Royal Oak Tp. v. City of Huntington Woods

• Decision Date: 03 December 1945
• Docket Number: No. 91.,91.
• Citation: 313 Mich. 137,20 N.W.2d 840
• Parties: ROYAL OAK TP. v. CITY OF HUNTINGTON WOODS.
• Court: Michigan Supreme Court

313 Mich. 137

20 N.W.2d 840

ROYAL OAK TP.

v.CITY OF HUNTINGTON WOODS.

No. 91.

Supreme Court of Michigan.

Dec. 3, 1945.

OPINION TEXT STARTS HERE Appeal from Circuit Court, Oakland County, in Chancery; H. Russel Holland, Judge.

Suit by Township of Royal Oak, a municipal corporation, against City of Huntington Woods, a municipal corporation, for an accounting and settlement between plaintiff and defendant incident to incorporation of defendant city in what was theretofore township territory. From a modified decree entered after rehearing, defendant appeals.

Case remanded to trial court for the purpose of making a record on a full rehearing of the accounting.

Before the Entire Bench.

Arthur E. Moore, of Royal Oak, for defendant and appellant.

Glenn C. Gillespie, of Pontiac, and Franklin E. Morris, of Ferndale, for plaintiff and appellee.

NORTH, Justice.

The bill of complaint was filed in this cause August 19, 1938. By its suit the township of Royal Oak, hereinafter referred to as the township, sought to obtain an accounting and settlement between itself and the city of Huntington Woods, hereinafter referred to as the city. The city was incorporated in August 1932 and its incorporated area was taken from what had theretofore been a part of the township. The accounting sought was such as is incident to the incorporation of a city in what was theretofore township territory, as provided in volume 1 Compiled Laws 1929 section 2250 as amended by Act No. 233, Public Acts 1931 (Stat.Ann. § 5.2093). After hearing in the circuit court a decree was entered which defendant deemed adverse to its rights. Defendant appealed to this Court, and the record and briefs were duly filed. However, by request of counsel for the respective parties consideration and determination of the case in this Court was deferred. This was done because counsel were of the opinion that the matter in litigation might be amicably adjusted. Subsequent to decree originally entered in the instant case in the trial court, decision by this Court was rendered in the case of Township of Royal Oak v. City of Pleasant Ridge, 295 Mich. 284, 294 N.W. 682. Thereafter by stipulation of counsel the instant case was remanded from this Court to the circuit court of Oakland county. On June 18, 1941, in accord with stipulation of counsel, an amended decree was filed by which the rights and liabilities of the respective parties in the subject matter of the suit purported to be fully adjudicated. On May 5, 1943, the township filed a motion that the court sua sponte order a partial rehearing. By its motion plaintiff township sought upon rehearing to have stricken from the amended decree previously entered by consent paragraphs (3) and (6), to which further reference will hereinafter be made. In part the reasons asserted in support of the motion were that under our decision in Township of Royal Oak v. City of Pleasant Ridge, supra, the provisions of the consent decree which plaintiff sought to have stricken were contrary to the law relative to the liability of the respective parties to the instant suit, particularly as to contingent liability on special assessment bonds; and because the erroneous provisions of the decree were inserted therein ‘through a mutual mistake of counsel and the court as to the law applicable to said special assessment bonds.’ Plaintiff's motion that the court sua sponte order a rehearing was granted July 2, 1943; and incident to the rehearing the trial court, on November 8, 1944, struck from the amended decree which had been entered by consent June 18, 1941, the above mentioned paragraphs (3) and (6) thereof; and further, as proposed in plaintiff's motion, the trial court added to its modified decree, which was entered nunc pro tunc as of June 18, 1941, certain provisions which will be noted later herein.

The present appeal is from the amended decree of November 8, 1944, entered nunc pro tunc as of June 18, 1941. In part appellant's contention is indicated by the following question:

‘Where a consent decree is set aside because of invalidity of one of several interdependent sections thereof, may the Court set aside the invalid section and require the parties to remain bound by the remaining sections, and thus make a new contract for the parties?'

Another of appellant's questions reads:

‘Where a contested decree of the Trial Court, pending appeal, is superseded by an invalid consent decree which must be set aside, are the parties to be returned to their status quo, and either the former decree with right of appeal reinstated or some decree rendered within the scope of the pleadings and proofs?'

Our review of this record brings the conclusion that at least for the purpose of decision herein the amended decree entered in the trial court June 18, 1943, should be considered as a consent decree. It bears the endorsement: ‘O. K. as to form and substance: Robert C. Baldwin, Attorney for Plaintiff and Appellee.’ However, see Kirn v. Ioor, 266 Mich. 335, 253 N.W. 318. As hereinbefore noted, this decree was entered after the case by stipulation of counsel for the respective parties was remanded from this Court to the circuit court; and evidently it was drafted in the particulars now in controversy in accord with what all, or at least some, of the parties thought was the controlling law.

The following facts are essential to a more complete understanding of the circumstancesgiving rise to this litigation and the present appeal: At the time defendant city was incorporated there were outstanding two groups of special assessment bonds, and there were also certain outstanding general obligations of the township. On the other hand, the township possessed certain assets which, together with township liabilities, had to be taken into consideration in adjusting the rights and liabilities which arose from the incorporation of defendant city out of township territory, as above noted. See volume 1 Compiled Laws 1929, § 2250, as amended by Act No. 233, Pub.Acts 1931 (Stat.Ann. § 5.2093). There seems to be no dispute that the proportion of the taxable properly taken incident to the incorporation of the defendant city was such that the city, in accord with the statute just above cited, would share in the township's assets on the basis of 15.7386 per cent thereof, and likewise the city would be liable for the same proportion of the township's general liabilities. At the time of the city's incorporation one group of special assessment bonds, designated as rolls 5 to 11, were outstanding in an amount of upwards of $200,000. These are the same bonds involved in former Royal Oak township cases. See Whitman v. Township of Royal Oak, 269 Mich. 146, 256 N.W. 835; Township of Royal Oak v. City of Pleasant Ridge, supra. They were issued to pay for sewers and water mains under Act No. 116, Pub. Acts 1923, as amended by Act No. 263, Pub. Acts 1925. A second group of like special assessment bonds, designated as rolls 22 to 35, in the amount of more than $90,000, were also outstanding. As to these special assessment bonds the consent decree in paragraph (3) provided as follows:

‘That any and all...