Henning v. City of Casper

The plaintiff's petition states several causes of action, on different theories, for a money judgment against the city. Plaintiff contends that the original assessments are invalid, and that the city has no power to make re-assessments. Our decision assumes that the city, in spite of the judgments in the previous actions by the bondholders against the property owners, may still have the power to collect the original assessments. If the original assessments are invalid, we see no reason for holding that re-assessments should not be made. Our order in effect converts the action for damages into an action for mandamus to require the city either to collect the original assessments or to make re-assessments. This seems to me likely to accomplish the right result, and I am willing to put aside possible objections on the ground that the petition is insufficient as a petition for mandamus.

While I concur in the result, I feel that I should state my reasons for a doubt on one question that has not been fully presented in argument and in my opinion ought, at least, to be left for decision in some future action.

In view of our disposition of the case, it seems unnecessary to decide whether a holder of special assessment bonds has a right to a general judgment against a city while it is still within the power of the city officers to make a valid assessment against the improved property. The majority of the court express the opinion that the bondholder, though he has a remedy by mandamus to require the making of valid assessments enforceable against the improved property, may in some cases be entitled to a personal judgment that will become a part of the public indebtedness to be paid from general taxes. I fear that this view enlarges the obligation of the contract in defiance of positive law.

Both the bond and the statute (§§ 22-1614, 22-1604, R.S. 1931) declare that: "Neither the holder nor owner shall have any claim therefor against the city by which the same is issued, except from the special assessment made for the improvement for which such bond was issued, but his remedy in case of non-payment shall be confined to the enforcement of such assessments," and that it "is payable only out of the local improvement fund created for the payment of the cost and expense of such improvement, and not otherwise."

Section 22-1542 by mandatory language provides for re-assessment when the original assessments have failed to be valid "for want of form or insufficiency, informality, or irregularity or non-conformance with the provisions of law, charter or ordinance," and the substance of this provision is contained in the bond. Section 22-1543, in speaking further of re-assessments, declares that "the omission, failure or neglect of any officer or officers to comply with the provisions of law, the charter or ordinances governing such city or town, as to petition, notice * * *, or any other matter whatsoever connected with the improvement and the first assessment thereof," shall not "operate to invalidate or in any way affect" the making of re-assessments authorized by section 22-1542, "* * * it being the true intent and meaning of this chapter to make the cost and expense of local improvements payable by the property specially benefited thereby, notwithstanding the proceedings of the council * * * officer or authority of such city or town may be found irregular or defective, whether jurisdictional or otherwise; * * *." Section 22-1552 declares that "it shall be the duty of the council, and it shall have the power by any subsequent proceedings, to correct any errors or irregularities in any of the proceedings mentioned in this act." The city may collect the assessments, but is not required to do so. Richardson v. City of Casper, 48 Wyo. 219, 45 P.2d 1.

I agree that these statutes limiting the liability of the city contemplate the making of valid assessments against the property benefited by the improvement. It was the duty of the city to make assessments that could be enforced by it or by the bondholder. If the original assessments are invalid, it is the duty of the city to make valid re-assessments. If the original assessments are invalid, and the power to make re-assessments has been lost, by reason of the city's wrongful or negligent act or omission, the bondholder should be entitled to a personal judgment against the city. On this point I agree with the other members of the court.

All the cases hold that when the claim of the bondholder to relief is not founded on the impossibility of levying an assessment, but upon the refusal or neglect of the city officers to perform their duty in that respect, mandamus is an appropriate remedy to compel an assessment or the correction of an invalid assessment. On the question whether, while this remedy by mandamus is available, the bondholder may nevertheless sue for a personal judgment against the city, the cases are in conflict. See Dillon on Municipal Corp. (5th ed.) pp. 1253-1254. The opinion of my associates on this point relies strongly on the views expressed in the fifth edition of Dillon on Municipal Corporations, pp. 1256-1257, where the question seems to be discussed as one of public policy.

Questions of public policy should be decided by the legislature (see Richardson v. City of Casper, supra, at p. 231), and the court should interfere only for the purpose of enforcing constitutional limitations of the legislative power. The statutes applicable in the case at bar contain provisions intended to prevent the general taxpayer from being compelled to pay for public improvements that ought to be paid from assessments against the property specially benefited. There is no doubt that this is a worthy purpose. If we establish a rule that will permit a judgment for damages against the city, before the remedies against the improved property have been exhausted, we seem to give the bondholder a greater right than he has by his contract or by the terms of the statutes. Cases wherein the point has been given most careful consideration support the view that the bondholder has no right to a personal judgment against the city so long as the remedy by mandamus is available. See Powell v. City of Ada, 61 F.2d 283; Severns v. Oklahoma City, 158 Okla. 182, 13 P.2d 94; Likes v. City of Rolla, 190 Mo. App. 140, 176 S.W. 520.

There may be ground for the contention that a procedural rule that authorizes a personal judgment against the city while it has the power to make valid assessments, will permit an evasion of constitutional limitations of public indebtedness. The majority opinion calls attention to those statutory provisions that permit the city to pay for improvements from general taxes, and also to the fact that that power is limited by the constitutional provision (sec. 4, art. 16), that "no debt in excess of the taxes for the current year shall, in any manner, be created by any * * * city * * *, unless the proposition to create such debt shall have been submitted to a vote of the people thereof and by them approved." It is probable that the amounts here in question are in excess of the taxes for the current year. Though the mentioned constitutional provision does not apply to debts to be paid from special assessments, nor to a liability arising from the fact that the city by its act or neglect has lost the power to make valid assessments, there may be considerable doubt whether, without a vote of the people, a general public indebtedness in excess of the current revenues can be created for the purpose of paying special assessments while there is still available a remedy by mandamus to require the doing of the acts necessary to fasten the indebtedness on the property where it belongs.

If the question is one of public policy, and the court is to assume the right to declare that the public interests require that the bondholder may sue for a personal judgment against the city when the city officers "wilfully" or "unreasonably and persistently" fail to make valid assessments, I think we should give more consideration than seems to have been given to the following matters. The owners of the improved property will be interested in defeating the assessments, but this interest will be less active if they know that valid re-assessments will be required. The bondholders, who may not be able to collect in full even on valid assessments (see Richardson v. City of Casper, supra), will also be interested in having the assessments omitted or declared invalid, if they thereby acquire a right to a personal judgment against the city. The city officers may be indifferent until they are sued. The general taxpayers will probably have no reason for thinking they are in jeopardy until they have notice of a suit for a personal judgment against the city, and even then it would seem that they should have the right to rely on the law designed for their protection, and to suppose that the court will not enter a judgment that will affect them unless it is clear that valid assessments cannot be made.