Court Opinion

ID: 3437109
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:09:31.358235+00
Date Added: 2024-06-11T13:48:33.254446
License: Public Domain

I find myself unable to agree with the majority and therefore respectfully dissent.
The question upon which we differ is the construction of section 6126-a2 of the 1935 Code, which is as follows:
"6126-a2. Form and amount. Bonds thus issued shall substantially conform to the provisions of this chapter, and the face amount thereof shall be limited to the amount of the unpaid special assessments with the interest thereof of the particular issue of bonds sought to be refunded."
It is the contention of the majority that the town of Spirit Lake had a right to issue and sell bonds for the full amount of the unpaid special assessments, whether these special assessments were liens against real estate or not, whereas it is my contention that the Legislature of Iowa gave to the town the right to sell bonds only for the amount of unpaid assessments which were liens against the real estate.
The town of Spirit Lake sold bonds in the amount of $175,870.37, and on the date these bonds were sold, to wit, August 10, 1925, the aggregate assessments in the several districts amounted to but $159,846.57. Thus it appears that at the time the refunding bonds were issued the outstanding assessments were $16,023.80 less than the amount of the bonds. Even the majority hold that the town of Spirit Lake is liable for that amount plus interest. With that of course I agree. At the time *Page 1310 
the bonds were issued there were unpaid assessments of $39,399.32 which were not liens against said real estate, the lien having expired.
In order to arrive at the conclusion reached the majority argue that the special assessments upon which the liens had expired were voidable and not void. It is a nice argument but one that I cannot follow because I cannot conceive that the Legislature of Iowa would authorize towns to issue and sell bonds when the only chance of those bonds being paid would be that the property owners would voluntarily pay assessments that were not liens against their real estate. I say "voluntary", for there is no legal way that payment could be enforced.
The majority in their analysis of the Hauge v. City of Des Moines case, 207 Iowa 1209, 224 N.W. 520, come to the conclusion that it does not bind the town to meet these obligations. I cannot agree with this interpretation. In the case at bar it is not a question of the failure of the town to collect the money after the bonds were issued, but rather the fact that at the very moment the bonds were issued the liens for a large percentage of these unpaid assessments had expired and there was no hope of them being paid except by voluntary payments. Can a town certify (as did Spirit Lake) that everything has been done, and then come into court when there is not sufficient money to pay the bonds, and say, "Well, at the time we issued these bonds there were unpaid assessments on which the liens had expired, and we are not liable for that amount of money"? The liability in this case is based upon the bonds. It is interesting to read the certificate which each bond contained. I quote from the bond:
"And it is hereby certified and recited: that all the acts, conditions and things required to be done precedent to and in the issuing of this series of bonds, have been done, happened and been performed in regular and due form as required by law and resolution; and for the assessment, collection and payment hereon of said special tax, the full faith and diligence of said Town of Spirit Lake are hereby irrevocably pledged."
You will notice it refers to the special tax. There wasn't any special tax as far as the property upon which the liens had expired was concerned, and that meant the funds would be paid not by a special tax but by voluntary payments on the part of *Page 1311 
the property owners. I can come to no other conclusion than that the Legislature when it gave to the cities the right to issue refunding bonds for unpaid special assessments meant that bonds could only be issued in the amount of the unpaid assessments that were liens against real estate. To me the majority opinion means that the Legislature intended by this enactment that Spirit Lake could sell bonds in excess of an amount the town knew it could pay. And that means that someone would be buying the obligations of the town of Spirit Lake, which obligations the town knew it could not pay, at the time the bonds were issued. That is what happened in the case at bar.
I am authorized to state that Chief Justice Stiger and Justice Sager join in this dissent.