Morris, J.
The plaintiffs in this action are the owners and holders of a special assessment warrant issued by the city of Mandan in connection with the payment of the costs of construction of a sewer system in sewer district No. 6 of that city.
The warrant is dated November 13, 1930, in the sum of $150, and is payable on the 13th day of November, 1939. It bears interest at the rate of 7 per cent per annum,' payable semiannually.
The warrant contains, among others, the following provision: “The faith and credit of the city of Mandan, North Dakota, are hereby irrevocably pledged to levy the special assessments for the total cost of the improvement on account of which this warrant is issued, to cause the same to be collected and paid into the said fund applicable to the payment thereof, to levy a tax upon all taxable property of the city for the payment of any deficiency which may exist in said fund upon the maturity of all warrants of this series, and to cause each step authorized by law to be taken for the punctual payment of the principal and interest of this warrant at maturity.”
By this proceeding the plaintiffs by mandamus seek to compel the city of Mandan to levy a general tax upon all the taxable property within the city to pay a deficiency which now exists in the fund on which this warrant is drawn. This deficiency arose because of the failure of certain property owners to pay the special assessments levied against their property. The financial condition of the city at any time is not disclosed; and no question is raised involving § 183 of the Constitution of North Dakota, which prescribes debt limits for municipalities.
At the time the warrant in this case was issued, § 3716, N. D. Comp. Laws 1913, had been amended by chapter 17-1, N. D. Session Laws 1923, and again amended.by chapter 171, N. D. Session Laws 1929. Both the 1923 and 1929 amendments contain this provision: “When
ever all special assessments collected for a specific improvement are insufficient to pay the special improvement warrants issued against such improvement with interest, the city council or city commission, as the case may be, shall upon the maturity of the last special improvement warrant, levy a tax upon all the taxable property in the city for the .payment of such deficiency.”
Prior to its amendment, § 3716 provided that “whenever all special assessments levied for a specific improvement shall have been collected and applied in payment of the warrants issued for such improvement, and a deficiency remains, the city council shall levy a tax upon all the taxable property in the city for the payment of such deficiency.”
In case No. 1, ante, 134, 296 N. W. 34, involving warrants issued prior to the amendment, we hold that no duty devolves upon the city to levy a general tax to pay a remaining deficiency until all special assessments levied for the specific improvement for which the warrants in question were issued have been collected and applied. In that case it appeared that the special assessments had not all been collected. Consequently, the condition precedent to the right to levy the general tax had not been met. Section 3716, in its original form, does not provide for the levy of a general tax to pay deficiencies growing out of the failure of property owners to pay their special assessments.
This case involves the effect of the amendments of 1923 and 1929. In determining the effect of the amendments, we again examine the statute to determine what the intention of the legislature was. The very fact that the legislature amended the statute and drastically changed its wording indicates with certainty that the legislature intended to change the meaning of the statute.
A city may become generally liable upon special improvement warrants unless the statute forbids. Pine Tree Lumber Co. v. Fargo, 12 N. D. 360, 96 N. W. 357; Dakota Trust Co. v. Hankinson, 53 N. D. 356, 205 N. W. 990. It follows that the legislature may by statute render the city liable either generally or for certain deficiencies arising in special assessment funds.
Prior to the enactment of chapter 62, N. D. Session Laws 1905, of which the. original § 3716 was a part, the plan of making special improvements provided by the statute was such as to “enable a city to make special improvements upon its streets, and to reimburse itself for
the cost of the same through special assessments of property abutting upon and benefited by the improvements, to the extent of assessments made, and this without cost to the general taxpayer.” Pine Tree Lumber Co. v. Fargo, 12 N. D. 360, 96 N. W. 357.
In that case, however, it was further said: “The paving of its streets was a municipal improvement contracted for by the city, and, when completed, of general utility. Unless there is something in the general incorporation act or general statutes which otherwise directs, or by necessary implication limits the right of a city to become generally liable upon its contracts for this class of improvements, or something in the contract with the city by which the claimant is limited in his recovery to the special funds to be raised from the assessment of abutting property, we can see no reason why the city cannot be held generally liable for debts it has thus contracted.”
The above case was decided in 1903. In 1905 the legislature passed chapter 62 of the Session Laws of that year, whereby it set up a new system providing for special improvements.
