City of Coates ex rel. Coates v. Ridenour

• Decision Date: 31 October 1884
• Citation: 84 Mo. 253
• Parties: THE CITY OF KANSAS TO THE USE OF COATES, Assignee, v. RIDENOUR et al., Appellants.
• Court: Missouri Supreme Court

84 Mo. 253

THE CITY OF KANSAS TO THE USE OF COATES, Assignee,

v.RIDENOUR et al., Appellants.

Supreme Court of Missouri.

October Term, 1884.

Appeal from Jackson Circuit Court.--HON. T. A. GILL, Judge.

REVERSED.

Karnes & Ess for appellants.

The set-off should have been allowed. Holbrook v. Receiver, 6 Paige 227; Green v. Farmer, 4 Burr. 2220, 2221; Story's Eq. Juris., sec. 1437 b; Field v. Oliver, 43 Mo. 200; Reppy v. Reppy, 46 Mo. 571; Barnes v. McMullins, 78 Mo. 260; Russell v. Conway, 11 Cal. 95; Simpson v. Hart, 14 John. 62; Smith v. Felton, 43 N. Y. 419; Ferris v. Burton, 1 Ver. 439; Thorpe v. Wegefaith, 56 Pa. 82; Burns v. Thornburgh, 3 Watts 78; Duncan v. Vandenburgh, 1 Paige 622; Camp v. Page, 40 Ga. 45; Herman v. Miller, 14 Kan. 328; Mitchell v. Oldfield, 4 Term. R. 123; R. S. 1879, secs. 3867, 3875.

Pratt, Brumback & Ferry for respondent.

The set-off was properly disallowed. Cooley on Taxation, pp. 13 and 14; St. Louis v. Allen, 53 Mo. 44; City of Louisiana v. Miller, 66 Mo. 467; Higgins v. Ausmuss, 77 Mo. 353; Pierce v. Boston, 3 Met. 520; McCracken v. Elder, 34 Pa. 239; Perry v. Washburn, 20 Cal. 348; Hunnelman v. Spanegal, 39 Cal. 389; Webster v. Seymour, 8 Ver. 135; Johnson v. Howard, 41 Ver. 122; Trenholme v. Charleston, 3 S. C. 347; Newport, etc., v. Douglass, 12 Bush (Ky.) 673; Cobb v. Elizabeth City, 75 N. C. 1; New Orleans v. Davidson,30 La. Ann. part 1, pp. 541, 554; 2 Dillon's Mun. Corp. (3 Ed.) sec. 810.

DEARMOND, C.

The petition in this case contains six counts, each substantially the same. The suit is for the enforcement of six separate tax-bills against the property of the defendants. In the first two the amount claimed is $16.10 in each; in each of the last four, $27.60. In each of these counts it is alleged that the Mastin Bank was a corporation, created and organized under the laws of Missouri, and that on the third day of August, 1878, said bank made a voluntary assignment for the benefit of its creditors to Kersey Coates; that the City of Kansas is a municipal corporation; that by ordinance it established sewer district number one hundred and twenty-three, and ordered a sewer to be built therein; that for the doing of said work a contract was duly entered into with one John Halpin, and that he constructed said sewer in accordance with said ordinance and contract; that in accordance with the provisions of the city charter, tax-bills were issued against the property in said district to pay for the doing of said work; that the defendants, Ridenour and Baker, were the owners of six lots in said district, and that the several tax-bills sued on in said several counts were issued to said Halpin as charge against said lots so belonging to the defendants; that afterwards the said Halpin assigned said tax-bills to the said Mastin Bank, and that the same have not been paid, and judgment on each is asked. The defendants, in their answer, admit the issue of the tax-bills, and their assignment to the Mastin Bank, as alleged in the petition, and that the Mastin Bank made an assignment to Kersey Coates, in trust for all its creditors, and that they are the owners of the several lots against which said tax-bills are issued, and that they became indebted to the Mastin Bank in the amount of the several tax-bills. But for a defence thereto, say that on August 3, 1878, and for a long time prior thereto, they were the owners of the several parcels of real estate sought to be charged in said tax-bills; that they were such owners on June 14, 1878, the date at which said bank acquired said tax-bills, and that on August 3, 1878, they had as partners on deposit in the Mastin Bank the sum of $194.30, and that the Mastin Bank, on that date, was indebted to them in said sum of $194.30 so deposited, and that said sum has not been paid to them, in whole or in part. They allege that on August 3, 1878, said bank was, and now is insolvent, and on said date made the assignment to said Coates, as above mentioned. They allege that the property upon which these tax-bills are charged belonged to the defendants as partners. They ask that of the sum so deposited an amount equal to said tax-bills be set-off against the same, and that said tax-bills be cancelled. The petition was filed May 8, 1880, and the answer was filed October 11, 1880.

