Opinion
No. 33128.
March 28, 1938.
1. DRAINS.
Drainage district bonds were void to the extent that the aggregate amount of the principal and interest thereon and 10 per cent. for unforeseen contingencies exceeded total assessed benefits of the district (Laws 1912, chapter 195, as amended by Laws 1914, chapter 269).
2. DRAINS.
The Legislature may authorize drainage districts to contract debts prior to or subsequent to the assessment of benefits, provided liability therefor is not imposed on the land or its owner in excess of the benefits accruing to the land (Laws 1912, chapter 195, as amended by Laws 1914, chapter 269).
3. DRAINS.
Statutes validating drainage district bonds merely render bonds, which have been issued, without authority, in excess of the benefits assessed against the land, a legal obligation of the district in its corporate capacity, enforceable only against such funds or other assets as the district may possess, and no lien is created on the land of the district (Laws 1912, chapter 195, as amended by Laws 1914, chapter 269; Laws 1922, chapter 295; Laws 1924, chapter 225; Laws 1926, chapter 280).
4. DRAINS.
A lien on the land in a drainage district for improvements in the district, and the right to levy a tax for the payment thereof, must be predicated on an assessment of benefits at least equal to the indebtedness contracted (Laws 1912, chapter 195, as amended by Laws 1914, chapter 269).
5. DRAINS.
Under statute authorizing issuance of drainage district bonds and assessment of benefits to land therein, where drainage commissioners and board of supervisors found that original bond issue, plus 10 per cent. for unforeseen contingencies, was insufficient to complete drainage system, and additional bond issue was made, commissioners could make new assessment of benefits if they believed land would receive benefits in addition to those already assessed, and board could levy tax on additional assessment to pay outstanding bonds (Laws 1912, chapter 195, as amended by Laws 1914, chapter 269).
6. MANDAMUS.
Under statute authorizing issuance of drainage district bonds and assessment of benefits to land therein, drainage commissioners could be compelled, by mandamus, to meet and consider whether levy of additional benefits was justified, where it appeared that original and additional bond issues for drainage system exceeded benefits previously assessed, but judgment of commissioners as to whether additional benefits had accrued or would accrue could not be controlled by mandamus (Laws 1912, chapter 195, as amended by Laws 1914, chapter 269).
7. DRAINS.
Under statute authorizing issuance of drainage district bonds and assessment of benefits to land therein, where original and additional bond issues for drainage system exceeded assessment of benefits on land of district, district was extended, and added territory was benefited by improvements already made in original district, for which the bonds were issued, new assessment of benefits could be made on all lands of the district as extended, to pay bonds (Laws 1912, chapter 195, as amended by Laws 1914, chapter 269).
8. DRAINS.
Where original and additional bond issues for drainage system exceeded original assessment of benefits, and no other assessment was made except for improvements incidental to extension of district, it was duty of drainage commissioners, with cooperation of board of supervisors, to make additional assessment and levy tax for payment of bonds, if it appeared to them, in exercise of their discretion, that additional assessment was justified (Laws 1912, chapter 195, as amended by Laws 1914, chapter 269).
9. MANDAMUS.
Where original and additional bond issues for drainage system exceeded original assessment of benefits, and no new assessment was made except for improvements incidental to extension of district, holder of bonds of original and additional issues could not, by mandamus, compel drainage commissioners, with co-operation of board of supervisors, to levy additional assessment and tax thereon, or to levy tax on original assessment, but could only compel such officials to meet and exercise their discretion as to whether additional assessment was justified (Laws 1912, chapter 195, as amended by Laws 1914, chapter 269).
APPEAL from the circuit court of Coahoma county; HON. WM. A. ALCORN, JR., Judge.
Maynard, Fitzgerald Maynard, of Clarksdale, for appellant.
It is appellant's contention that the lower court was in error in denying the appellant the right to the issuance of a writ of mandamus directed against the Commissioners of the District, appellees herein, commanding them to meet and levy an assessment or tax against the benefits assessed against all of the lands in the district, in an amount sufficient to pay the evidences of indebtedness of the district owned by the appellant, and further commanding them to certify said levy or assessment to the Board of Supervisors, with the request that said levy or assessment be so made.
The record clearly shows that the principal, interest and ten percent for unforeseen contingencies of the first and second bond issues exceeded the benefits then assessed against the land in the district, and that the commissioners had, therefore, no authority to issue the second bond issue of $2500.
