but only on that of the district. As stated in paragraph 3 b. of the trial court's order, 90 per cent of the boundaries of the rubbish removal district lie within the village of Bayside.

Sec. 66.072, Stats. authorizes towns to establish utility districts for providing highways, sewers, sidewalks, street lighting, and water for fire protection, or any of such services within the district, payable out of a fund provided by taxation of the property in such district. The trial court by its order found that the boundaries of Utility District No. 2 of Milwaukee are coterminous with the boundaries of the town.

The memorandum opinion filed by the learned trial judge makes it clear that he based his decision, that the moneys in the Rubbish Removal Fund and Utility District No. 2 Fund constituted apportionable assets of the town, on the ground that the town board under the procedure outlined in sec. 65.90(5)(a), Stats., could have diverted such moneys to any other general town purpose, and cited the decision of this court in Village of Milton Junction v. Milton, 1953, 263 Wis. 367, 57 N.W.2d 186, as authority therefor. We cannot agree with this conclusion. In the Milton Junction Case we were confronted with a situation where the town of Milton had taken town funds raised by general taxation and appropriated and set them aside for the purpose of constructing a community building fund. In the instant case the moneys in the Rubbish Removal Fund and Utility District No. 2 Fund had been raised by special taxes levied upon property in the districts. We are of the opinion that these two special funds constituted trust funds which could not be diverted to any other purpose by the town board acting under sec. 65.90(5)(a). We construed sec. 65.90(5)(a) as only applicable to the general funds of a municipality, and that the governing body of the municipality has no power to divert to other uses moneys impressed with a trust, such as those of the Rubbish Removal Fund and the Utility District No. 2 Fund.

In Hohl v. Town of Westford, 1873, 33 Wis. 323, it was held that money belonging to a drainage fund of a town paid to the town treasurer continues to be in the town treasury in contemplation of law even though the town supervisors without legal authority had illegally diverted such fund to another purpose. The legal effect of the trial court's order with respect to the Rubbish Removal Fund and the Utility District No. 2 Fund is to divert approximately 36 per cent of the moneys in such two special funds into the general treasury of the village of Bayside with the power in the village board to divert the same to any general village purpose such board in its discretion might deem advisable, thus destroying the trust with which such funds are impressed. The case of Town of Montpelier v. Town of East Montpelier, 1855, 27 Vt. 704, 1 Williams 704, is authority for the principle that, where an additional town is carved out of an existing town, a statute providing for apportionment of assets does not apply to funds held by the original town in trust for a special purpose.

The legislature might well make provision with respect to the disposition of special funds created under secs. 66.049 and 66.072, Stats., collected by special taxes levied on property lying within districts established pursuant to those sections in the case of annexation of such property to another municipality, or the carving out of a new municipality lying wholly or partially within the...