Court Opinion

ID: 8806664
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:49:58.896198+00
Date Added: 2024-06-11T17:04:07.647387
License: Public Domain

AMIDON, District Judge
(dissenting). I am unable to concur in the foregoing opinion, and will briefly state my reasons.
1. The defendant was organized for the purpose of carrying out a special improvement. The cost of that improvement was to be paid by a special assessment upon the property benefited. The power to levy annual taxes is confined to the upkeep of the project after the irrigation ditches are constructed. The defendant is not authorized to levy general taxes for any other purpose. It may not levy such taxes under the law of its creation to pay the cost of constructing the irrigation system. The scheme of the statute does not contemplate that one piece of land shall be responsible for the default of another in the payment of special assessments which the law authorizes. Land may be included in a project by majority vote against the will of its owner. It is manifest that if each parcel of land is liable for the entire cost of the project its assessment may greatly exceed any benefit conferred. The assessment provided by the law is not based upon the *376value of the property, but is apportioned ratably as special assessments usually are. A special assessment which substantially exceeds the benefits amounts to a taking of property without due process of law. Norwood v. Baker, 172 U. S. 269, 19 Sup. Ct. 187, 43 L. Ed. 443. It is manifest that under the majority opinion a faithful remnant of the property embraced in the project may be charged with substantially the entire .cost of the irrigation project. That, in my judgment, is a clear departure from the scheme of the statute, and even if such were the scheme when properly construed, the result would be a violation both of the state and the federal Constitution. It is not claimed that defendants have failed to levy the assessment or to take any step required by law for its collection. The only claim is that owing to delays in the procedure for the collection of the assessment, it has not yet resulted in .a sufficient fund to pay the bonds. It results that defendants have not failed to' perform any duty which may properly be enforced by mandamus, and that what they are commanded to do is something which they have no legal right to do.
2. The bonds are what is known in the commercial world as improvement bonds. They bear an exceptionally high rate of interest. They are, like ordinary municipal warrants, issued solely for the purpose of anticipating the collection of the special assessment. Under the statute they are payable out of a fund to arise from the collection of the special assessment, and do not create a general liability upon the lands embraced in the project to be paid by ordinary tax levies. Such improvement bonds have been issued by municipalities in the coast and mountain states for hundreds of millions of dollars. Their character is well understood in the commercial world. It is well known that such bonds are payable solely out of a fund arising from the special assessment. They bear a high rate of interest, and are frequently sold at a discount because they are not what is known in the business world as municipal bonds. Parties purchasing such securities investigate the project lying behind them as carefully as a good loan agent investigates properties upon which he is taking a mortgage. The price paid, as well as the rate of interest, expresses the hazard which the purchaser of these improvement bonds takes. To treat them as municipal obligations, as the majority opinion does, is, in my judgment, a complete departure from the view of the business World which deals in such securities.
For these reasons I think the judgment should be affirmed.