Concerning this chapter, we said in Schieber v. Mohall, 66 N. D. 593, 609, 268 N. D. 445, 453, that “there is nothing plainer in the whole chapter than that the city is not to be held responsible generally for the cost of the improvement. The cost is to be paid by the property benefited, from a fund raised by taxation of said property, and from no other source.” See also Bankers Trust
&
Sav. Bank v. Anamoose, 51 N. D. 596, 200 N. W. 103. That was the law prior to the amendment of § 3716 by chapter 174, N. D. Session Laws 1923.
A number of constitutional questions have been raised. It is urged that if the statute in question be construed so as to render the city generally liable for deficiencies in its special improvement funds, and to authorize the levy of a general tax for the payment of such deficiencies, it violates § 13 of the North Dakota Constitution, and § 14 of the United States Constitution. These sections embrace what is generally known as the due process of law clause.
In support of this contention, it is urged that the tax is levied for a private purpose; and further, that the general taxpayer has had no notice or opportunity to be heard regarding the validity or the extent of the tax to be imposed upon his property.
In considering this same objection to the levy of a general tax to
create a revolving fund to pay delinquent assessments on property purchased by a city at a delinquent assessment sale, the supreme court of California, in the case of American Co. v. Lakeport, 220 Cal. 548, 560, 32 P. (2d) 622, 627, said: “The theory is that if all the property owners in the city are to be taxed to meet the delinquent assessments, those outside the district are, in effect, being subjected to an assessment in the guise of a tax; and that such an assessment is invalid where thev have had no notice or hearing as to any benefits which they are to derive from the particular improvement. The conclusion of the lower court that the tax was, in fact, an assessment, is unwarranted. The overwhelming weight of authority supports such a tax on two chief grounds: First, where a tax is imposed upon all property without regard to benefits received, it is a tax and not a special assessment, regardless of its purpose; and second, where a general tax is levied to meet delinquencies in assessments for local improvements, there is no necessity for notice and hearing.”
It may also be observed that the general tax is to be imposed by the same authority that imposes other general taxes of the city. This authority consists of the officers duly chosen by the electors of the city and authorized by the statute to act for the city. Certainly it cannot be contended that “due process” requires each taxpayer to be individually consulted relative to the levying of a tax of a general nature upon his property.
It is further urged that the levy of special assessments based upon benefits and a subsequent general levy to take care of deficiencies constitutes double taxation, at least as against those taxpayers who have paid their special assessments. This question was considered at length in Klemm v. Davenport, 100 Fla. 627, 129 So. 904, 70 A.L.R. 156. In that case it was held that although special assessments had been imposed to pay the obligation of a municipality arising out of the issuance of bonds for street improvements, a taxpayer may also be required to pay an additional amount to make up deficiencies caused by the neglect or inability of other taxpayers to pay their assessments; and that the imposition of an ad valorem tax to make up such deficiencies does not impinge on constitutional inhibitions against double taxation or the requirement of equality and uniformity; and that such ad valorem taxes do not amount to the taking of property without due process.
Another constitutional objection urged is that if the statute in question is construed to permit the levy of general taxes to pay special assessment deficiencies, it violates § 185 of the North Dakota Constitution, which prohibits cities from loaning or giving their credit to, or making donations to or in aid of any individual, association, or corporation, except for the reasonable support of the poor.
An examination of the books discloses that this question has also been passed upon by other courts. Stanley v. Jeffries, 86 Mont. 114, 131, 284 P. 134, 138, 70 A.L.R. 166, involved the constitutionality of a statute empowering a municipality to levy a general tax to create a revolving fund for the purpose of securing the prompt payment of special improvement district bonds or warrants. The court says:
“But the laying out and improvement of streets, alleys, sewers and the like is essentially a public purpose benefiting the entire community, although the work is done in but a portion of the city, and, in the absence of any legislative restriction, each portion of the city might be thus improved at the general public expense, and no taxpayer could be heard to complain thereof. In other words, in order to erect any public improvement by the creation of special improvement districts, both general benefits to the municipality and special benefits to particular property must be conferred — the special benefit to adjacent property is but incidental to the general benefit to the city; it could not otherwise lawfully be created.
“When, therefore, the legislature provided that, as to special improvement districts created in the future, a fund shall be created to insure the prompt payment of bonds and warrants issued in payment of such improvements, it but modified the special improvement district law to impose upon the general public, within the municipality, a conditional obligation to pay a small portion of the cost of erecting the public improvement, whereas it might have, lawfully, imposed a much greater burden upon the municipality.”
