City of Louisa v. Horton

• Decision Date: 07 November 1935
• Citation: 93 S.W.2d 620,263 Ky. 739
• Parties: CITY OF LOUISA v. HORTON.
• Court: Kentucky Court of Appeals

93 S.W.2d 620

263 Ky. 739

CITY OF LOUISA v. HORTON.

Court of Appeals of Kentucky

November 7, 1935

Rehearing Denied May 19, 1936.

Appeal from Circuit Court, Lawrence County.

Suit by the City of Louisa against Mary B. Horton. From the judgment the plaintiff appeals and the defendant cross-appeals.

Affirmed on cross-appeal, and affirmed in part and reversed in part on original appeal, and cause remanded, with directions.

John T Diederich, of Ashland, for appellant.

Woods Stewart & Nickell, of Ashland, for appellee.

RICHARDSON Justice.

The city council of Louisa, by ordinances not here questioned, directed the paving of Lady Washington, Madison, Franklin, and Clay streets. The improvement of each of them was made in pursuance to the ordinances and in accordance with a contract entered into between the city and a contractor. They were accepted and approved by the city council. Petitions asking for the improvements were lodged with the city council by a number of the property owners, but no one of them was signed by Mary B. Horton. The city council, by a vote of four members-elect, at a regular meeting, as authorized by section 3643-3, Kentucky Statutes, caused the improvement on each street to be made on the 10-year plan.

The separate assessments of the costs of improving her lots are:

Madison street

Paving 69.5 @ 5.78 $ 401.71

Sewerage 35.82

Franklin street

Paving 208.7 ft. @ 5.6624 1181.57

Sewerage 105.40

Lady Washington street

Paving 208.7 ft. @ 5.602 1168.97

Sewerage 104.25

Clay street

Paving 208.7 ft. @ 4.25985 889.01

Paving 165 ft. @ 3.96145 653.64

The amount and dates of the assessments are not now disputed. The same were directed to be paid out of the city treasury, and annually placed on the tax list of the city taxes for collection as other taxes.

This action was filed in the name of the city on July 8, 1932, to enforce the improvement lien on each lot on which the cost of the improvement had been assessed in accordance with its ordinances to satisfy the balance of the costs of the improvement on Lady Washington and Clay and the whole costs of the improvement on Franklin and Madison. In her answer, she admitted that the improvement on each street had been made and assessed on the 10-year payment plan, but alleged that the cost assessed against each lot was greater than 50 per cent. of the value thereof. Also, that the assessment was placed upon the tax books of the city to be collected at the regular time of collecting other taxes, but alleged "that more than five years elapsed next after said installment became due and payable and that by virtue of the statute and ordinances of the city, the whole of the street assessment became due and payable, and the same has remained in default and unpaid for more than five years next after the installment was due and payable and by reason thereof, the whole amount" "is barred by the five-year statute of limitations, being section 2515, Kentucky Statutes, in such cases made as provided." She alleged that the ordinance of the city, fixing the assessment on the abutting property, contains this statement: "The assessments may be collected like other taxes, or, the city may at any time, after the installment remains delinquent for thirty days, by a suit in equity, enforce its lien with all the unpaid installments with interest at the rate of to date of satisfaction thereof and its costs expended. *** The assessments thus made against property fronting, abutting or bordering on said improvements shall be collected like other taxes, or the city may at any time after the installment remains delinquent for thirty days by a suit in equity, enforce its lien on all unpaid installments and interest to date thereon to date with its costs expended."

The city, in avoidance of the plea of limitation, denied the installments had become due or payable, either by virtue of the statute or ordinance, or that the same were barred by the statute of limitations of five years; and further averred that she had made payments on the costs of two of the improvements, and, in consideration of the city not bringing suit against her to enforce its improvement liens, she had promised to pay the costs of the improvements as assessed against her property, and that she had continued "to make said promises and that the city of Louisa and its officials relied thereon, up to and including sometime in March or April 1931," and it "did forego to bring a suit against her to enforce a lien against her property and that said forbearance on the part of the city was brought about by her promise to pay," and by reason of the payments aforementioned, and her promises to pay the costs of the improvements, she was estopped to rely on the statute of limitations as to either of the improvements. Other pleadings were filed completing the issues.