Afterwards, on June 16, 1881, this agreed statement of facts was filed: “This is a suit to enforce certain tax-bills for building a sewer in Kansas City, Missouri, and the validity of the tax-bills is admitted, and also that the defendants are the owners of the lots sought to be charged, and were such on August 3, 1878. It is likewise admitted that the defendants had a deposit, as claimed in the answer, in the Mastin Bank at the time of its failure, and the only question to be determined is, whether or not the defendants, as a matter of law, are entitled to the set-off, as claimed. The ownership of Coates, as assignee of the Mastin Bank, of the tax-bills as sued on, is admitted, and that said bank, on August 3, 1878, was unable to pay what it then owed.

PRATT, BRUMBACK & FERRY,

Attorneys for Plaintiff.

KARNES & ESS,

Defendants' Attorneys.”

On these pleadings and this agreed statement of facts the case was submitted to the court without a jury, and against the objections of the defendant, the court declared the law to be for the plaintiff, as follows:

“On the pleadings and the agreed statement of facts, the court must find that the sum due defendants from the Mastin Bank cannot be set-off against the sum due on the special taxes or tax-bills sued on.”

The defendants asked the court to declare the law as follows, which was refused:

“The defendants ask the court to declare the law to be that upon the pleadings and agreed statement of facts, as filed in the cause, the plaintiff cannot recover.”

The court found defendants not entitled to set-off their demand against the plaintiff's and that there was due plaintiff from defendants the several sums sued for, and interest, and gave judgment against defendants for said amounts, with costs, to be levied of the several lots against which the tax-bills issued. After the assignment of the Mastin Bank to Kersey Coates, and on January 30, 1879, one of the days named by him for the allowance of claims, the said defendants, Ridenour and Baker, presented to him for allowance an account against said bank for $194.30, money deposited, and out of this they asked that the tax-bills sued on be deducted, and that the balance be allowed them. This the said assignee refused, and from the decision of the assignee the defendants appealed to the circuit court of Jackson county, and upon hearing in said circuit court, the judgment of the assignee was affirmed, and the whole amount of $194.30 allowed against said assignee, but the court refused to deduct therefrom the amount of said tax-bills. Afterwards, on January 20, 1882, the defendants in this cause filed a motion asking that the judgment on said tax-bills be set-off against the judgment of allowance as aforesaid. Upon the hearing of this motion it was agreed that the defendants were the owners of the real estate since January, 1875, and still were. The court denied the motion. The necessary steps being taken, the cause is here by appeal.

The law, as applicable in general to the case of the assignee of an insolvent bank, suing a depositor, who asks to set-off what is owing to him as a depositor against what he owes, is declared and the authorities examined in Smith, Assignee, v. Spengler, 83 Mo. 408. The conclusion reached is, that on reason and authority, the set-off should be allowed. One feature distinguishes the case at bar from that just referred to; there, a promissory note was sued on; here, certain special tax-bills. So, Smith v. Spengler, though a strong authority in point, is not necessarily decisive of this case. The law authorizing the issue of these tax-bills (Laws 1875, p. 256-7) provides, among other things, that: “As soon as the district sewer shall have been completed, the city engineer or other officer having charge of the work, shall compute the whole cost thereof, and shall assess it as a special tax against the lots of ground, exclusive of the improvements, in proportion to the area of the whole district, exclusive of public highways; and such officer shall make out a certified bill of such assessment against each lot of ground within the district, in the name of the owner thereof; said certified bill shall be delivered to the contractor for the work, who shall proceed to collect the same by the ordinary process of law, in the name of the city, to his own use; and in case of absent owners, he may sue by attachment or by any other process known to the law, and every such certified bill shall be a lien against the lot of ground described therein, and shall bear interest at the rate of ten per cent. per annum from thirty days after the date of its issue, unless sooner offered to be paid; and if not paid or offered to be paid within six months after the date of issue, then it shall bear interest at the rate of fifteen per cent. per annum until paid; * * * and every such certified bill shall, on action brought to recover the amount thereof, be prima facie evidence of the validity of the charges against the property therein described, and of the liability of the person therein named as the owner of such property. The city shall incur no liability for building district sewers, except when the city is the owner of a lot of ground within the district, and in that case the city shall be liable for the cost of said sewer, in the same manner as other property owners within the district.”

It may be regarded as settled that no set-off can be allowed in a suit for taxes for general or public purposes, though in some cases there is recognized a limitation to the rule, as shown in Donelson v. Inhabitants of Colerain, 4 Met. 430; Concord v. Pillsbury, 33 N. H. 310. Public policy forbids the plea; the regular...