Brown-Crummer Inv. Co. v. City of Purcell, Okl., 2366

• Decision Date: 24 June 1942
• Docket Number: No. 2366,2416.,2366
• Citation: 128 F.2d 400
• Parties: BROWN-CRUMMER INV. CO. v. CITY OF PURCELL, OKL., et al. BELL v. BROWN-CRUMMER INV. CO.
• Court: U.S. Court of Appeals — Tenth Circuit

128 F.2d 400 (1942)

BROWN-CRUMMER INV. CO. v. CITY OF PURCELL, OKL., et al. BELL v. BROWN-CRUMMER INV. CO.

Nos. 2366, 2416.

Circuit Court of Appeals, Tenth Circuit.

May 6, 1942.

Rehearing Denied June 24, 1942.

Solon W. Smith, of Oklahoma City, Okl. (James G. Martin and J. H. Fugate, both of Wichita, Kan., and James S. Twyford and William J. Crowe, both of Oklahoma City, Okl., on the brief), for appellant Brown-Crummer Inv. Co.

Geo. Bingaman, of Purcell, Okl., for appellee J. E. Bell.

Roy Glasco, of Purcell, Okl., for appellee City of Purcell, Okl., and another.

Before BRATTON, HUXMAN, and MURRAH, Circuit Judges.

BRATTON, Circuit Judge.

By appropriate ordinances and resolutions, the City of Purcell, Oklahoma, levied assessments for street improvement against certain described lots and tracts in improvement district Number 2, and issued street improvement or paving bonds. The ordinance levying the assessments was dated January 17, 1923, and provided that the assessments should be payable in ten equal annual installments, the first on September 1, 1923, and the last on September 1, 1932. The bonds were numbered from 1 to 230, inclusive, were dated February 1, 1923, became due and payable in ten equal annual installments beginning September 15, 1923, and ending September 15, 1932, and provided that they were payable solely from the assessments which the city would undertake to collect. Bonds numbered 1 to 163 were paid.

The Brown-Crummer Investment Company instituted this suit against the city and its financial secretary, treasurer, clerk, and assessor. It was alleged in the complaint that plaintiff owned bonds numbered 164 to 172, and 174 to 183, aggregating $9,500; that the defendants had wrongfully paid bonds of a later maturity, bearing higher numbers, and therefore inferior in priority to those owned by plaintiff; and that the funds and assets wrongfully used in paying such inferior bonds were equal to or greater in amount than the sum due plaintiff on its bonds. The county treasurer, J. E. Bell, and Home Owners Loan Corporation were subsequently joined as defendants. It was alleged in the amended complaint that by credit upon or surrender of unpaid bonds it had been attempted to satisfy and cancel of record the assessments against some of the lots and tracts; that such attempted satisfaction and cancellation was illegal and void but had resulted in the diminution of the record assessments as security for all of the outstanding bonds, including those owned by plaintiff; that Bell had participated in the attempted satisfaction and cancellation of the lien on one piece of property, and was a class representative of property owners who had obtained attempted satisfaction and cancellation of assessments in that manner; that mortgages had been given on properties within the district; that Home Owners Loan Corporation held mortgages on certain properties therein, and was a class representative of holders of mortgages. As against the city and its officials, plaintiff prayed for an accounting, that judgment be entered directing them to pay to it the amount of its bonds, with interest, that they be enjoined from making further payments on bonds inferior in priority to those owned by plaintiff until plaintiff had been paid in full, and that they be ordered to make due levies and provisions for the payment of such judgment; and as to the county treasurer, Bell, and Home Owners Loan Corporation, plaintiff prayed that they be required to make full disclosure in respect to the attempted satisfaction and cancellation of assessments, that such attempted satisfaction and cancellation be adjudged ineffective, and that all entries appearing on the books and records relating thereto be vacated, set aside, and annulled.

By answer, Bell admitted that he had participated in the satisfaction and cancellation of liens on two lots owned by him through credit on or surrender of bonds which he owned or in which he had an interest, but alleged that such satisfaction and cancellation was effected under the provisions of chapter 58, Session Laws of Oklahoma 1933, 62 O.S.1941 § 341 et seq.; he pleaded limitations, laches and estoppel; and he further pleaded that in the event it should be determined that plaintiff was entitled to recover, then plaintiff be required to restore and place in hodgepodge $7,153.02 which had been paid to it since all of the unpaid bonds became past due and delinquent. The other defendants answered but it is not necessary to detail the issues tendered.

The court determined that plaintiff was not entitled to recover against the city; that the bonds were not payable in numerical sequence after all unpaid bonds became delinquent, but were payable pro rata; that the attempted satisfaction and cancellation of assessments by credit upon or surrender of bonds was ineffective; that such assessments should be restored to their owners; and that plaintiff should not be required to return to the paving fund sums which had been paid on its bonds after all of the unpaid bonds became delinquent. Judgment was entered accordingly. Plaintiff appealed from that part of the judgment which denied recovery against the city and from that part which determined that the bonds were payable on a pro rata basis; and defendant Bell perfected a cross appeal from the part vacating and annulling the satisfaction and cancellation of the assessments against his lots and from that part which provided that plaintiff not be required to make restoration to the paving fund. The appeal as to the city was abandoned, and no contention is made by either party as to Home Owners Loan Corporation. Therefore, the rivals are plaintiff on one hand and defendant Bell on the other; and, for convenience, reference will be made to them in that manner.

Plaintiff contends that these bonds were payable in numerical order and that the court erred in holding otherwise. Article 18, section 3(a), of the Constitution of Oklahoma, provides that any city containing a population of more than two thousand inhabitants may frame a charter for its own government, consistent with and subject to the constitution and laws of the state, and then details the procedure to be followed in the adoption of such charter. The City of Purcell adopted a charter form of government under such constitutional authority, and has for many years exercised the powers and functions of a city of the first class. Such a charter becomes the organic law of the municipality, and its provisions supersede all laws of the state in conflict therewith insofar as they relate to purely municipal matters. Lackey v. State, 29 Okl. 255, 116 P. 913; In re Initiative Petition on Proposed Charter for City of Okmulgee, 89 Okl. 134, 214 P. 186; Caruth v. State, 101 Okl. 93, 223 P. 186; Pitts v. Allen, 138 Okl. 295, 281 P. 126; City of Muskogee v. Senter, 186 Okl. 174, 96 P.2d 534. But a charter of that kind does not supersede all general law of the state. It is paramount over general law only as to conflicts between the two which relate to purely municipal affairs. City of Muskogee v. Senter, supra.

The charter of the City of Purcell provides that article 5, chapter 14, of the Compiled Laws of Oklahoma 1909, being article 1, chapter 10, of the Session Laws 1907-8, be and the same is in express terms adopted in full force within the limits of the city. That statute provides that one-tenth in amount of any series of street improvement bonds, with the interest upon the whole series to that date, shall be payable on the fifteenth of September next succeeding the maturity of the first installment of the assessments and interest, and one-tenth with the yearly interest upon the whole amount remaining unpaid on the fifteenth day of September each succeeding year until all shall be paid; and that the special assessments and each installment of interest thereon shall be a lien against the lots and tracts of land assessed, from the dates of the ordinances levying the same, co-equal with the lien of other taxes, and prior and superior to all other liens, and that such lien shall continue until the assessments and interest thereon shall be fully paid. But the statute which thus became a part of the charter does not provide that bonds shall bear serial numbers or that they shall be paid in numerical order. The bonds did bear serial numbers but that was...