Court Opinion

ID: 3548255
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:00:56.508454+00
Date Added: 2024-06-11T14:06:31.758767
License: Public Domain

It is shown by the petition that pursuant to an act of the legislature approved February 17, 1873, Lincoln county issued and delivered certain bonds to one Harry I. Thornton; that the petitioner was and is the owner and holder of said bonds; that said bonds, nor any part of them, have not been paid, and that the interest thereon from the date of maturity to the 1st day of January, 1899, amounting in the aggregate to $9,620, is also due and unpaid.
It is also shown that the respondents, as the board of county commissioners of said county, have refused and neglected to levy the special tax provided for in said act for the purpose of creating a fund for the payment of said bonds and the interest due thereon.
To the petition the respondents have answered, in effect admitting the material averments therein, but alleging as a defense thereto that since the year 1885, and up to the year 1896, the respondents have not levied or collected any interest tax for the payment due on said bonds under the provisions of the act of 1873; that of the proceeds of the tax levied for interest on the outstanding bonds of said county in 1885 there remained in the interest fund of said county, up to *Page 129 
1894, the sum of $600 applicable to the payment of said bonds and interest; that in March, 1894, the sum of $590 of said sum was paid out upon interest coupons then presented, leaving a balance in said fund of $10; that the cause of action set forth in the petition did not accrue to the holder of said bonds within six years immediately preceding filing the petition, and therefore the statute of limitations applies against the bonds and any interest alleged to be due thereon since the date of maturity.
The facts stipulated are that from 1885 to 1896 the board of county commissioners did not levy or collect a tax provided for in section 8 of the act approved February 17, 1873 (Stats. 1873, p. 54), nor did they levy any tax during said years for said bonded indebtedness, or any part thereof; that of the levy of 1885 the sum of $600 remained in the interest fund until March, 1894, when $590 thereof was paid out upon the coupons of said bonds; that the sum collected from the tax levy of 1896, 1897, and 1898 amounted annually to about the sum of $2,400, and was consumed in paying coupons of said bonds which matured on January 1, 1883, and prior thereto; that no interest maturing on petitioner's bonds subsequent to January 1, 1883, has been paid, and no means exist for their payment, unless the respondents can be required to levy and collect a tax provided for in the act of 1873.
Practically the same question was presented to and decided by this court in the action of State v. Board ofComrs. of Lincoln Co., 23 Nev. 262. Counsel for respondent seeks, in his brief, to distinguish that case from the case at bar, claiming that the presentation of the coupons under the act of 1877 created a new contract as to the coupons alone.
We fail to note the distinction made. By section 8 of the act of 1873, it is provided that, in addition to the ordinary taxes for county purposes, there shall be for the year 1873, and annually thereafter until the principal and interest of said bonds shall be fully provided for, levied and collected a special tax, to be called the "interest tax," of forty-five cents on each $100 of taxable property of the county. The fund derived from this tax shall be applied only to the payment of the interest accruing upon said bonds, provided that, *Page 130 
should said funds furnish a surplus over and above what may be required for the payment of said interest, such surplus shall be turned over and paid into the sinking fund provided for by section 10 of the same act.
Section 10 created a sinking fund, into which should be paid any and all surplus of the interest fund aforesaid, and required that each of the payments should be continued until the sinking fund should be sufficient for the payment of the principal and interest of the bonds. It will therefore be observed that the act authorizing the issuance of the bonds provides a special fund to which the holder could look only for the payment of the interest and principal; that there is no other fund provided for by law out of which payment of these bonds, or any interest thereon, can be made.
In the language of the court in State v. Boardof Comrs. of Lincoln Co., above cited: "As long as the tax was being levied and collected, there was no occasion for him to bring an action, and, if he had, it seems very probable it could not have been maintained, had the proper defense been made. But when the money was collected he would be entitled to it. Then his cause of action would be fully ripe, and if not prosecuted within the statutory period would doubtless be barred. If not levied or collected, his remedy would be the one he is now pursuing to compel the officers to do their duty in the premises."
The board of county commissioners having failed and refused to provide the fund from which the interest and principal of these bonds could be paid, and to which the holder could look alone for payment, the statute of limitations cannot be successfully interposed.
"It is a general rule that, when payment is provided for out of a particular fund, or in a particular way, the debtor cannot plead the statute of limitations without showing that the particular fund has been provided, or the method pursued." (Sawyer v. Colgan,102 Cal. 283, 36 P. 580; State v. Board ofComrs. of Lincoln Co., 23 Nev. 262.)
  The writ will therefore issue. *Page 131