Sections 9, 15 and 24, Chapter 195, Laws of 1912; Clark v. Pearman, 126 Miss. 327, 88 So. 716.
These bonds were, however, validated by Chapter 295 of Laws of 1922, Chapter 225 of the Laws of 1924 and Chapter 280 of Laws of 1926.
The constitutionality of these validating acts was upheld by this court in Griffith v. Vicksburg, 102 Miss. 1, 58 So. 781. Therefore, the bonds which appellant holds and payment of which he seeks, are valid, binding and subsisting obligations of the Long Lake Drainage District.
The appellant did not seek in the court below the remedy of forcing the commissioners by mandamus to make an additional assessment of lands in the district for the payment of his bonds. The validating statutes above referred to do not confer power on the drainage district to make an additional assessment on the lands in the district for the payment of the debts validated.
Anderson v. Robins, 161 Miss. 604, 137 So. 476.
However, the power so to do is conferred by Section 7, of Chapter 269 of the Laws of 1914, Section 4463 of Code of Mississippi of 1930.
White v. Lake Cormorant Drainage District, 130 Miss. 351, 94 So. 235.
We contend that the bonds held by appellant, being legal, binding and subsisting obligations of the district, constitute a lien on all lands and railroads of the district which are subject to taxation in an amount not to exceed the benefits assessed against the lands and railroads, and that the district cannot avoid the payment of its obligations by contending that the benefits assessed under the additional assessment roll were assessed for the purpose of paying the obligations of the district arising after the annexation of the additional territory and not obligations which were incurred prior thereto.
Sec. 24, ch. 195, Laws of 1912, as amended by Sec. 14, ch. 269, Laws of 1914; Sec. 25, ch. 195, Laws of 1912, as amended by Sec. 15, ch. 269 of Laws of 1914; Sec. 9, ch. 195, Laws of 1912, as amended by Sec. 8, ch. 269, Laws of 1914; Sec. 15, ch. 295, Laws of 1912, as amended by Sec. 11, ch. 269, Laws of 1914.
The bonds of the district here in litigation plainly state on their face that the full faith and credit of the district is pledged to the prompt payment thereof. There is no limitation contained in either the act or the bonds themselves. Neither states that the full faith and credit of the district is pledged in an amount not exceeding the then existing assessed benefits of the district.
It seems clear to us that when the bonds of the district become due, the holders of such bonds may resort to any and all the resources of the district to obtain payment thereof.
Surely a district cannot avoid payment of its bonds by contending that at the time of the issuance of these bonds the district was possessed of resources in a limited amount, and that the bondholders must look to these resources as they existed at the time of the issuance of the bonds for the payment thereof, and that such other property and resources acquired since the issuance of the bonds can in nowise be liable for the payment thereof.
Surely a drainange district which is under the law a body corporate cannot contend that certain of its property, assets and resources are exempt from the payment of the corporate debts because acquired after such debts were incurred.
Self v. Indian Creek Dr. Dist., 158 Miss. 7, 128 So. 339.
We submit that the bonds which appellant holds are valid, binding, legal obligations of the Long Lake Drainage District, and that all available funds of the district may be used in the payment thereof.
Roberson, Cook Luckett, of Clarksdale, for appellees.
There are three bond issues of the Long Lake Drainage District well to take into consideration in order to thoroughly grasp some of the questions incident to this litigation. The first was an issue of $14,000 of 1916; the next was the issue of $2,500 of 1917; and the next was an issue of $60,000 of 1929. The $14,000 issue, together with interest and 10% for unforeseen contingencies, lacked only $365 of being equivalent to the amount of the benefits assessed against the lands of the district as then constituted, the benefits being $25,935 and the total of the principal, interest and 10% for unforeseen contingencies being $25,570, so, therefore, when the issue of $2,500 was had in 1917, there was only $365 of unused benefits upon which an issue could be based. For that reason, the $2,500 issue was void, invalid and illegal for the reason that, as repeatedly held by our court, the benefits must never be less than the principal of the bonds, interest and contingent fund, and if the principal and interest of the bonds are in excess of the amount of benefits assessed, then the bonds are invalid.
The Supreme Court has so stated the law to be in no uncertain terms.
Clark v. Pearman, 126 Miss. 327, 88 So. 716; Gillis v. Indian Creek Dr. Dist., 134 So. 173; White v. Lake Cormorant Dr. Dist., 94 So. 235.
