City of Chicago v. Union Trust Co.

Mr. Justice Freeman delivered the opinion of the court. It appears that by reason of payment by the city of public benefits assessed against it for certain local improvements, which payment was made in accordance with a judgment rendered in mandamus proceedings (City of Chicago v. The People, 215 Ill. 235), the claims of complainant on many of the vouchers referred to in the bill have been satisfied in full. The controversy is therefore now confined to the remaining six of the warrants or vouchers referred to in the bill of complaint. There seems to be no dispute as to the correctness of the computation by which the amount due complainant, including principal and interest on said unpaid vouchers, is fixed in the decree at $11,101. It is, however, denied in behalf of the city that interest can be allowed after the collection of the assessments and denied that there are any funds in the city’s hands actually applicable to payment of the amounts due on the vouchers. It is said to be undeniable “that there are practically no funds whatever actually in the warrants,” the precise condition being that there is a deficit varying from between three and four hundred dollars to over seven thousand dollars in all of the six cases. (1) As to the contention that the decree improperly allows interest on the vouchers after their maturity, if the decree is correct as to the principal of the vouchers, we are of opinion the interest was properly allowed. In City v. The People, 215 Ill. 235-239, supra, after reference to the statute it is said: “from these sections of the statute it is clear that the several installments assessed against private individuals shall bear interest from their date until maturity and they shall also bear interest until paid. The portion of the assessment payable by the public seems to be placed upon the same footing as the portion payable by private individuals.” It was held that no distinction should be made. In the case at bar the decree provides for payment of the amounts found due complainant, first, out of funds collected by the city and held in trust by it to pay the vouchers; second, out of an appropriation made to pay public benefits; and third, out of an appropriation to pay for property purchased by the city at sales for the unpaid special assessments; and that all of said amounts found due, with interest thereon, and not paid out of the three appropriations above mentioned, should be paid out of another appropriation made by the city “to pay any decree versus the city and to enable the comptroller to comply with any decree that may be rendered” in"the present cause. One of the appropriations was for $352,060, “for repayment to old law special assessment fund amounts illegally transferred at various times”—an implied confession, it may be remarked, that such illegal transfers had been made. If there were illegal transfers of trust funds which should be applied on these vouchers, as the decree seems to have found, no reason appears why the city should not pay interest on money thus illegally borrowed, as well as upon any other borrowed funds. As to the amounts due from the city for public benefits and upon its purchases at tax sales applicable to the vouchers in question, no reason is perceived why the city, if liable for the principal, should not pay interest. As to the public benefits assessed against the city, the question of interest has been settled in 215 Ill. 235-239, above cited. The principle there stated is, we think, applicable in like manner, in case of tax purchases by the city of property sold for non-payment of these assessments, which the city is by law authorized to purchase (E. S. of 1893, p. 274, sec. 159) and for which purchases it has not paid. (2) It is said in behalf of the city that the special assessment vouchers in controversy “are payable solely out of their respective special assessment funds and the city of Chicago cannot legally pay them out of its general funds,” that there are no such assessment funds in its hands, and the city has no power to appropriate any for payment of these vouchers. The provisions of the special assessment law referred to are found in sections 49 and 64, article IX of the Cities and Villages Act. The first of these (section 49) provided that “all persons having any contracts with the city or village and who agree to be paid from special assessments shall have no claim or lien upon the city or village in any event, except from the collections of the special assessments made for the work contracted for.” Section 64 further provided that “any persdn or persons accepting vouchers as provided herein for work done or performed upon local or public improvements shall have no claim or lien upon the city, incorporated town or village, in any event for the payment of said vouchers or the interest, except from the collection of the installments for which said vouchers are issued and provided, that this section shall apply to all holders of any of said vouchers, whether the original contractors or their assigns.” To the same effect is a provision in section 9 of the Local Improvement Act of 1897. It is said by counsel for the city that these provisions of the special assessment law have been held valid and binding (City of Alton v. Foster, 207 Ill. 150), and that “the city is powerless by ordinance to make itself liable in the face of the express provisions of the statute” (City of Chicago v. Brede, 218 Ill. 528), and cannot appropriate funds to be used in payment of special assessment vouchers or bonds where there is a deficit in special assessment funds. The city’s contention is stated more fully as follows: that “appellee