Court Opinion

ID: 3411079
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:28:51.850948+00
Date Added: 2024-06-11T13:51:07.158660
License: Public Domain

With all due respect to the opinion of my associates I am unable to concur therein. There is no material dispute as to the facts. It will no doubt be conceded that when the mayor and city clerk drew the warrant on the general fund of the city for $8,153.54, payable to the First National Bank, they acted without sanction of law and the warrant was illegal and the use of the proceeds of this warrant for the payment of the due bonds and accrued interest of the improvement district was likewise illegal. That the proceeds of the warrant paid into the improvement district fund should have been immediately returned to the general fund of the city must be conceded; however, the lapse of time did not right *Page 607 
the legal wrong, and the title to the money so unlawfully withdrawn from the general fund did not vest in the improvement district. The $8,153.54 was the money of the city at all times, collected from the general taxpayers of the city for a specific purpose and none other, and was subject to be recalled and replaced in the general fund at any time as funds came into the special improvement district fund.
It is indeed difficult to conceive how the bondholders could be injured by the unlawful act of the mayor and city clerk. In fact all of the bondholders were benefited, some to the extent of having their bonds paid off, others to the extent of having their coupons paid. It is admitted that all of the money collected from the special improvement district by the city was paid to the bondholders. The rule is well established in this jurisdiction that where a municipal corporation has paid upon obligations of an improvement district a sum equal to the amount collected from assessments against the property within said district, such corporation cannot be made liable for any further amount to the creditors of the district. The indebtedness created by an improvement district is a liabilityin rem against the property within such improvement district and is not a liability of the person or of the municipality. (Broad v. City of Moscow, 15 Idaho 606, 99 P. 101; New FirstNat. Bank v. City of Weiser, 30 Idaho 15, 166 P. 213.) The statutes of this state afford the bondholder a plain, speedy and adequate remedy at law by foreclosure of his lien against the delinquent taxpayer's property within the improvement district. (Broad v. City of Moscow, supra; First Nat. Bank v.City of Weiser, supra; New First Nat. Bank v. Linderman,33 Idaho 704, 198 P. 159.) A municipality, as such, has no interest in the bonds of an improvement district with the right of foreclosure against a delinquent assessment. Should there be, and there is no showing to the contrary, sufficient delinquent assessments on the property within the district to pay off the balance of the bonded indebtedness the city could not reimburse itself by legal *Page 608 
proceedings and in this way return the money to the general fund. No such right or remedy is contemplated by statute.
Concisely stated, we have this situation: An improvement district was created, bonds of the district were sold, the money received was expended for improvements within the district, the property of the district became liable for the amount of the bonds, together with interest, to be paid by special assessment levied against the property within the district. The bonds contain the following language:
"The holder of any bond issued under the authority of this section shall have no claim therefor against the city or village by which the same is issued in any event except from the collection of the special assessments made for the improvements for which said bond is issued, but his remedy in case of nonpayment shall be confined to the enforcement of such assessments."
"The principal sum herein named and the interest thereon shall be payable out of the local improvement fund created for the payment of the cost and expense of such improvement, and not otherwise."
". . . . For the collection of the assessments levied in said Local Improvement District No. 18 the City of Blackfoot, County of Bingham, State of Idaho, hereby pledges the exercise of all lawful corporate powers."
As will be seen from the language used in the bonds there is no liability against the city for the payment of the bonds or interest in case of nonpayment, but both the liability and the enforcement of the remedy is against the lands within the improvement district. The city is merely burdened with the duty of paying over to the bondholders the special assessments which have been paid to or collected by the city for the payment of their bonds and the interest thereon as they mature. By awarding judgment against the city, taxpayers without the improvement district are forced to pay an indebtedness of the improvement district directly in violation of statute, and in this manner, to the extent of the judgment against the general taxpayers *Page 609 
within the city, the bondholders are paid contrary to the stipulation in the bonds. The liability against the taxpayers is founded upon the unlawful act of the mayor and city clerk performed without the knowledge or consent of the general taxpayers. The bondholders would have been in no worse position had the improvement district fund not unlawfully received the $8,153.54 from the general fund of the city. The bondholders, as above stated, have received every dollar paid into the city treasury from special assessments levied upon property within the improvement district, and this is all they were entitled to receive and all their contracts called for.
It is my opinion, however, that the city should not be permitted to reimburse itself for any interest paid to the First National Bank on the illegal warrant drawn by the mayor and city clerk out of the improvement district fund and neither should it be reimbursed for the amount paid out for exchange.
The judgment should be reversed.