At the time of the issuance of the $2,500 in bonds, which are the bonds held by the appellant, and for the payment of which his petition of mandamus sought a writ directed to the commissioners to levy a tax on the assessment of the lands constituting the district as extended in 1929, same constituted no obligation of the district.
Subsequent to the issuance of said $2,500 in bonds, certain general validating statutes were enacted, the effect of which was to make said bonds an obligation of the district, and that is as far as the validating statute went. No validating statute or other statute has ever undertaken to make bonds which were invalid and illegal because the principal and interest exceeded the benefits anything more than an obligation of the district. They have not undertaken to create a security for the payment of the bonds. The most then that can be said of said statutes is that they permitted the debt to be legal but created no remedy for the collection of the debt.
Anderson v. Robins, 161 Miss. 604, 130 So. 476.
By virtue of the case just cited, the inescapable conclusion is that, where the indebtedness has been validated but still the amount of the indebtedness is in excess of the benefits assessed against the lands, then the holder of the indebtedness is without remedy because of the settled principle that the lands cannot be resorted to in an amount in excess of the benefits assessed thereon, and while it is true, in this case, that the appellant holds $2,500 of bonds of the Long Lake Drainage District, which constitute legal and subsisting obligations of the district solely because of the validating acts, but for the passage of which, the bonds would not be valid in view of the benefits having been exhausted as security for the bonds of $14,000 issued in 1916, still the said bonds in no sense constitute any lien on the lands nor can the lands be resorted to for the payment thereof.
We submit that in this case, which is an effort on the part of appellant to have the drainage commissioners make a levy on benefits already assessed, the court will bear in mind that the petition does not seek a direction to the commissioners that the commissioners assess the added lands, or the original lands, for that matter, with benefits occasioned thereto by the improvements made in 1915, and unless the added lands were thereby improved or the original lands were improved by more than had theretofore been adjudicated, then the court would be without authority in law to direct the issuance of the writ sought.
Argued orally by G.F. Maynard, Jr., for appellant, and by J. Lake Roberson, for appellee.
This is an appeal from the judgment of the circuit court of Coahoma county denying appellant's petition for the issuance of a writ of mandamus against the appellees as commissioners of the Long Lake Drainage District of said county to compel the commissioners to meet and levy a tax on the assessment of benefits on all lands within the bounds of the district, for the payment of certain bonds held by the appellant, which were issued by the district as originally organized under chapter 195, Laws of 1912, as amended by chapter 269, Laws of 1914, and which district was extended during the year 1929 to include other lands.
Two of the bonds in question, in the sum of $500 each, formed a part of the original bond issue in the sum of $14,000, and bear date of April 1, 1916, due and payable in 1935. The assessment of benefits against the lands in the district as originally organized was slightly in excess of the principal amount of the bond issue plus interest to thereafter accrue and 10 per cent. for unforeseen contingencies, but for some reason the funds collected were insufficient to pay the two bonds of that series held by appellant. The remaining five bonds, in the sum of $500 each, here in question constituted an additional bond issue in the sum of $2,500, issued on April 1, 1917, two of which became due and payable in 1935 and the remaining three in the year 1936. The aggregate amount of the principal, interest, and the 10 per cent. for unforeseen contingencies of both of these bond issues amounted to $5,454 more than the total assessed benefits of the district, and to that extent the bonds were void under the decision of Clark v. Pearman et al., 126 Miss. 327, 88 So. 716, but were validated so as to constitute legal obligations of the district in its capacity as a corporate entity under and by virtue of chapter 295, Laws of 1922, chapter 225, Laws of 1924, and chapter 280, Laws of 1926. However, the said validating acts did not undertake to provide any specific remedy to enforce the payment thereof or to create a lien on the lands of the district for that purpose.