It is urged that the case of Martin v. Tyler, 4 N. D. 278, 60 N. W. 392, 25 L.R.A. 838, is applicable to and decisive of the constitutional validity of the statute in question. Martin v. Tyler, supra, has both points of similarity and points of difference when compared with the situation now before us. In that case, “An act to provide for establishing, constructing and maintaining drains in this state” was held to be
violative of § 185 of tbe Constitution. Tbat statute provided for tbe appointment of a drain commission and vested in it the powers of tbe act. Tbe members of tbe commission were required to take an oath of office and give a bond. It provided for levying assessments on lands benefited, for tbe payment of tbe cost of constructing drains, and provided tbat tbe assessments must equal tbe entire cost of tbe drain with 10 per cent added to cover contingencies, wbicb must be levied and collected in one year. Another section provided for tbe issuance of bonds by tbe county, tbe proceeds of wbicb were turned over to tbe drainage commission to defray tbe cost of tbe ditebes. Special assessments were then to be divided into as many parts as tbe bonds bad years to run, 'and one part collected each year. The proceeds of tbe assessments were to be placed in a sinking fund for tbe payment of tbe bonds and interest. Tbe court held tbat this latter section violated § 185 of tbe Constitution, and said: “By this means tbe payment, wbicb must otherwise be made in one year, may be extended over twenty years. This indulgence to tbe corporations and persons benefited and specially assessed is obtained by means of tbe credit of tbe county. Its bonds are issued under tbe drainage act, and must so state on their face. Tbe proceeds of tbe bonds go, not into tbe control of tbe county commissioners, but at once into tbe drainage fund, controlled exclusively by tbe drain commission ... no refinement of construction or technical rule of law can make this transaction less than a loan of credit of tbe county to tbe parties primarily liable for tbe cost of tbe drain.”
It was further held tbat tbe burden was placed by tbe act upon the property owners to pay for tbe drain, and tbat “all tbe county can do is to obtain for them an extension of tbe time of payment by tbe loan of its credit.” Tbe question of whether tbe county could have used public funds for constructing tbe drainage ditebes in whole or in part was not presented, and was not considered by the court in tbat case. Neither does tbe court decide whether tbe construction of tbe drainage ditebes is a public purpose. Under the statute considered in tbat case, tbe construction of drainage ditebes was placed under tbe jurisdiction of and collection was made by tbe board of drainage commissioners and not tbe board of county commissioners, who are the regularly constituted governing body of tbe county. The county issued its bonds^ and raised
the money. The money was turned over to and spent by the board of drainage commissioners.
Under the statute before us, we find that although special assessments may be levied upon property to pay in the first instance for the improvements in question, those improvements are contracted for and the assessments levied by the governing body of the city and its fiscal agents. Separate officers are not provided for the improvement districts. Although the city is not generally liable on contracts for special improvements, “All contracts entered into for any work, provided for in this article shall be entered into in the name of the city.” Comp. Laws 1913, § 3709. The improvement districts are represented by no special board or commission, and the cost of the improvement may be paid in the first instance partly by general taxation. The purpose, as we have heretofore pointed out, is a public purpose. The fact that special benefits may be derived by and special assessments levied upon private property does not destroy this public purpose. Since the county could have created this improvement from its public funds and levied taxes therefor on the basis of a public purpose, it follows that the expenditures of public funds for such a purpose, even upon the happening of a contingency, is not forbidden by § 185 of the Constitution. In the Tyler Case, the legislature determined that in the first instance, private property benefited by the drain must pay for the cost of the drain. Ten per cent was added to the estimated cost to cover contingencies. All this was to be paid in one year, but as the court said, this might often prove a hardship, so it was provided that the county might lend its credit even though the county, as such, had nothing to do with the project. Such a loan of credit was held to be a violation of the Constitution. There was no question of contingent liability on the part of the county. Through its credit it issued the bonds and paid for the drain in the first instance. The property owners paid the county back. In the case of the statute now before us, the city issued warrants which it required the property owners who are benefited by the improvement to pay through property assessments, but these assessments did not constitute a personal liability. Special assessments are not the personal obligation of the
owners
of the property assessed. They are merely liens thereon. Even in the absence of any agreement on the part of the city to
become contingently liable for tbe deficiency, the city, merely by the negligence of its officers, may become liable on the warrants. Pine Tree Lumber Co. v. Fargo, 12 N. D. 360, 96 N. W. 357; Dakota Trust Co. v. Hankinson, 53 N. D. 356, 205 N. W. 990. The statute we are considering broadens the liability from one of a special contingency to that of a general contingent liability for any deficiency whatever the cause.
