Court Opinion

ID: 7055757
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:06:03.577335+00
Date Added: 2024-06-11T16:11:08.767790
License: Public Domain

*691On Petition for Rehearing.
Jordan, J.
Appellee has petitioned for a rehearing in this appeal, on the grounds that the court erred: (1) In reversing the cause upon a question not controverted by any party to the appeal, and in not deciding the only question involved in the merits of the appeal; (2) in deciding that neither paragraph of the complaint, under the facts therein averred, discloses any liability against the town of Windfall City; (3) in not deciding any question raised upon the assignment of the cross-errors by appellee against the school town of Windfall City and the Wildcat school township of Tipton county.
8. In regard to the third ground assigned for a rehearing, the opinion of the court discloses that appellee’s cross-errors were dismissed for the reason that they were unauthorized. But were it conceded that these alleged errors had been properly and regularly assigned, nevertheless appellee was not entitled to have them considered, and the liability of the school corporation’s property in respect to the assessments, made against it for the street improvement, determined and decided, for the reason that its original brief contained no points and authorities relied upon for a reversal of the judgments in favor of the two school corporations. See rules twenty-two and twenty-three of this court.
The only references in appellee’s original brief in regard to the cross-errors appear in the closing part of the argument, wherein it is said, in respect to the action of the lower court in sustaining the demurrers of the school corporations to each paragraph of the complaint: “The appellee has assigned cross-errors upon these rulings of the court. We do not insist upon these assignments of error, should the case be affirmed as to the town of Windfall City. * * * But if the court should be of the opinion that the assessments on the school property are valid and binding, and that by reason *692of that fact the town is not liable upon the bonds, then we insist that the case, as to all of the parties, should be re*versed and sent back for further proceedings. * * * We only present these cross-errors in order to protect the rights of the plaintiff, should the court in any event come to the conclusion that the court below was in error. ’ ’
Counsel, in their brief upon the petition for rehearing, further say: “As between the appellee and the town of Windfall City, our position is, and has been, that under the decisions and law of Indiana, no valid assessment could be made against the public property belonging to the school corporations; that the attempted assessment of the same was an absolute nullity; that the town had a right and was invested with the power to improve its streets in and about the public property, and if it contracted for such improvements and attempted to make assessments upon such property for payment of the same, such assessments being absolutely null and void, the town would be liable for the payment of the same.”
Appellee’s counsel further say that they do not controvert the decisions in the cases of Quill v. City of Indianapolis (1890), 124 Ind. 292, 7 L. R. A. 681; Robinson v. City of Valparaiso (1894), 136 Ind. 616, Dowell v. Talbot Pav. Co. (1894), 138 Ind. 675, Porter v. City of Tipton (1895), 141 Ind. 347, and City of Huntington v. Force (1899), 152 Ind. 368, cited in the original opinion, but they assert that their position or contention is, and has been, that in a case in which a municipal corporation, “having the power to improve its streets, enters into a contract by the terms of which the improvement is to be paid for by the bonds of the corporation, based upon the assessment to be made, and a bond is issued and based upon void and illegal assessments, and where by the terms of the bond the credit and faith of the municipal corporation is pledged for its payment, the corporation is liable upon the bond and the fact that it made a void assessment, which is uncollectible, is no defense in a suit upon the *693bond.” They further assert that “where a municipal corporation issues its bonds in the form and substance authorized by the law, in payment for improvement of streets which it has the power to improve and pay for out of general taxation, and where such bonds are payable out of the special fund created or to be created by the corporation by assessments against abutting property, the holder of the bonds would be entitled to recover on the face thereof upon the introduction of the bond, and the fact that the special fund out of which it is payable has not been accumulated would be a matter of defense by the town, and if such fund has not been created by a valid assessment against abutting property, such fact would be no defense. If the bonds are void by reason of the invalidity of assessment upon which they are based, then the town would be liable on the original contract, since it had not performed the same by creating a proper form and by issuing a valid bond thereon. The judgment would be supported by the original contract, the city or town being primarily liable on the contract.”
7. While counsel for appellee concede that the decisions in Quill v. City of Indianapolis, supra, Robinson v. City of Valparaiso, supra, Dowell v. Talbot Pav. Co., supra, Porter v. City of Tipton, supra, and City of Huntington v. Force, supra, are correct expositions of the law, nevertheless they seek to predicate a primary liability of the town, in personam, upon the mere fact that the assessments levied against the property of the school corporations as shown are invalid, and not legally collectible. It is manifest that counsel have overlooked the fact that the town, in entering upon and in carrying out the street improvement in question, was not proceeding under its general powers with which it was invested by the statute for the improvement of its streets by defraying the expenses of such improvement out of the general funds of the town’s treasury.
