When any bond, warrant or coupon drawn against any local improvement fund is presented to the city for payment and there is not sufficient amount in the local improvement fund against which to draw to pay the same, unless otherwise requested by the holder, payment therefor shall be made by warrant drawn against the local improvement guarantee fund. Such warrants when presented to the city treasurer for payment, if not paid, shall be registered and shall draw interest at a rate of six percent (6%) per annum. Neither the holder nor the owner of any bond or warrant issued in any local improvement district shall have any claim therefor except for the payment from the special assessments made for the improvement for which such bond or warrant was issued and except against the local improvement guarantee fund provided for in this chapter. The city shall not be liable to any holder or owner of such bond or warrant for any loss to any guarantee fund occurring in the lawful operation thereof by the city. (Prior code §12-4)