cannot be allowed to recover in this proceeding from the general funds of the city, but is limited solely and exclusively to recovery from the special assessment funds against which its vouchers are issued;” that “if there are no such funds actually in existence, but instead there are deficits in the warrants of the funds, then clearly the appellee cannot maintain this suit. It must seek relief by some other remedy.” It is further said to be “an undisputed fact in the record that there are no funds to the credit of these warrants,” and that “there is no evidence whatever that the city in its corporate, capacity used any of the special assessment funds for its corporate uses;” that appellee is seeking to recover “on the' pure fiction that there should be funds in the several warrants when in point of fact there are none.” There is no material controversy as to the force and effect of the statute referred to. The material question is one of fact. We deem it unnecessary to set out in detail the evidence, all of it derived from witnesses in the employ of the city, as to the condition of the funds applicable to each of the warrants here in controversy. It is, however, far from being an “undisputed fact” that the city does not hold funds to the credit of these warrants upon a proper accounting. Taking one of the warrants as an illustration, there is evidence tending to show in reference to “Special Assessment Voucher Warrant No. 17352, Estimate No. 1. and Final of Installment No. 5,” which voucher is described in the statement hereinbefore made, that upon the fifth installment of said Warrant “No. 17,352,” the city has collected $11,380.73; that it has paid out therefrom $9,465.92, leaving a balance on hand of..........'..$1914,81 The city, it is said, has appropriated for pub-lie benefits assessed against it on account of the improvement,.................................................... 7151.11 Making a total fund of........................................ $9065.92 The balance claimed to be due appellee on this voucher is $6955.69; showing apparently an amount in the hands of the city applicable in payment of this fifth installment of over $2,000 in excess of the amount of the voucher. The city, however, introduced evidence tending to show that the record of the Board of Local Improvements shows the condition of warrant No. 17352 as a whole—not the several installments— to be as follows: Principal collected on the warrant,............ $49,424.61 Interest, ............................................................ 7,702.66 Making a total of................................ $57,127.27 Less discount allowed by city collector........ 68.42 Leaving a net amount collected of—. $57,058.85 The debits appear to be as follows: Vouchers issued, including the one in controversy, ......................................................... $50,686.51 Interest, ............................................. 8,489.49 Costs, .................................................. 3,221.07 Overpaid interest refunded,............ 37.17 Total, .......................................... $62,434.24 This statement leaves an apparent deficit of $5,375.39 from which, deducting what are called uncollected public benefits of $1,818.51, the apparent net deficit would be $3,556.88, provided appellee’s voucher of $6,955.69 should be paid in full. Until it is so paid there is apparently, even on this showing, a balance of over $3,000 applicable, for aught that appears, on account of complainant’s voucher. There is, however, so far as we discover, no evidence tending to show that the disbursements apparently made according to such record were actually made, or that they are properly chargeable to account of that warrant. In the case of this warrant, as in each of the other warrants, the amounts collected by the city on the particular installments for which complainant holds the vouchers in controversy, including amounts appropriated by the city to pay the public benefits and amounts represented by tax certificates held by the city, are apparently, as there is evidence tending to show, more than sufficient to pay all the complainant’s vouchers in controversy. If, as claimed by complainant, the accounts should be so made up as to show the proper credits and disbursements as to each of the several installments, and that if there have been over payments made by the city upon any installment (as to which there is no competent evidence apparently), such over payments could not properly be charged to the other installments, then it would be unnecessary to inquire what over payments, if any, there were as to- any installment except those- against which the vouchers in controversy have been drawn. As to these last we are of opinion, as above indicated, that the evidence tends to show a balance on hand in excess of the amounts claimed by complainant on each voucher. We are inclined to concur in complainant’s contention that each installment is properly chargeable only with its own expenses. The provisions of the statute applicable as to installments may be found in sections ,168a and 168i, pages 276-277, E. S. of 1893. In these sections it is provided in substance that from the first payment for any improvement when 'collected “shall first be paid all the costs of making the said assessment, including court costs,” and that the remainder be paid “on the contract for said work.” The amount remaining due upon the contract for the improvement is then to be divided into four equal parts and vouchers issued “for each part, payable in the same order and manner that the installments are payable,” and to bear the same rate of interest. These provisions seem to contemplate no