Court Opinion

ID: 8195083
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:18:19.222984+00
Date Added: 2024-06-11T16:40:44.523571
License: Public Domain

Rosenberry, J.
(dissenting). I am unable to agree with the conclusion reached by the court in this case, and briefly indicate the grounds of my dissent.
A drainage district is but an arm of the state, created for the purpose of performing a single function, and is a gmsi-municipal corporation with limited powers. McMahon v. Lower Baraboo River D. Dist. 184 Wis. 611, 200 N. W. 366; Harkins v. Smith, 204 Ala. 417, 85 South. 812. It being a g«m’-public corporation, the commissioners could exercise only those powers which were conferred upon them by statute. Qííím'-corporations are of the lowest rank and their authority must be found within the four corners of the statute. They are not political bodies, have no political *340powers, but are strictly governmental agencies. 1 Dillon, Mun. Corp. (5th ed.) p. 67, and cases cited; Dore v. Milwaukee, 42 Wis. 108.
The power to borrow funds is conferred by sec. 1379— 316, S. & S. Stats. 1906:
“The commissioners may borrow money, not exceeding the amount of assessments for construction, additional assessments and assessments for repairs unpaid at the time of borrowing, for the construction or repair of any work which they shall be authorized to construct or repair, or for the payment of any indebtedness they may have lawfully incurred, and may secure the same by notes or bonds bearing interest at a rate not to exceed six per cent, per annum, and not running beyond one year after the last instalment of' the assessment, on the account of which the money is borrowed, shall fall due; which notes or bonds shall not be held to make the commissioners personally liable, but shall constitute a lien upon the assessments for the repayment of the principal and interest of such notes or bonds.”
The cost of construction is defined as follows (sec. 1379— 18):
It “shall include all incidental expenses, the reasonable cost of organizing said district, the costs of proceeding and all probable damage to lands, both within and without the district, together with a reasonable attorney fee for the petitioners.”
By the provisions of sec. 1379 — 30, S. & S. Stats. 1906, assessments are provided for as follows:
“If in the first assessment for construction the commissioners shall have reported to the court a smaller sum than is needed to complete the work of construction, or if in any year an additional sum is necessary to pay the interest on lawful indebtedness of said drainage district, further or additional assessments on the lands and corporations benefited, proportioned on the last assessment of benefits which has been approved by the court, shall be made by the commissioners of said drainage district under the order of the court or presiding judge thereof without notice, which *341further or additional assessment may be made payable in instalments.”
Nowhere in the act is there conferred on the commissioners the authority to pledge the full faith and credit of the district for the payment of bonds issued by them. Recitals in the bonds issued cannot confer power upon the commissioners or enlarge the liabilities of the district, there being no statutory authority to insert such recitals in the bonds. Dixon County v. Field, 111 U. S. 83, 4 Sup. Ct. 315. Nor is there to be found within the law as it stood in 1907, at the time these bonds were issued, any power either in the commissioners or the court to levy an assessment to cover a default in the payment of bonds. The bonds were to be issued against the assessments already made and payable out of them.
In addition to that, the whole scheme and purpose of the statute was to impose liability for the improvement upon the lands benefited, first, not in excess of the amount found by the assessment of benefits; and second, to distribute the cost in proportion to the benefits received, and not upon area, value of the lands, or other basis.
By the provisions of sec. 1379 — 22, S. & S. Stats. 1906:
“Any owner of land, or any corporation assessed for construction, may at any time within thirty days after the confirmation of said report, pay into court the amount of the assessment against his land or any tract thereof or against any such corporation. Said payment shall relieve said lands, from the lien of said assessment and said corporation from all liability on said assessment.”
By the provisions of sec. 1379 — 315, already quoted, the bonds are made a lien on the assessment. If, as now proposed, a new assessment can be levied upon those landowners who paid and discharged their liability, their land will not be relieved from the lien of this assessment, but in order to relieve themselves they will have to pay a new and *342additional assessment. That the act as it stood at the time the bonds were issued did not contemplate additional assessments for the payment of the principal of bonds defaulted further appears from sec. 1379 — 31p, S. & S. Stats. 1906:
“Each and every sum assessed for construction, for additional assessment or for repairs against any land or against any corporation, as soon as srich assessment is confirmed by the court, shall be and is declared to be a judgment of the circuit court in favor of said drainage district and against said land or corporations,”—
indicating that there was no intent to make one parcel of land liable for assessments against other parcels, else why put it in such final and conclusive form as a judgment.
It is not contended that the statute as it stood in 1906 contained any provision for an additional or supplemental assessment for the payment of the principal of bonds in default. By ch. 633 of the Laws of 1913, the words “principal or” were inserted in sec. 1379 — 30, so that as amended it read:
“If in the first assessment for construction the commissioners shall have reported to the court a smaller sum than is needed to complete the work of construction, or if in any year an additional sum is necessary to pay the principal or interest on lawful indebtedness of said drainage district, further or additional assessments on the lands and corporations benefited, proportioned on the sum of all the assessments of benefits which have been approved by the court, shall be made by the commissioners,” etc.