The differences of statute and fact between the Tyler Case and the one at bar rob the Tyler Case of controlling force with respect to the situation now before us. The expenditure of money raised by general taxation in the payment of deficiencies resulting in funds set apart to pay special assessment warrants does not constitute a donation, nor does the obligation to levy such a tax amount to a loan of credit by the city in violation of § 185 of the state Constitution.
The fact that the city has determined that certain benefits have accrued to private property, does not preclude the existence of general benefits or their recognition in the form of a contingent liability. “There is hardly any so called special improvement which does not redound to the benefit of the whole community, if, indeed, it benefits anyone at all.” Robertson Lumber Co. v. Grand Forks, 27 N. D. 556, 147 N. W. 249.
Whether the expense of making special improvements shall be paid out of the general fund of the city or be assessed in whole or in part against property specially benefited is primarily a question of legislative expediency. Dillon, Municipal Corporations, 5th ed. §§ 1431, 1439.
The various arguments advanced as to the unconstitutionality of a statute requiring the levy of a general tax to meet deficiencies resulting from the failure of special assessment collections lose their virility when we consider that we are dealing with the question of legislative power under the Constitution, in light of the unquestioned fact that the legislature might have provided for the payment of the type of improvement involved in this case by general taxation without notice or hearing as to individual benefits resulting from the improvement. The legislature might have authorized municipalities to incur a general primary indebtedness for the purpose of creating such an improvement. It therefore follows that the legislature may provide for
these local improvements to be paid for, in whole or in part, by general taxes; or to be paid primarily by special assessments, with a provision to care for deficiencies by general taxation, as it did by the 1923 amendment.
'. This general power of the legislature to so provide is recognized in many cases, including the following: State ex rel. Bowman v. Allen County, 124 Ohio St. 174, 177 N. E. 271; Wicks v. Salt Lake City, 60 Utah, 265, 208 P. 538; Comfort v. Tacoma, 142 Wash. 249, 252 P. 929; Crescent City v. Moran, 25 Cal. App. (2d) 133, 77 P. (2d) 281; Dinneen v. Rider, 152 Md. 343, 136 A. 754; Stanley v. Jeffries, 86 Mont. 114, 284 P. 134, 70 A.L.R. 166; Klemm v. Davenport, 100 Fla. 627, 129 So. 904, 70 A.L.R. 156, and American Co. v. Lakeport, 220 Cal. 548, 32 P. (2d) 622—supra.
As was said in Pine Tree Lumber Co. v. Fargo, 12 N. D. 360, 96 N. W. 357, supra, the paving of streets is of general utility. It may also be said that the construction of a sewer system is of general utility to the entire population of the city. The easy and sanitary disposition of sewage afforded by a sewage system is conducive to the health and comfort of the general population of the city, even though the more direct and proximate benefits accrue to the owners of property abutting on the sewer mains. The power to construct and maintain sewers is conferred by the legislature. Comp. Laws, N. D. 1913, §§ 3697 and 3702. This power should receive a liberal construction in favor of the municipality. McQuillin, Municipal Corporations, § 1545.
The question of the extent to which the city may go in bearing the expense of such a system through general taxation lies within the field of legislative discretion; and its reasonable exercise, even to the extent of permitting or requiring the city to assume certain deficiencies that may arise in the collection of assessments levied against private property, does not invade constitutional rights of general taxpayers of the city.
One more important constitutional objection remains to be considered. It is whether the statute is violative of § 184 of the state Constitution. This section provides that “any city, county, township, town, school district, or any other political subdivision incurring indebtedness shall at or before the time of so doing, provide for the
collection of an annual tax sufficient to pay the interest and also the principal thereof when due, and all laws or ordinances providing for the payment of the interest or principal of any debt shall be irrepealable until such debt be paid.”
