City of Pleasant Ridge v. Royal Oak Tp., No. 12

CourtSupreme Court of Michigan
Writing for the CourtREID; BOYLES
Citation44 N.W.2d 333,328 Mich. 672
PartiesCITY OF PLEASANT RIDGE et al. (MOORE, Intervener) v. ROYAL OAK TP. et al. Motion
Docket NumberNo. 12
Decision Date12 October 1950

Page 333

44 N.W.2d 333
328 Mich. 672
CITY OF PLEASANT RIDGE et al. (MOORE, Intervener)
v.
ROYAL OAK TP. et al.
Motion No. 12.
Supreme Court of Michigan.
Oct. 12, 1950.

[328 Mich. 677]

Page 334

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.

Page 335

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.

[328 Mich. 678] 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.

[328 Mich. 679] 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[328 Mich. 680] under certain conditions and extending the period over which the taxes and

Page 336

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[328 Mich. 681] 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...

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1 practice notes
  • Sessa v. Macomb County, Docket No. 192569
    • United States
    • Court of Appeal of Michigan (US)
    • 26 d2 Novembro d2 1996
    ...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 Because the bonds that were issued were limited tax obligation bonds, we may dispose of the frivolous contention made by plai......
1 cases
  • Sessa v. Macomb County, Docket No. 192569
    • United States
    • Court of Appeal of Michigan (US)
    • 26 d2 Novembro d2 1996
    ...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 Because the bonds that were issued were limited tax obligation bonds, we may dispose of the frivolous contention made by plai......

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