It was held in the case of Anderson v. Robins, 161 Miss. 604, 137 So. 476, 478, that "the Legislature had full power, under the Constitution, to authorize drainage districts to contract debts prior to the assessment of benefits from the proposed drainage scheme to the land of the district, provided liability therefor is not imposed on the land, or its owners, in excess of the benefits accruing to the land." (Italics ours.) It follows from this that the Legislature could authorize drainage districts to contract debts subsequent to the assessment of benefits, provided liability therefor is not imposed on the land or its owners, in excess of the benefits accruing to the land. Where the drainage commissioners were without authority in the first instance to issue any bonds at all in excess of the benefits assessed against the land, as was true in regard to the bonds here in question, the effect of these curative statutes was merely to render such bonds a legal obligation of the district in its corporate capacity enforceable only against such funds or other assets as the district might possess, but did not create a lien on the land. There exists quite a difference between the effect which a validating statute has on the rights of the owners of the bonds of a drainage district and the effect of such a statute on the bonds of many other political subdivisions of the state in so far as they undertake to grant a remedy against the lands thereof, in that the lien on the land in a drainage district and the right to levy a tax for the payment thereof must be predicated upon an assessment of benefits at least equal to the indebtedness contracted.
At the time of the issuance of the bonds in the sum of $2,500, on April 1, 1917, it was recited in the resolution adopted by the commissioners and in the minutes of the board of supervisors, that the original bond issue of $14,000 was insufficient to pay for the improvements contemplated, or to complete the work begun in that behalf, and we must assume that the proceeds of the second bond issue were used in the work of completing the drainage system of the district as originally organized.
In the year 1929 the boundaries of the district were duly and legally extended so as to include certain other lands lying adjacent to the district as originally organized. The board of supervisors then authorized the issuance by the drainage commissioners of a further bond issue in the sum of $60,000 for the purpose of cleaning out, deepening, and widening the drainage ditches in the original district, and extending the drainage system over and across the lands added to such district. In extending the district and providing for the issuance of the $60,000 of additional bonds, there was a new assessment roll of benefits made on all the lands throughout the entire district as extended, based upon the estimated benefits that would accrue to the entire territory by reason of the cleaning out, deepening, and widening of the ditches theretofore made in the original district and in extending the system over and across the added territory, and benefits were assessed against the property of each land owner in excess of all indebtedness represented by the bonds of the appellant and the indebtedness represented by the $60,000 bond issue thereafter sold, after due notice in that behalf, but no additional assessment of benefits was ever made at any time on account of the improvements made from the proceeds of appellant's bonds on the lands embraced in the original district, on which a tax levy could be made to take care of the same, and neither was there any assessment of benefits made on the lands of the district as extended for that specific purpose. It is true that the board of supervisors, by an order entered upon its minutes at the time of extending and enlarging the district, recited that the added territory, as well as the original territory, would be benefited by the cleaning out, deepening, and widening of the ditches in the original district proposed to be paid for out of the additional bond issue of $60,000, and that the work contemplated under the said additional bond issue would likewise benefit the lands in the original district, but this did not constitute an adjudication that the added territory would be benefited by the improvements made several years prior thereto out of the proceeds of the first two bond issues, and neither did such recital constitute an assessment of additional benefits against any of the lands in the entire district for the purpose of paying for the improvements first made in the original district.
When the drainage commissioners and the board of supervisors found in the year 1917 that the original bond issue of $14,000, plus the 10 per cent. for unforeseen contingencies, was insufficient to complete the system of drainage contemplated in the district, and that the additional sum of $2,500 was needed for that purpose, a new assessment of benefits could have been made against the lands therein, under the authority of chapter 195, Laws of 1912, and amendments thereto, as construed in the case of White et al. v. Lake Cormorant Drainage District, 130 Miss. 351, 94 So. 235, provided the commissioners were of the opinion that the lands would receive additional benefits to those found and assessed in the first assessment thereof, and the board could have levied a tax on such additional assessment for the purpose of paying the bonds in question, but this was not done. Also, the commissioners could have been compelled by mandamus to meet and consider the question of whether the levy of additional benefits was justified, when it was found that the indebtedness incurred by the issuance of such additional bonds of $2,500 exceeded the benefits theretofore assessed. However, their judgment and discretion as to whether benefits had accrued or would accrue additional to those already assessed could not be controlled by the issuance of such a writ, as was held in the case of Anderson v. Robins, supra, where it was said: "Mandamus will lie to require the commissioners to assemble and act. But they cannot be required thereby to make such an assessment of benefits as will be sufficient for the payment of the indebtedness due. . . . . Board of Supervisors v. Lee, 147 Miss. 99, 113 So. 194. It will be their duty to make such an assessment when, but not until, it appears to them, in the exercise of their judicial discretion, that the land is susceptible thereof." Likewise it could have been adjudicated under the authority of Self v. Indian Creek Drainage District, 158 Miss. 7, 128 So. 339, 342, construing chapter 195, Laws of 1912, as amended by chapter 269, Laws of 1914, that the lands in the added territory would not only be benefited by the cleaning out, deepening, and widening of the drains and ditches embraced in the drainage system of the original district as a proposed improvement under the $60,000 bond issue, as recited in the order of the board of supervisors in connection with this particular bond issue, but that such added territory would also be benefited by the improvements already made in the original district, and an assessment of benefits on account thereof could have then been made on all the lands of the district as extended for the purpose of levying a tax to pay the bonds in question. But such adjudication and assessment was never made, it only having been adjudicated when the bonds of the district were extended that the added territory would be benefited by the improvements proposed to be made out of the proceeds of the $60,000 bond issue, in the matter of cleaning out, deepening, and widening the drains and ditches in the original district, and the extension of the system on and over the lands proposed to be included, and the new assessment of benefits on all the lands of the district as extended was made solely for the purpose of levying taxes to pay the costs of such additional improvements.