This section is mandatory. The legislature cannot authorize cities to do that which the Constitution forbids. It is contended that the statute in question creates a liability upon the city to pay deficiencies which may rise in special assessments; that the liability is created at the time of the issuance of the warrants, and since no provision is made for the levy of a tax until a deficiency occurs, § 184 is thereby violated. ;
Under chapter 174 when the warrants are issued a contingent liability is created which may develop into an absolute liability upon the happening of a contingency, i. e., a deficiency in the fund against which the warrants are issued at the time the last warrant matures. The appellants contend that the liability thus created, being contingent, does not constitute an indebtedness within the meaning of § 184 until the happening of the contingency. There is no question but that the liability of the city at the time of the issuance of the warrants is contingent. Thus we are met with the proposition as to whether this liability is an indebtedness of the city within the meaning of § 184 from the beginning or does it become an indebtedness only when and if the contingency occurs. This specific question has never been directly passed upon in this jurisdiction. Some questions concerning obligations that come within the provisions of §§ 182 and 183 of the Constitution, being debt limit sections, have been considered in other cases. In State ex rel. University & School Lands v. McMillan, 12 N. D. 280, 96 N. W. 310, this court passed upon the constitutionality of an act which authorized the issuance of bonds for the purpose of procuring funds to erect and equip buildings for the State Normal School at Valley City, and appropriated a sufficient portion of the interest and income from land grant funds allocated to the support of the institution to pay the principal and interest of the bonds. The law further provided that “if there shall not be sufficient money in each of the said funds to pay such interest there is hereby appropriated a sufficient amount to meet such deficiencies.”
The court held the act to be invalid,.saying: “Its violations of the
following provisions of the Constitution are manifest: (1) It authorizes the creation of a state debt in excess of the debt limit and contrary to § 182 of the Constitution; (2) it authorizes the creation of a state debt, and contains no provision ‘for levying an annual tax sufficient to pay the interest semi-annually and the principal within thirty years/ contrary to the requirements of the section last referred to.”
In Wilder v. Murphy, 56 N. D. 436, 218 N. W. 156, the court considered the constitutionality of an act which authorized the state board of administration to convey for terms not exceeding fifty years to institutional holding associations, sites for dormitories at various educational institutions. The associations were authorized to construct dormitories on these sites and issue bonds to procure the necessary funds. To secure the payment of these bonds, the associations were authorized to mortgage the property and pledge the rentals. In holding the act violative of § 182 of the Constitution, the court said: “Though the statute provides that the state shall incur no liability by reason of anything that may be done by the board under the authority thus conferred, and though no bonds of the state are issued, nevertheless the fact remains that the property of the state is mortgaged and pledged and to that extent there is an obligation to pay on the part of the state. Thus it seems to us there is created a debt within the meaning of that term as used in the constitutional prohibition. In our judgment the case of State ex rel. University & School Lands v. McMillan, 12 N. D. 280, 96 N. W. 310, by its reasoning and its approval of the doctrine of the cases therein cited is conclusive on this question.”
A later case (State ex rel. Kaufman v. Davis, 59 N. D. 191, 229 N. W. 105) involved another legislative act providing for the construction of dormitories. That act was held to be so different from the one involved in Wilder v. Murphy, 56 N. D. 436, 218 N. W. 156, supra, that it was not governed by that case and did not violate § 182 of the Constitution.
In Lang v. Cavalier, 59 N. D. 75, 228 N. W. 819, the court held that a city does not create an indebtedness within the purview of § 183 of the North Dakota Constitution by entering into a contract to purchase and install equipment for a public utility where such con
tract provides that the obligation created is payable only from tbe net ■revenues of the utility, and no general obligation of tbe city is entailed. The court said: “In the instant case, however, a consideration of the contract discloses that no property of the city is pledged. No money derived from taxation is to be used in building up the special fund out of which the pledge orders are to be paid. It is true that this fund is created out of the receipts arising from the operation of the plant which was purchased, but it seems to us that the fund is at least analogous to a special assessment fund, and the obligation to be paid may be likened to a special assessment obligation. This court has heretofore held that obligations payable out of special assessments are not considered public debts within the meaning of the term debt as used in the constitutional prohibitions against incurring indebtedness. See Wilder v. Murphy, supra; State ex rel. University & School Lands v. McMillan, 12 N. D. 280, 96 N. W. 310, supra; Vallelly v. Park Comrs. 16 N. D. 25, 111 N. W. 615, 15 L.R.A. (N.S.) 61. The purpose of the provision as contained in section 183 of the Constitution limiting the debt of certain municipalities 'is to prevent such municipalities from improvidently contracting debts for other than ordinary current expenses of administration, and to restrict their borrowing capacity:’ Anderson v. International School Dist. 32 N. D. 413, 156 N. W. 54, L.R.A.1917E, 428, Ann. Cas. 1918A, 506. Such provisions are intended To serve as a limit to taxation and as a protection to taxpayers.’ 6 McQuillin, Municipal Corporations, 2d ed. § 2364. There is nothing inconsistent with these purposes in the contract made by the city of Cavalier with the Eairbanks-Morse Company.”