charges other than such as properly pertain to the collection and payment of the installments themselves against the “four equal annual installments” into which “the amount remaining due upon the contract for said improvement” is to be divided after first paying “all the costs of making the said assessment, including court costs.” It is not enough therefore for the city as trustee of the funds collected on these assessments, including such sums as are due and owing by the city itself to such funds, merely to show—as in case of Warrant 17,352, for example—that it has made a lump charge of $3,221.07 against the assessment as a whole for “costs.” It must be able to show the facts from which the propriety of these disbursements can be determined. What is said in City v. The People, 215 Ill. 235-239, supra, is applicable in substance; namely, that it is the duty of the city to “set out clearly and definitely in detail all of its items of receipts and expenditures so that the court can see that it is not the fault of the municipality that the debt is not paid.” .This the evidence entirely fails to do. The city has, we think, clearly failed to show that it has not on hand “from the collections of the special assessments made for the work contracted for,” sufficient money to pay the vouchers in controversy. (3) In certain of the warrants there have been “abatements” made by the city after confirmation of the assessments and before their collection. These seem to have been made by the city in administering the fund and not by the court. It is urged in behalf of the city that such reductions “cannot be considered in contemplation of law as having been collected and as constituting an available part of the special assessment fund. In case of one of the warrants in controversy these reductions amounted to over $4300. It is conceded that these abatements were irregular and improper, that no official of the special assessment department of the city could “reduce or modify in any way the assessment as confirmed by the court.” It appears to be contended, however, that the only way in which the city can be compelled to collect and account for these abatements is by mandamus, that the money not having been actually collected, no claim therefor can be made against the city. In view, however, of the fact that the decree in this case does not require the city to pay complainant any money on account of the sums remaining so uncollected, it is unnecessary further to consider the question. • (4) It is urged that where a municipality in default of other bidders becomes the holder of tax certificates on property sold to enforce the collection of delinquent special assessments, such tax certificates cannot be treated as such cash assets in the special assessment funds; and that a municipality is not liable out of its general funds to holders of special assessment vouchers for the amount of such tax certificates. It appears that the city has appropriated money to pay “for property purchased by the city in special assessment proceedings.” As we have said, the law authorizes the city to make such purchases. If such sale is made to a private individual he would be required to pay the amount bid at the tax sale upon receiving his certificate of purchase or a tax deed. No reason is apparent why there should be any distinction between a municipality and an individual in that respect. It is said that before seeking to hold the city liable for amounts due upon such purchases, resort must be had “to the proper remedy to compel the city to take such action,” referring apparently to mandamus. We do not concur in this view. The city has not refused, so far as appears, to pay for these purchases. On the contrary, an appropriation for the purpose has been made and the money set apart. Its application to the proper assessment fund is a mere matter of bookkeeping, an administrative function, for which no writ of mandamus has so far appeared to be necessary. In City of Chicago v. The People, 215 Ill. 235-236, before referred to, the petition for mandamus prayed for the writ to compel the city “to appropriate in their next annual appropriation ordinance such sum or sums of money as were necessary to pay such public benefits and interest thereon. ’ ’ The writ was issued 1 ‘ commanding respondents to make an appropriation.” This the city has done and has paid, as is conceded in this case, amounts so appropriated. An appropriation to pay for such purchases at tax sales having been made, no reason as yet appears why payment could not if necessary be enforced by judgment. In case of unliquidated demands ‘ ‘ and in cases where the liability is doubtful and disputed, mandamus is not an appropriate remedy in the first instance. The claim must first be established and liquidated by a judgment, and then if the proper authority refuses to provide for its payment, mandamus lies to compel it to do so.” A. & E. Ency. of L., 2nd. ed., vol. 19, p. 793. We are unable to concur in appellant’s contention that the city had no right nor power to make such appropriation for tax certificates on land sold for unpaid special assessments, which it is expressly authorized by statute to so purchase. In support of this contention we are referred to City of Chicago v. Brede, 218 Ill. 528, which is not, we think, in point. The case at bar is not one where the city “has sought to make itself liable in the face of the express provision of the statute.” In making such appropriation the city was, we think, using reasonable diligence to cause the assessment to be collected and the vouchers paid as the statute requires. For reasons indicated the decree of the Superior Court will be affirmed. Affirmed.