Prior to the issuance of the $60,000 of bonds on the lands of the district as extended, the landowners therein were notified of such proposal, and of the assessment of benefits to be made against each separate tract of land on which the taxes were to be levied for the payment of the bonds, and they were given an opportunity to file objection thereto, as well as to the proposed extension of the district. This notice to the landowners of the district as extended constituted the process on which the judgment of the board approving the assessment of benefits and extending the bounds of the district was founded. This process and the judgment rendered thereon met with no objections on the part of the landowners, and no appeal was taken therefrom, with the result that the judgment bound the landowners to pay such taxes only as might be levied on the assessment of benefits then actually made against the lands, and in the absence of an additional assessment of benefits heretofore, or to be hereafter, made on account of the improvements made in the original district several years prior thereto, this judgment controls as to the limit of the liability of the land for the payment of the indebtedness of the district. All levies of taxes under the drainage laws of the state as heretofore stated are predicated solely and alone upon assessments of benefits previously made, and without which assessment of benefits there is no authority anywhere in any of the provisions of the statutes or decisions of the court for levying a tax for the payment of the costs of drainage improvements.
In the case of Self v. Indian Creek Drainage District, supra, an assessment of benefits against adjacent territory for improvements already made, and the extension of the district to include such lands, was upheld by the court for the reason that there had been an adjudication that the lands in the territory proposed to be added would be benefited by the improvements already made, and for the further reason that there had also been an assessment of such benefits against such land duly reported by the commissioners fixing the amount of benefits to accrue to each owner, which was approved by the chancery court after due notice to the landowners as required by law. Therefore, the conclusion reached in that case is not authority for appellant's contention in the case at bar, because of the failure in the present case to make an assessment of additional benefits accruing to the lands in the original district, or any assessment on the lands of the district as extended for the improvements paid for out of the funds derived from the sale of the bonds in question, after the benefits originally assessed had been exhausted by the levy and collection of taxes thereon.
It is true that in the Self Case the court said that the funds derived from the assessment of the added territory "are in the same category as funds derived from the assessment against the lands of the original district," but when the opinion in that case is considered as a whole it is clear that by the above statement the court meant that the funds derived from the assessment of the added territory were to be treated as being in the same category as the funds derived from the assessments against the lands of the original district in the manner of the application thereof to the indebtedness based upon the assessment of benefits made for that purpose.
Under the authority of the statutes and of the cases hereinbefore cited, the commissioners, in co-operation with the board of supervisors, have the authority to make and approve an additional assessment of benefits on all the lands of the district as extended, or on such part thereof as they may find to have sustained additional benefits on account of the work done and paid for by the proceeds of the bonds in question, in addition to those benefits heretofore assessed, if they are disposed so to do, and it is their duty to make such additional assessments and to levy a tax for the payment of such bonds, if it appears to them in the exercise of their judicial discretion that such additional assessment of benefits is justified. But the appellant as holder and owner of such bonds would only be entitled to a writ of mandamus to compel these officials to meet and act in the matter, and is not entitled to the issuance of the writ, as prayed for, to compel them to levy the additional assessment of benefits, and a tax thereon, or to compel them to levy a tax on the assessment of benefits heretofore made.
The judgment of the court in denying the issuance of the writ as prayed for must therefore be affirmed.
Affirmed.