The holding in this case was later approved in Thomas v. McHugh, 65 N. D. 149, 256 N. W. 763. The decisions in these cases are in accord with the great weight of authority as disclosed by notes found in 72 A.L.R. 687 and 96 A.L.R. 1385.
In Vallelley v. Park Comrs. 16 N. D. 25, 111 N. W. 615, syllabus 1 states: “Debts of a city contracted for paving and sewer purposes are not to be computed in ascertaining whether the debt limit has been exceeded. There is no general liability against the city for such indebtedness, except for the one-fifth portion of the cost of paving.”
From the foregoing cases it may be said that North Dakota has
adopted what - is generally termed as the “special fund” doctrine as applied to the obligations incurred by municipalities or the state itself with regard to special assessment funds for paving and sewers, contracts for the purchase of electric light plants and the erection of dormitories at state educational institutions. This doctrine may be stated as an established rule of law. It is that, bonds, warrants, contracts, or other obligations issued or entered into by the state, or its municipalities, when specially authorized by statute, do not come within the meaning of the words “debt” or “indebtedness” as used by the debt limitations provisions of the Constitution if these obligations are secured by and payable exclusively from revenues to be realized from public property acquired with the proceeds of the obligations or assessments on private property benefited by the special improvements.
This rule is clearly applicable to the word “indebtedness” as used in § 184 of the Constitution. If the obligations are to be paid only from special funds, it would be wholly superfluous to also require the levy of an annual tax under the provision of this section of the Constitution. Payment of the obligations having been provided without resort to general taxation, they are not such obligations as are contemplated by that section.
The next step in our consideration of this matter springs from the situation that arises when provision is made for a special fund which on its face is or will be adequate to pay the obligations in full and in addition thereto the law also provides that if the special fund should prove insufficient, the deficiency shall be made up by the levy of a general tax.
The question of the validity of a contingent liability in excess of the debt limit of a city arose in Bismarck Water Supply Co. v. Bismarck, 23 N. D. 352, 137 N. W. 34. In connection with a franchise to lay water mains and pipe, the city agreed that in event of a change in the grade of the street or highway, that might necessitate a lowering of the mains, the city would reimburse the water supply company for the expensé of such a change. The city contended that it thereby incurred an indebtedness in violation of the constitutional debt limit prescribed by § 183 of the Constitution. In rejecting that contention, the court said: “The contention of appellant, to the effect that by the
contract in question, the defendant city undertook to bargain away a part of its governmental powers, is, we tbink, for tbe foregoing reasons, without merit. Nor do we deem its contention sound, to tbe effect that by such contract tbe city incurred an indebtedness in excess of tbe constitutional debt limit. Tbe presumption is in favor of tbe validity of tbe acts of tbe defendant’s officers. Furthermore, tbe answer sets forth no sufficient facts as a basis for this attempted defense. No indebtedness was incurred by tbe ordinance and contract in question in so far as expenses such as those here sued for are concerned. As to this feature of tbe contract tbe defendant city merely incurred a contingent future liability.” Generally speaking, the special fund doctrine does not permit tbe fund to be fed from general or other revenues in addition to those arising from tbe specific improvement contemplated. Garrett v. Swanton, 216 Cal. 220, 13 P. (2d) 725. This limitation, however, is subject to an exception that has been recognized in a number of cases. Tbe exception is based upon tbe theory of Bismarck Water Supply Co. v. Bismarck, supra. Where tbe obligation of tbe municipality rests wholly upon a contingent liability, there is no debt created until tbe contingency occurs.
In Comfort v. Tacoma, 142 Wash. 249, 252 P. 929, tbe court bad before it a statute relating to tbe creation of a fund whereby tbe city guaranteed local assessment bonds by accepting unpaid bonds from tbe holders and levying a tax therefor. One of tbe questions raised was whether bonds issued under these provisions of tbe law became a debt of tbe city, for if they were, they would increase tbe debt of tbe city beyond the statutory debt limit without a vote of tbe people; and tbe statute authorizing their issuance would be unconstitutional. The amount that could be levied for the guaranty fund in any one year was limited to 5 per cent of all outstanding local improvement bonds. Tbe court reached the conclusion that the statute created “only a contingent liability as far as tbe city is concerned, and in no sense a debt proper.” Tbe constitutionality of tbe same statute was again challenged upon tbe same grounds in Kelly v. Sunnyside, 168 Wash. 95, 11 P. (2d) 230, and tbe court adhered to its bolding in the former case. In Lillard v. Melton, 103 S. C. 10, 87 S. E. 421, it was held that tbe liability of tbe city of Columbia for interest on Columbia Canal bonds guaranteed by it and for certain paving assessments
which the city had guaranteed constituted but a contingent obligation and must be excluded in determining whether a proposed bond issue would cause the indebtedness of the city to exceed its constitutional debt limit. Likewise, it was held in Brownlee v. Brock, 107 S. C. 230, 92 S. E. 477, that paving assessment certificates sold and guaranteed by the city must be excluded in computing the bonded debt of the city. Upon the authority of these two cases, it was held in McIntyre v. Rogers, 123 S. C. 334, 116 S. E. 277: “The guaranty of the paving certificates may not be regarded as a part of the ‘bonded debt’ or ‘bonded indebtedness’ of the town, within the meaning of the constitutional inhibition.”
