City of Pleasant Ridge v. Royal Oak Tp.

Decision Date12 October 1950
Docket NumberNo. 12,12
Citation44 N.W.2d 333,328 Mich. 672
PartiesCITY OF PLEASANT RIDGE et al. (MOORE, Intervener) v. ROYAL OAK TP. et al. Motion
CourtMichigan Supreme Court

Arthur E. Moore, Royal Oak, for plaintiffs and appellants and intervening plaintiff and appellant.

Glenn C. Gillespie, Pontiac, Franklin E. Morris, Ferndale, for defendant and appellee, Royal Oak Tp W. C. Hudson, Royal Oak, for City of Royal Oak.

Orph C. Holmes, Ferndale, for City of Ferndale.

Fletcher L. Renton, Royal Oak, for City of Hazel Park.

Before the Entire Bench.

REID, Justice.

This is a petition for a writ of mandamus to compel the officials of the township of Royal Oak and of the cities of Royal Oak, Ferndale and Hazel Park, which now embrace a portion of the territory formerly a part of the township of Royal Oak and having within their respective areas properties assessed for special assessments, involved in this litigation, to levy additional assessments or reassessments in the specific special assessment districts in the total approximate amount of $203,234.42. Petitioner Arthur E. Moore was permitted to intervene for and on behalf of himself as a bondholder and on behalf of all other bondholders of the special assessment districts involved in this litigation. Certain of these obligations became due and matured on October 1, 1947.

From a decree dismissing the petition, plaintiffs appeal.

Discussions in the briefs in this case center largely around two questions, namely: are the defendants or any of them authorized or required to make reassessment because of unpaid bonds?; secondly, are the plaintiffs and the township of Royal Oak guilty of laches for not proceeding sooner to institute proceedings to compel such reassessment?

Commencing in the year 1926 and ending September 1, 1928, the township of Royal Oak created 35 special assessment districts under the provisions of P.A.1923, No. 116, as amended by P.A.1925, No. 263, and P.A.1927, No. 58, which became effective April 21, 1927, see, as alter amended, C.L.1948, § 41.411 et seq., Stat.Ann. § 5.2411 et seq., for the purpose of furnishing water, sewer and street improvements.

The number, purpose, amount of assessment, and date of bonds, in each district, and the total of all the rolls, are shown in the record on Exhibit No. 1.

The special assessment bonds were due and payable five years after date, and were all sold to the public and the proceeds used to pay the costs of the improvements.

Since the creation of the special assessment districts and the levying of the special assessment taxes in the special assessment districts, 16 various portions of township territory have been annexed to cities or incorporated as cities, a total of eight cities being involved.

The following tabulation shows the population and assessed valuation of the defendant cities which acquired portions of the special assessment districts by incorporation or annexation:

                                            Assessed
                              Population   Valuation
                Royal Oak ....... 25,087  33,357,500
                Ferndale ........ 22,253  26,199,975
                Hazel Park ...... 16,665   9,556,210
                

The several annexations or incorporations of township territory by defendant cities of Royal Oak, Ferndale and Hazel Park included all of some and parts of other special assessment districts, and those districts, or, the portions thereof, which are now included within the corporate limits of such cities, are no longer under the jurisdiction or control of the township of Royal Oak.

For a short period of time collections of special assessment taxes were sufficient to meet payments of interest on the bonds, but, when the first effects of the subsequent general financial depression began to be felt, collections were not sufficient to meet interest payments.

In the year 1929 and subsequent years, many of the taxes in the area involved became delinquent and as a consequence many of the special assessments were unpaid. Tax moratorium statutes were enacted by the legislature cancelling interest and penalties under certain conditions and extending the period over which the taxes and special assessments could be paid. P.A.1933, No. 126, as amended, C.L.1948, § 211.301 et seq., Stat.Ann. § 7.231 et seq.

After default of the special assessment districts in payment of their bonds one Charles F. Whitman, the owner of some of the bonds, filed a bill of complaint in the Oakland county circuit court in chancery to compel the township of Royal Oak to advance from its general fund sufficient money to pay the amounts due on the bonds. See Whitman v. Township of Royal Oak, 269 Mich. 146, 256 N.W. 835. The Whitman case determined the liability of the township generally to pay the bonded indebtedness after default. Following the decision in the Whitman case the township from time to time made payments from its general fund on the bonds and interest, but it at no time had sufficient money to pay all interest and principal then due. At the time of the adoption of the refunding plan hereinafter referred to, there was barely sufficient money in the township's general fund to pay outstanding township orders.