The defense that the cost of either improvement was greater than 50 per cent. of the value of the improved lots is not now presented in this court, except as to one lot. As to it, she contends that the city failed to introduce evidence showing the cost of the improvement of this particular lot was not greater than 50 per cent. of its value. This argument overlooks the rule that the presumption is that the city council, when making the assessment in accordance with the statute, observed and obeyed the statute, and did not make it in excess of 50 per cent. of the improved value of the lot.

If the cost of its improvement exceeded 50 per cent. of its improved value, the burden was upon her to establish the allegation of her answer in this respect, and not upon the city to prove the negative. City of Williamsburg v. Perkins et al., 240 Ky. 160, 41 S.W.2d 915.

The difficult and perplexing question is the correctness of the decree of the trial court enforcing the liens on the different lots. It declared a lien of $1,273.22, with interest, subject to stated credits in favor of the city on the lot fronting Lady Washington; $889.01, with interest from June 14, 1927, subject to credits of $137.34 on lot fronting Clay. The petition, in so far as it sought to enforce liens for the improvements fronting Franklin and Madison, was dismissed. The city appeals from so much of the judgment as dismissed its petition, and Mrs. Horton prosecutes a cross-appeal from so much of it as adjudged liens on the property fronting Lady Washington and Clay streets.

To appropriately dispose of the contention of the parties, it is essential to consider the statute authorizing the city to make the improvements, and the making of them on the 10-year payment plan.

The parties agree in their pleadings that the improvement on the different streets was directed to be made, and was made, in conformity with the ordinance of the city adopted by four members-elect of the city council and on the 10-year payment plan. The payments made thereon and the dates thereof are not disputed. Only the effect of the payments on the different improvements is debated in the briefs of the parties. By taking the total cost of each improvement and dividing it by ten, the amount of the annual installment due and payable on the 10-year payment plan may be ascertained. The same, with interest, is payable in 10 equal installments, and each installment is due annually, "at the time the first payment of city taxes next succeeding the time such assessment is placed upon the tax list," "and all unpaid installments" "in default," "at the option of the city or of any bondholder whose bond or bonds or interest thereon are in default, forthwith become due and payable." And a suit therefor in the name of the city may be instituted. Section 3643-7, Kentucky Statutes.

It does not appear that when Mrs. Horton paid the $137.84 on Clay, or either of the four payments on the Lady Washington, improvement, she directed the application of the payments to any particular installment due on either improvement.

It is an accepted rule that if a debtor makes a payment where the amount is payable in installments, and does not direct the application of the payment, the creditor has the right to appropriate the sum paid to whichever installment he desires, unless one of them is not due, in which case it is his duty to apply the payment to the one due. And, generally, where neither the debtor nor the creditor has applied the same, the court will make the application to the payment of the most precarious or the older, if both are due. Anspacher v. Utterback's Adm'r, 252 Ky. 666, 68 S.W.2d 15.

It is equally as well established that a partial payment on an obligation made before it is barred by limitation is prima facie an acknowledgment that the residue is unpaid and of a continuing liability therefor, and suspends the operation of the statute between the accrual of the cause of action and the date of that payment. Hopkins v. Stout, 6 Bush, 375; English v. Wathen, 9 Bush, 387; Miller's Adm'r v. Jolly, 5 Ky. Law Rep. 324. Or in other words, a payment starts the running of the statute of limitation from the date of payment. Richardson's Adm'r v. Morgan et al., 233 Ky. 540, 26 S.W.2d 32. The same principles govern where the obligation is secured by a lien on real property. Clift v. Williams, 105 Ky. 559, 49 S.W. 328, 51 S.W. 821, 20 Ky. Law Rep. 1261.

A promise, made before a debt is barred, serves to suspend the running of the statute or to prolong the statutory limitation by cutting off the antecedent time, and the action to recover must be brought on the original obligation. If, however, the debt is barred at the time of the new promise, it must be brought on the new promise. Hopkins v. Stout, supra; Carr's Ex'r v. Robinson, 8 Bush, 269, 274; Gilmore v. Green, 14 Bush, 772; Rankin v Anderson, 69 S.W. 705, 24 Ky. Law Rep. 647...