, The court holds that the insertion of the words “principal or” by ch. 633, Laws of 1913, gave to the bondholders a new remedy, and that the bondholders may now avail themselves of it without violating any of the constitutional guarantees. If ch. 633 provides nothing but an additional remedy, I should of course agree with the conclusion reached by the court. It is my opinion, construed as it is now construed by the court, that it conferred a new *343right, and that thereafter, upon application to the court, an owner of land within the drainage district would be subject to an additional burden and one not contemplated or within the purview of the statute as it stood in 1906. While the amendment gave the bondholder a new right, it also operated to completely destroy the landowner’s defense. If an action had been brought to compel the commissioners to order a reassessment prior to the enactment of ch. 633 of the Laws of 1913, the landowner could have successfully asserted in opposition thereto that the law nowhere authorized the making of such an assessment, and it would have operated as a complete defense to the bondholder’s claim. A party has a vested right in a defense even where the defense is based upon the statute of limitations. The whole matter was discussed and reviewed in Eingartner v. Illinois Steel Co. 103 Wis. 373, 79 N. W. 433. While the supreme court of the United States holds a different view with respect to a defense based upon the statute of limitations, it recognizes that a right to a defense may vest as well as a right to a cause of action. Pritchard v. Norton, 106 U. S. 124, 1 Sup. Ct. 102. The court said:
“Hence it is that a vested right of action is property in the same sense in which tangible things are property, and is equally protected against arbitrary interference. Whether it springs from contract or from the principles of the common law, it is not competent for the legislature to take it away. A vested right to an existing defense is equally protected, saving only those which are based on informalities not affecting substantial rights, which do not touch the substance of the contract and are not based on equity and justice.” See, also, Board of Education v. Blodgett; 155 Ill. 441, 40 N. E. 1025, 31 L. R. A. 70.
The petition of the bondholders and the response of the commissioners under our practice is no doubt a special proceeding rather than an action, but I perceive no reason why the rule should not be as applicable to one as to the other.
*344I am also of the opinion that the law as it stood in 1906 was designed to cast the burden of the improvement upon the lands in proportion to benefits only and not to make one parcel of land liable for the share which was properly apportioned to another parcel. The legislature no doubt had the power to adopt whatever basis it chose for distributing the burden of this improvement, providing the assessments did not exceed the benefits. It chose to distribute it proportionately according to benefits. As now construed, one parcel of land is made liable for a part of the burden properly apportionable to other parcels. In other words, as now construed the statute departs from the original scheme; the burden is imposed upon the entire district without regard to whether the burden is distributed proportionately or not and a new relationship is brought into existence. The landowner who pays a disproportionate share has no remedy over against the defaulting landowner, and a landowner who was led into this arrangement under a, statute which made him liable only for his proportionate share is now made liable upon an entirely different basis. While this question does not seem to have been passed upon directly, the reasoning of the following cases seems to indicate that it is not competent for the legislature to so modify the act and impose a new burden upon the landowner: Briscoe v. Dist. of Columbia, 221 U. S. 547, 31 Sup. Ct. 679; King v. Portland City, 184 U. S. 61, 22 Sup. Ct. 290; Wurts v. Hoagland, 114 U. S. 606, 5 Sup. Ct. 1086. Such, also, is the clear inference from the decision in Stone v. Little Yellow D. Dist. 118 Wis. 388, 95 N. W. 405.
It is argued that a great injustice will be done the bondholders if it be held that they are limited to the assessments authorized by the statute as it stood in 1907. I do not concur in that conclusion for the following reason: In the first place, there was an assessment of benefits by which it *345was determined how much each parcel of land within the district would be benefited. This determination is made conclusive upon the landowner. If it thereafter appears that instead of being benefited his lands were damaged, he will not be permitted to impeach the assessment for benefits. Ward v. Babcock, 162 Wis. 539, 156 N. W. 1007. If the determination is conclusive upon the landowner and he cannot thereafter question it, I see no injustice in holding that it is equally conclusive upon the bondholder who accepts a bond issued in an amount not exceeding the cost of construction and for the payment of which the various parcels of land are irrevocably pledged and upon which he has for his benefit not only a tax lien but a judgment lien. If there was an error in making the assessment of benefits and the amount assessed against a particular parcel of land is now found not only to exceed the benefit but also the original value of the land, it would seem that enough injustice has been done the landowner without making him liable under the scheme now approved by the court not only for the excessive assessments made upon his own land but for excessive assessments made upon the land of his defaulting neighbor. The landowner went into the drainage scheme relying upon the statute; the bondholder took his bonds in reliance upon the statute; and I see no injustice in permitting them to stand or fall by the terms of the statute. On the contrary, it seems to me an injustice to alter the scheme now so as to impose upon the landowner who has paid his proportion of the cost of the construction, a new burden which was never contemplated by the legislature. For these and other reasons I respectfully dissent.
I am authorized to say that Mr. Justice Stevens concurs in this dissent.
A motion for a rehearing was denied, with $25 costs, on June 21, Í926.