Wood v. Village of Rockwood , 311 Mich. 381 ( 1945 )

The order of the trial court denying mandamus should be affirmed. The facts in the case are set forth in the opinion of Mr. Justice BOYLES. I fully agree with him in holding that the judgment against the Village of Rockwood, as limited in its recovery, is in no way binding upon defendants. However, I find no statutory power whatsoever to levy an assessment to pay for the past-due and accumulated interest on the bonds that were issued to pay in full the cost of the sewer. Had the bonds been issued under the particular provisions of the drain law, there would have been authority to levy an additional assessment, for section 4940, 1 Comp. Laws 1929 (Stat. Ann. § 11.104) makes a provision for interest. On the other hand, neither the statute nor the village charter makes any provision for reassessments or additional assessments to pay interest that might thereafter become due on bonds when the cost of the construction or the improvement (not a drain) was fully covered by the original assessment.

Chapter 11, § 40 (par. 236), of the village charter provides as follows:

"When the moneys provided in accordance with the provisions of this chapter prove insufficient to pay the costs of the special assessment improvement for which they were provided, the council within the limitations prescribed for special assessments, may make an additional pro rata assessment on the special assessment district to supply the deficiency. Such additional special assessment shall be made in the same manner as the original assessment and shall be made in such number of instalments as the council may deem advisable, such number of instalments not to exceed the number of instalments of the original assessment outstanding and not yet due, which additional special assessment shall be paid in the same manner as the instalments of the original assessments."

This follows provisions of section 1624, 1 Comp. Laws 1929 (Stat. Ann. § 5.1360), which provides:

"Should any special assessment prove insufficient to pay for the improvement or work for which it was levied, and the expenses incident thereto, the council may, within the limitations prescribed for such assessments, make an additional pro rata assessment to supply the deficiency; and in case a larger amount shall have been collected than was necessary the excess shall be refunded ratably to those by whom it was paid."

We cannot read additional provisions into either the statute or the charter. It becomes unnecessary to discuss the other grounds for denying the writ.

Several questions raised in the opinion for reversal require an answer. Frequently because of miscalculations or extras, the original estimate of the cost of an improvement is insufficient. An additional assessment to pay such cost is provided for by statute. 1 Comp. Laws 1929, § 1624. There is no authority to levy an additional assessment years after the last instalment of the original assessment became due in order to pay interest many years in default. That is not the cost of an improvement, which was fully paid years prior to the bringing of the present proceeding.

The record does not indicate that investors would not have bought the bonds at the time of the issue, had they known that an extra assessment for unpaid interest could not be levied many years later. The record does show that the bonds were payable from assessments on properties at their value in 1929 just before the depression was fully under way; that as municipal bonds they were tax exempt; that they were payable in five annual instalments; that they bore interest at the rate of 6 per cent. per annum until due, and at a much higher rate thereafter; that they were issued long before there were any tax relief acts. The record does not show whether or not defaults in bonds of similar character were rare. We mention, without passing on, the following question in the event of reversal of the lower court. Should owners, purchasers, or mortgagees of lots on which the principal and interest as provided by law had been paid in full as shown by the public record be now called upon to pay an additional assessment, and if not, why should others who had not paid all of the interest be obliged to pay such additional assessment?

The order of the trial court denying the petition for writ of mandamus should be affirmed, but without costs, as a public question is involved.

BUSHNELL and REID, JJ., concurred with BUTZEL, J.