Following the decision in the Whitman case, negotiations were entered into between the township and representatives of the bondholders to obtain an extension of time to pay the indebtedness and to secure a more favorable rate of interest. An agreement was ultimately arrived at under which the time for payment of the principal was extended and the rate of interest reduced. Upon consummation of the plan all prior special assessment bonds were surrendered to the township by the former bondholders in direct exchange for the refunding bonds. None of the refunding bonds were sold to any new purchasers.

No tax sales were held in Oakland county between the years 1932 and 1938. At the so-called 'scavenger sale' of property for delinquent taxes under P.A.1937, No. 155, as amended, C.L.1948, § 211.351 et seq., Stat.Ann. § 7.951 et seq., much property in the township and assessment districts was sold for delinquent taxes by the State. Upon such sale all remaining delinquent taxes (including special assessment) against the lands so sold were cancelled.

Other facts connected with the history of the 35 special assessment districts are recited in five cases in this court hereinafter cited.

For the purpose of this decision, lands the title to which was forfeited to the State because of unpaid taxes are herein referred to as scavengered and lands that are under discussion in this case, the title to which was not so forfeited to the State, are called unscavengered.

The scavengered lands are because of the scavenger sale proceedings exempt from any special assessment or reassessment for unpaid balances to be reassessed against the several assessment districts that are spoken of in this proceedings. Municipal Investores Association v. City of Birmingham, 298 Mich. 314, 299 N.W. 90; Keefe v. Oakland County Drain Commissioner, 306 Mich. 503, 510-512, 11 N.W.2d 220.

The township of Royal Oak has a secondary liability as guarantor for payment of all the bonds. Hazel Park Nonpartisan Taxpayers Association v. Township of Royal Oak, 317 Mich. 607, 625, 27 N.W.2d 249.

The township has the authority and duty to levey reassessment against the remaining (unscavengered) lands in such special assessment districts situate within the present territorial limits of the township, in a manner not inconsistent, however, with our recent holding in Wood v. Village of Rockwood, 328 Mich. 507, 44 N.W.2d 163.

The township has now no authority to levy or direct the levying of reassessments on any lands not now within the territorial limits of the township.

The township and plaintiff cities have an interest in seeing to it that all the 'seceded' territory contributes its just proportionate share toward the payment of the debt.

The plaintiff cities of Pleasant Ridge and Huntington Woods contain within their territorial limits no lands embraced in any of the 35 original assessment districts. Each of said two plaintiff cities is liable at large for the payment out of its general fund to the township for its proportion of the remaining unpaid debt after remedies of reassessment have been exhausted.

Plaintiff cities Pleasant Ridge and Huntington Woods must make their proportionate contribution without recourse to any special assessment district for the reason that there are no lands of the original special assessment district located within their territorial limits. The defendant cities of Royal Oak, Ferndale and Haxel Park having within their territorial limits lands embraced within some of the original 35 assessment districts, have a right and duty to make proportionate reassessment on the remaining (unscavengered) lands within their territorial limits and within such original assessment district or districts also in a manner consistent with our holding in Wood v. Village of Rockwood, 328 Mich. 507, 44 N.W.2d 163.

The defendants have omitted to take steps that it was their imperative duty to take and are subject to an order of mandamus to require them to proceed.

Defendant township cites C.L.1948, § 41.413, Stat.Ann. § 5.2413, hereinafter quoted, and claims that the last sentence thereof speaking of reassessment did not impose any statutory duty upon the township or cities to make a reassessment. However, in Hazel Park Nonpartisan Taxpayers Association v. Township of Royal Oak, 317 Mich. 607, at page 630, 27 N.W.2d at page 258, referring to C.L.1948, § 68.12 et seq., Stat.Ann. § 5.1360 et seq., where the words are, 'the council may, within the limitations prescribed for such assessments, make an additional pro rata assessment to supply the deficiency', we held the provision to be mandatory although the word used is 'may.' The word 'may' was substituted for the word 'shall' in the above statute by P.A.1934, Ex.Sess., No. 24, subsequent to the creation of the special assessment districts and...

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  • Sessa v. Macomb County, Docket No. 192569
    • United States
    • Court of Appeal of Michigan (US)
    • November 26, 1996
    ...the other taxes which the [municipality] may be authorized to levy." M.C.L. § 41.735; M.S.A. § 5.2770(65). Pleasant Ridge v. Royal Oak Twp., 328 Mich. 672, 44 N.W.2d 333 (1950). Because the bonds that were issued were limited tax obligation bonds, we may dispose of the frivolous contention ......

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