In American Co. v. Lakeport, 220 Cal. 548, 32 P. (2d) 622, it is said: “The rule that the inhibitions of the constitutional debt limit do not apply to contingent obligations has long been settled in this state.”
The theory of contingent liability enters into the determination of what constitutes municipal indebtedness in Wicks v. Salt Lake City, 60 Utah, 265, 208 P. 538, and Corey v. Ft. Dodge, 133 Iowa, 666, 111 N. W. 6.
In South Dakota a contingent liability of the state hag been held not to create an indebtedness of the state until the happening of the contingency. In Re Opinion of Judges, 38 S. D. 635, 162 N. W. 536, involved the constitutionality of an amendment to the Rural Credits Act. The amendment provided for the levy of a special tax to take care of deficiencies that might occur in the rural credits fund. The court held that the amendment only designated a contingency under which a debt against the state would arise, and that unless the contingency happened, there was no debt.
In Coles County v. Goehring, 209 Ill. 142, 70 N. E. 610, the supreme court of Illinois considered the validity of a contract for the repair- of a court house. The contract provided for the payment of certain installments as the work progressed. It was contended that the contract created an indebtedness within the meaning of § 12 of Article 9 of the Illinois Constitution which provided that: “No county, city, township, school district, or other municipal corporation, shall be allowed to become indebted in any manner or for any purpose, to an amount, including existing indebtedness, in the aggre
gate exceeding 5 per centum on the value of the taxable property therein, to be ascertained by the last assessment for state and county taxes, previous to the incurring of such indebtedness. Any county, city, school district, or other municipal corporation, incurring any indebtedness as aforesaid, shall before, or at the time of doing so, provide for the collection of a direct annual tax sufficient to pay the interest on such debt as it falls due, and also to pay and discharge the principal thereof within twenty years from the time of contracting the same.”
A striking similarity exists between the wording of the last part of the above quotation and our own § 184. In holding that this section of the Illinois Constitution did not apply to the contract in the Coles County Case, the court said: “It is said, however, by counsel for plaintiff in error, that, under the second sentence of § 12 of article 9 of the Constitution, the county, before or at the time of making the contract, should have provided for the collection of a direct annual tax sufficient to pay the interest on the debt incurred by the making of the contract, as it fell due, and also to pay and discharge the principal thereof within twenty years from the time of contracting the same. We have held that the second sentence of § 12 ‘has reference to indebtedness, the amount whereof has become fixed and absolute, and the payment thereof deferred to a stated period in the future! Danville v. Danville Water Co. 180 Ill. 235, 54 N. E. 224; Kankakee v. McGrew, 178 Ill. 74, 52 N. E. 893.”
In § 2332, McQuillin on Municipal Corporations, 2d ed., we find this statement, “Some of these constitutional and statutory provisions are that no debt shall be incurred by a municipality unless provision is made at the time for levying and collecting a sufficient tax to pay the interest thereon and provide at least a certain per cent as a sinking fund. These piwisions, however, in most states, refer only to interest bearing indebtedness payable at a fixed time in the future, although the form of the indebtedness is immaterial.” See also Dillon on Municipal Corporations, 5th ed. § 211.
The warrant upon which this suit is brought was issued by the city of Mandan against a special fund created by the levy of assessments against the property benefited. Thus the city provided a means of payment which, according to reasonable expectations, would
be sufficient to produce the amount required to pay the warrant and interest thereon according to its terms. > The statute provided that in event this means should not be sufficient, the city would levy a general tax for any deficiency that might exist at the time of the maturity of the last warrant that had been issued against the fund. The city did not become obligated to make the levy until and unless two things happened: the last warrant matured and a deficiency in the fund existed. There was no way to measure the amount of the deficiency until the contingency thus provided for occurred. When it did occur it became á -liability of the city, definite' in amount.' The statute provided for levying a tax at that time, to care for the indebtedness thereby created.- Thus the statute complies with § 184 of the Constitution which requires the levy of an annual tax at or before the time of incurring the indebtedness.