In making the street improvement the town was exercising a special power or authority conferred upon it by the stat*694utes. It did not decide to exercise a general power and adopt the method of improving the streets by paying for the cost of the work out of its general funds. Of course it was, under the statute, within its discretionary power to adopt the latter method. It, however, entered into a contract with the contractors with an express reference therein to the source from which they were to receive their payment. The contract provided that the “town of Windfall City, by its board of trustees, the second party, agrees to pay in bonds issued as herein provided, unto the party of the first part (the contractors) the contract price as before stipulated when said work is completed; and, for the purpose of paying the same, said party of the second part will cause to be issued street improvement bonds as provided in section eight of the act of March 8, 1889 (Acts 1889, p. 237, §4296 Burns 190.1), and the amendatory acts thereto, concerning street improvements, which bonds shall be accepted by the party of the first part in payment for said improvement,” etc. The liability for the payment of the work, under the law, was primarily cast upon the abutting property of the taxing district, subject to and legally liable to be assessed to the amount of the special benefits which such property might derive by reason of the improvement.
9. The property of the school corporation did not, in a legal sense, constitute a part of the taxing district, because, under the law as it then existed, such property was not liable to be assessed for the improvement. Both the town, through its board of trustees, and also the contractors, were chargeable with notice that under the law the school property was not liable to be assessed for the street improvements. The contractors in entering into the contract were bound to know the limit of the power possessed by the town in the particular case, and the restrictions to which, under the law, it was subject. City of Frankfort v. State, ex rel. (1891), 128 Ind. 438; Newman v. Sylvester (1873), 42 Ind. 106; Horter v. City of Philadelphia (1883), 13 Weekly *695Notes of Cases (Pa.) 40; 1 Dillon, Mun. Corp. (3d ed.), §447.
10. The fact that the school property was exempt from the assessment was in no manner dne to any act of the town. The latter was not instrumental in preventing the assessment of the school property. Both parties, the town and the contractors, appear to have acted in the matter as though each believed that the latter property was liable to be assessed to the extent of the benefits accruing to it on account of the improvement. This was merely a mistake of law upon the part of each.
7. 11. It is settled beyond further controversy that under the facts and the law applicable thereto, as it is recognized and held in this jurisdiction, there can be no enforceable liability against the town of Windfall City in personam. That the school corporations are not liable is conceded, and properly so, by appellee’s counsel. The cases upon which the latter rely to sustain their contention in regard to the liability of the civil town—such as Barber Asphalt Pav. Co. v. City of Harrisburg (1894), 64 Fed. 283, 12 C. C. A. 100, 29 L. R. A. 401, as well as others cited—■ depend upon essentially different facts and different statutes from those involved in this case. Therefore they cannot be regarded as influential authorities. Appellee places much stress upon the stipulation in the improvement bond in suit, whereby it is declared that the credit and good faith of the town is “hereby pledged.” This provision cannot be construed as binding the town to pay any portion of the cost of the improvement out of its general fund. Such a stipulation or provision in the bonds was unauthorized by the statute, and therefore may be said to be ultra vires. City of Huntington v. Force, supra.
12. The following cases support the view that the mere fact that the assessment against the school property proved to be invalid will not alone render the town impliedly liable for the payment of the deficit caused *696by said'assessment. Horler v. City of Philadelphia, supra; Trustees, etc., v. Hohn (1884), 82 Ky. 1; Casey v. City of Leavenworth (1876), 17 Kan. 189.
The ease of Horter v. City of Philadelphia, supra, is very much in point. The city of Philadelphia, in pursuance of an ordinance, contracted for the improvement of a certain street of that city. The contractor was to accept and receive assessment bills in payment of his work, and was to have no resort against the city. He performed the work, and secured an assessment bill against a certain cemetery company, which company, under its charter, was exempt from taxation. The contractor failed successfully to enforce his claim against said company, and thereupon instituted an action against the city to recover the value of the work which he had done in front of the cemetery. It was held by the court in that case that he was not entitled to recover. The court said: ‘ ‘ The plaintiff knew the restricted power of the city, and had the same knowledge it had of the legal invalidity of the particular assessment in question.”
13. It is true, as insisted by appellee’s counsel in this case, that their client is entitled to the money unpaid for the services of the contractors, through whom it claims. While we are not to be understood as in any manner intimating an opinion, or pointing out the methods which appellee might adopt for the purpose of securing its money, nevertheless in passing we may suggest the following methods: (1) The town of Windfall City might voluntarily, under and by virtue of section three of the Barrett law (§4290 Burns 1901, Acts 1889, p. 237), provided said section has not been repealed by subsequent legislation, order that the deficit created by reason of the invalid assessment against the school corporations’ property be paid to appellee out of the general funds of the town; (2) the town of Windfall City, being in default in making a sufficient assessment of special benefits to defray the expenses of the street improvement, might, at the instance of appellee, be compelled to *697make an additional assessment upon the property of the taxing district legally liable to be assessed for the improvement, provided the special benefits resulting to the abutting property will admit of such an additional assessment. In Rogers v. Voorhees (1890), 124 Ind. 469, the original assessments made for the construction of a public ditch proved to be inadequate. This court, in that case, held that an additional assessment might be made in the event the special benefits would admit of such an assessment.
Appellee, having advanced no sufficient reasons to entitle it to a rehearing, its petition is overruled.