City of Indianapolis v. American Const. Co.

• Decision Date: 28 November 1911
• Docket Number: No. 21,775.,21,775.
• Citation: 176 Ind. 510,96 N.E. 608
• Parties: CITY OF INDIANAPOLIS v. AMERICAN CONST. CO.
• Court: Indiana Supreme Court

176 Ind. 510

96 N.E. 608

CITY OF INDIANAPOLIS

v.AMERICAN CONST. CO.

No. 21,775.

Supreme Court of Indiana.

Nov. 28, 1911.

Appeal from Circuit Court, Marion County; Charles Remster, Judge.

Action by the American Construction Company against the City of Indianapolis. Judgment for plaintiff, and defendant appeals. Affirmed.

Joseph B. Kealing, Merle N. A. Walker, Newton J. McGuire, and William E. Reiley, for appellant. William J. Henley, Frederick E. Matson, and Edward E. Gates, for appellee.

MORRIS, C. J.

Appellee, American Construction Company, a corporation, sued appellant for a sum alleged to be due the plaintiff from the city under a contract for the construction of a district sewer. Appellant demurredto the complaint for the alleged insufficiency of facts. This demurrer was overruled, and defendant declined to plead further, and judgment was rendered for plaintiff for $20,709.03. From the judgment, the defendant appeals. The only error assigned is the overruling of the demurrer to the complaint.

The complaint alleges that the city of Indianapolis is a municipal corporation of the first class; that on July 10, 1907, by and through its board of public works, it adopted a resolution ordering the construction of a certain district sewer. Bids for the construction of the work were received on October 7, 1907, and appellee's bid was decided to be the lowest and best, and it was accepted, and on May 13, 1908, the contract was awarded to appellee for the agreed price of approximately $145,000. Immediately thereafter appellee commenced the work and completed the same, to the entire satisfaction of the city engineer and of the board, which accepted the work. After its completion and acceptance, on August 25, 1909, the board adopted a preliminary assessment roll, in which the total contract cost of the improvement was primarily assessed against the property in the drainage district, and no part of the cost was assessed against the city. At the final hearing the board decided that the properties in the district, primarily assessed as aforesaid, were specially benefited in the several amounts, respectively, assessed against them in the preliminary assessment, and thereupon adopted and confirmed said roll as the complete and final assessment roll, and by which the entire cost was assessed against the property benefited. At the same time the board allowed a final estimate in favor of appellee in the sum of $145,277.36.

The complaint is long, and avers facts showing that the board in all of the proceedings, from the adoption of the preliminary resolution for the construction of the work to the completion of the final assessment roll, followed the provisions of sections 117, 119, and 120 of the cities and towns act of 1905, under which the proceedings were had. Acts 1905, p. 302 et seq.; Acts 1907, p. 563; Burns' St. 1908, §§ 8722, 8724, 8725. It also avers facts showing that plaintiff performed all the stipulations required of it by the terms of the contract sued on, and performed all things required of it by the terms of the statute.

[1] Prior to the date of the preliminary hearing, the city engineer filed with the board his estimate of the total cost of the work in the sum of $146,000. After the preliminary hearing, which was had on August 7, 1907, the board decided that the drainage district was properly bounded, and that the special benefits to the property within the district, and the benefits to the city, would be equal to the estimated cost of the improvement, and ordered the sewer constructed. The notice to bidders contained the following provision: “That under no circumstances shall the city of Indianapolis be or be held responsible for any sum or sums due from said properties or the owners, for said work, or for the collection of the same, or for the payment of any bond, bond certificate, or certificates, issued to said contractor in payment of such work, except for such moneys as shall have actually been received by said city from the assessments for such improvement.” Within 10 days thereafter, certain property owners of the district, pursuant to the provisions of section 120 of the cities and towns act of 1905, filed their petition in the superior court of Marion county, averring that the several amounts of their respective assessments were excessive, and the court appointed appraisers to reassess their benefits. The appraisers reduced these assessments in the total sum of $20,709.03. These reductions in assessments were certified by the board of public works to the city treasurer, who thereupon corrected the final assessment roll to conform to the reductions made. The total reductions in the assessments made by the appraisers represented the difference between the contract price and the total amount of assessments against the property, as shown by the corrected assessment roll. Appellee subsequently demanded this sum from the appellant, and the demand was refused.

Appellant contends that municipal corporations have only such power as the statutes confer, and that these powers must be strictly construed; that, under such rule, the corporation is only liable here for the amounts collected by it from the property owners, because the contractor accepted the contract with full knowledge of the statutory restrictions, and of the provision in the notice to contractors, hereinbefore set out, “that under no circumstances shall the city *** be *** responsible for any sum *** due from said property,” etc.

Appellant also contends that, under the statute, the board had no power to order an improvement of this character that would create a liability against the city in an amount of over $5,000, and, if there is a liability against the city in the latter amount, appellee's remedy was a proceeding by mandamus. It is manifest that the provision in the notice to bidders, whereby the city disclaimed responsibility for sums due on uncollected assessments against property owners, or for the payment of bonds or certificates, is not pertinent to the issues in this cause. The appellee is not seeking to hold the city liable for any assessment made against any property, but is looking only to such property, to the extent that assessments were made against it. Neither is appellee complaining of any breach of a contract for the payment of any bond, but has presumably accepted all bonds issued as full payment, to the extent of the assessments thereby represented. Appellee's demand is for that part of the contract price, for which the board failed to provide either assessments, or bonds, or city funds, and therefore this provision in the notice can have no application to the facts in issue.

[2] Section 120 of the act of 1905 (Burns' Stat. 1908, § 8725), after providing for the final hearing on the primary assessment roll, which can be made and filed only after the completion of the construction, directs that at such hearing the board shall determine whether the several lots and parcels of land “primarily assessed as aforesaid are specially benefited in the amounts respectively assessed against them in the preliminary or primary assessment aforesaid.” The statute authorizes the board to sustain or modify, in whole or in part, the preliminary assessment, and to increase or reduce the assessments according to the special benefits received. Then follows this provision: “The board shall also have the power to determine what part, if any, of the benefits resulting from such improvement accrue to the said city, and any amount so found shall be assessed against such city on said roll and paid out of funds appropriated to the use of said board for such purpose by the common council: Provided, that not more than five thousand dollars shall be paid out of the city funds for any one improvement, unless pursuant to an ordinance specially appropriating the same for such specific improvement. The said board shall complete said roll and render its decision to all such...