Having determined that the legislature might constitutionally impose upon a municipality the obligation to levy general taxes to pay deficiencies arising in special assessment funds, the remaining question, therefore, is: Hid the legislature so provide by its amendments to § 3716?
This question can best be answered by recurrence to the statute itself. Its wording is not ambiguous. Prior to its enactment, the city had not been permitted to levy general taxes to pay deficiencies in special assessment funds until all special assessments levied for the specific improvement had been collected and applied in payment of outstanding warrants.
The amendment drastically changed the pre-existing law. It requires that when all special assessments collected are insufficient to pay the special improvement warrants issued against a specific improvement, the city shall levy a general tax to pay the deficiency. In order to remove any uncertainty as to when the obligation to levy this tax accrues, the legislature was specific. It provided that this should be done “upon the maturity of the last special improvement warrant.”
It is also significant that while the legislature first obligated municipalities to levy the tax in question in 1923, it amended the law again in 1929, keeping intact the provision requiring the levy of the tax upon the maturity of the last special assessment, warrant. The leg-
Mature then further provided that prior to ‘the maturity of the last special improvement warrant, the proper city authorities may in their discretion levy such a tax, if a deficiency exists in a special assessment fund prior to maturity of the last warrant.
It appears that the legislature provided that the city should levy the tax which the plaintiffs seek. This is the plain import of the 1923 amendment, reiterated by the legislature in chapter 171, N. D. Session Laws 1929, which was in effect at the time the warrant in this case was issued.
The constitutionality of chapter 174, N. D. Session Laws 1923, is further challenged upon the ground that the subject of the act is not sufficiently expressed in its title to meet the requirements of § 61 of the North Dakota Constitution. As we have heretofore pointed out, § 3716, N. D. Compiled Laws 1913, was originally enacted as a part of chapter 62, N. D. Session Laws 1905, dealing with the organization and government of cities.
The 1923 amendment is entitled “An Act to Amend and Re-enact § 3716 of the Compiled Laws of 1913 Relating to Payment of Deficiency in Special Assessments.” It is argued that the title of the act deals with deficiencies in special assessments and not with deficiencies resulting from nonpayment or failur.e to collect. We think the attempted distinction is entirely too narrow. Roth the original section and its amendment deal with deficiencies in special assessment funds. These funds are created to care for the cost of special improvements within the municipalities. Both the original section and the amendment provide for the levy of a general tax to pay deficiencies. The amendment is broader in scope than the original section in that it permits the levy of a general tax to make good deficiencies resulting from the failure of property owners to pay their assess-' ments. The title to an amendment, however, need not point out with particularity the exact scope of the amendment. Where the title to an amendatory act indicates that it is an amendment to an act or section specified therein, the title is sufficient, provided that the subject matter of the amendment is germane to the subject of the act that is amended and is embraced within the scope of the title of the act' amended. Erickson v. Cass County, 11 N. D. 494, 92 N. W. 841; State v. Fargo Bottling Works Co. 19 N. D. 396, 124 N. W. 387,
26 L.R.A.(N.S.) 872; School Dist. v. King, 20 N. D. 614, 127 N. W. 515; Wilson v. Fargo, 48 N. D. 447, 186 N. W. 263; Spicer v. Benefit Asso. R. E. 142 Or. 588, 17 P. (2d) 1107, 21 P. (2d) 187, 90 A.L.R. 517; Great Northern R. Co. v. Whitfield, 65 S. D. 173, 272 N. W. 787, 111 A.L.R. 1475.
The amendment is germane to the purpose of the original section. That purpose is to require the levy of a general tax to make good deficiencies in special assessment funds. These funds contain the proceeds of special assessment collections. Warrants have been issued against the funds; and the special improvements, which are the bases of the special assessments, have been paid for by the proceeds of the warrants. The amendment broadens the causes of deficiency for which the general tax may be levied so as to include failure to collect assessments. This is not such a departure from the purpose of the original section as to destroy the relevancy of the amendment thereto; nor does this departure place the amendment beyond the scope of the title to the Act of which the amended section originally was a part. The 1923 amendment is not invalid as violative of § 61 of the North Dakota Constitution.
Reversed.
Burke and Nuessle, JJ., concur.