Court Opinion

ID: 6974092
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:07:53.738619+00
Date Added: 2024-06-11T16:08:54.574675
License: Public Domain

Mr. Justice Vickers delivered the opinion of the court: First—By exceptions preserved to the refusal of the court to hold certain propositions of law, appellant has preserved the question of the liability of the city for three items which constitute a part of appellee’s claim. The improvement having been projected by the city as an improvement to be paid for by special assessment, the city is not liable, generally, for any unpaid balance due the contractor. The liability of the city, both under the law and under the contract with appellee, is limited to the amount of the special assessments actually collected for this improvement and which have not been paid over to appellee. (City of Alton v. Foster, 207 Ill. 150.) If the city neglects or refuses to discharge any of the duties required of it in connection with the levying and collection of special assessments provided for by the Ordinance under which the improvement is constructed, the remedy of persons entitled to have such assessment levied and collected is by a mandamus to compel the ■ performance of such duties. (People v. City of Pontiac, 185 Ill. 437.) Where the special assessment has been levied and collected by the city and nothing remains to be done except to pay it to the party entitled to it, assumpsit is a proper remedy to compel the city to pay it over. • The stipulation shows that appellant collected $4353-77 of this assessment which was transferred to “Fund W” and $3072.82 which -was placed to the credit of the sewer department. This the city had no legal right to do. The funds collected from this special assessment constituted a trust fund to pay for the improvement, and the city had no right to transfer them to other funds and draw on them indiscriminately for pay-rolls of inspectors, engineers,' accountants and other officers and employees of the special assessment department, without regard to the improvement with respect to which such services were rendered or expenses incurred. Even if appellant might properly pay out of these funds the necessary expenses for inspection and engineering incurred in connection with this improvement, it could not appropriate for this purpose more of such assessment than was necessary for such purpose. Under the system of creating one fund for inspection and engineering and another for sewer department, and arbitrarily taking from each local improvement an amount estimated to be its proper contribution to such funds, it is apparent that no one fcould tell, even approximately, whether any particular improvement was bearing more or less of its just share of such expenses. Appellant having thus wrongfully diverted these amounts is liable therefor in this action. The questions whether appellant is liable for interest upon these amounts, and if so, at what rate, and the time from which such interest shall be computed, are questions properly submitted for our determination. Appellee insists that he is entitled to interest at the rate of six per cent from December 31, 1896, which is the day on which appellant transferred'these funds from the special assessment fund to other funds held by appellant, for other purposes than the payment of the obligation incurred by this improvement. The bonds issued to appellee in payment for this improvement, and which remain unpaid, bear six per cent interest, and it is upon this fact that appellee bases his claim to recover that rate of interest in this suit. Appellant contends that it is not liable for any interest, and if liable at all, that it is only liable at the rate of five per cent, to be computed from the time when there was a default, at maturity, of the bonds to pay them. The circuit court sustained appellee’s contention on this point, and allowed interest at six per cent from the date when the transfer of the funds occurred,— a period of ten years. The Appellate Court disagreed with the trial court, and allowed interest at five per cent from the time when appellee became entitled, under his bonds, to demand the payment of these funds to him. Upon this question we think that the view of the Appellate Court is correct. While appellee’s ownership of past-due bonds issued in anticipation of this special assessment is a necessary element in his right to recover in this case, still this is not a suit upon the bonds in the sense that the recovery must be according to the tenor and effect of the instruments, but it is essentially a suit against the city for money had and received to the use of appellee which in good conscience ought to be paid to him. The rate of interest, therefore, which appellant is liable for, is that fixed by the statute, and not the contract rate specified in the bonds. Appellee is undoubtedly entitled to the rate mentioned in the bonds as against the special assessments levied or to be levied to pay such bonds, but the general liability of appellant to pay interest does not arise out of the contract, but out of the unlawful withholding of these funds after they were collected by the city. The general rule as to the liability of municipalities is, that they are not liable on their contracts for interest in the absence of an' express agreement to pay it, yet where money is wrongfully obtained, or where it is lawfully obtained and unlawfully and wrongfully withheld, the municipality is liable for interest to the same extent as a private person. (Vider v. City of Chicago, 164 Ill. 354; City of Danville v. Danville Water Co. 180 id. 235; City of Chicago v. Northwestern Mutual Life Ins. Co. 218 id. 40.) Appellant transferred these funds on its books December 31, 1896, but on that date appellee was not entitled to receive the same, for the reason that at that time he held no bonds that were due. The transfer of the funds by the appellant was at that time a mere matter of harmless bookkeeping, so far as appellee was concerned. If appellant had restored these funds to the special assessment fund on the day that appellee’s obligations matured, so that the funds would have been on hand ready to meet his obligation, it can hardly be said that the mere fact that appellant had previously, through a misapprehension of the law, allowed the fund to rest in another account, ought to make appellant liable to appellee for interest. We think that appellee’s right to demand interest of appellant accrued when he became entitled to demand and receive the funds under his bonds, which was a period some months later than the date upon which appellant transferred the funds upon its books. Upon this basis the amount that appellee is entitled to recover on account of the two items now under consideration is $10,071.71. Second—The next item in appellee’s claim is $5251.18, which was rebated to the property owners under the circumstances set out in the statement preceding this opinion. Both the circuit and Appellate Courts held that the appellant was liable for these rebates, with interest thereon. It must be borne in mind that the amount of these rebates never, in fact, came into the hands of the city. Through a misapprehension as to the legal basis upon which the special assessment should have been levied these rebates were left with the tax-payers. If appellant is required to pay appellee these rebates, the effect of it will be to establish a general liability against the city for the mere neglect, default or mistake of its officers in regard to the levying and collecting of a special assessment. It is true that appellant had no legal right to make such rebates, and all orders and proceedings purporting to authorize such rebates were null and void. Being mere nullities they could not have been interposed as a defense to an application for a mandamus to compel the collection of the full amount of the special assessment. Appellee’s remedy, in so far as the amount of these rebates is concerned, is by mandamus to compel the performance of whatever legal duties appellant is under in connection with the collection of these rebates from the taxpayers. It is suggested that difficulties arising out of the lapse of time will prevent the collection of the original ‘assessment or the levying of a supplemental assessment covering these rebates. However this may be, we are not inclined to extend the general liability of a municipality for special assessments beyond that which results from a failure to pay over money actually collected by it. These rebates never having come into the hands of the city in cash, it is not liable in an action of assumpsit for them, on the theory that by the exercise of due diligence in the discharge of its legal duties it ought to have” collected them. Third—The city discharged its full duty, under the contract and under the law, when it perfected the tax titles to such lots as were delinquent and tendered the deeds obtained on tax sales to appellee. It is not liable to appellee for the amount of these delinquent special assessments. The Appellate Court properly disposed of the appellant’s contention that the judgment below exceeded the ad damnum of the declaration. Under the stipulation no objection for wánt of a proper pleading by either party can now be raised. All the facts in this case are before the court, and no reason exists for remanding the cause. The judgment of the Appellate Court will therefore be reversed and a judgment entered in this court for the amount due, which is $11,051.68, to which should be added five per cent interest from February 4, 1907, the date on which the judgment was entered in the circuit court, to the date on which this judgment is entered. Judgment reversed and judgment in this court.