City of Pontiac v. Talbot Pav. Co.

• Decision Date: 19 May 1899
• Docket Number: 563.
• Citation: 94 F. 65
• Parties: CITY OF PONTIAC v. TALBOT PAV. CO.
• Court: U.S. Court of Appeals — Seventh Circuit

94 F. 65

CITY OF PONTIAC v. TALBOT PAV. CO.

No. 563.

United States Court of Appeals, Seventh Circuit.

May 19, 1899

Judgment is entered against the city of Pontiac, plaintiff in error and defendant below, in an action on the case, upon a general finding by the court that the defendant is guilty, and that plaintiff's damages are assessed at the sum of $12,343; a trial by jury being waived. The alleged cause of action, as set out in the several counts of the declaration, is failure and neglect on the part of the municipal authorities to provide 'for a new special tax assessment ' against contiguous property, to pay amounts earned under a contract for the paving and improvement of certain streets under the following state of facts: On June 27, 1895, an ordinance was adopted by the city of Pontiac for the improvement of certain streets, whereby the expense of street intersections was to be paid by general taxation, and 'the remainder of cost of said improvement should be paid for by special taxation to be assessed, levied, and collected against real estate abutting on the lines of said streets so ordered to be improved,' in accordance with the provisions of article 9 of chapter 24 of the statute of the state of Illinois entitled 'An act to provide for the incorporation of cities and villages. ' The general act so referred to declares, by section 49 of article 9 (1 Starr & C.Ann.St.Ill (2d Ed.) p. 777 et seq.), that 'all persons taking any contract with the city or village, and who agree to be paid from special assessments, shall have no claim or lien upon the city or village in any event, except from the collection of the special assessment made for the work contracted for ' Section 64 of the same article provides that vouchers issued for the work shall be subject to like condition whether the holders are the original contractors or their assigns. Proceedings were taken under the ordinance, the special tax assessments were made and confirmed, and thereupon a contract was entered into between Talbot Paving Company, the plaintiff below, and the city of Pontiac, whereby that company, as the lowest bidder, undertook to 'furnish all labor and material for the construction of said local improvement' for the aggregate sum of $15,168.90, to be paid when completed and accepted,-- 'and when the special tax levied under said ordinance, or any special tax which shall thereafter be levied by said city, upon the property contiguous to said improvement, should be collected,' and also when the general tax provided for the cost of street intersections was collected; and the contract further provides, in express terms, that 'they shall make no claims against said city, in any event, except from the collections' so referred to, and that the contractors 'take all risk of the invalidity of any such special tax. ' The work was performed by the contractor and accepted by the city, but payment was not made, except for the cost of the intersections, raised by general tax, and portions of the special assessments which were paid in by certain property owners. The balance thus left unpaid was $10,567.33, for which 'local-improvement vouchers' were issued, reciting that they were to be paid out of the special assessments when collected, and that the city was exempt from other liability. The declaration states that the failure to collect the special taxes in the first instance arose out of the prosecution by lot owners of an appeal to the supreme court of the state, which resulted in a judgment 'holding the said ordinance providing for said special tax assessment invalid, thereby rendering it impossible, under said ordinance, to collect said special tax from said property to pay the balance due the plaintiff. ' Bradford v. City of Pontiac, 165 Ill. 612, 46 N.E. 794, is cited in the briefs as the case so referred to. After this decision, the Talbot Paving Company presented its petition to the city council for the adoption of a supplemental ordinance 'for the assessment of a special tax upon the property contiguous to said improvement' to pay the balance due, but the city council failed to make provision to that end, and the action rests upon the allegation of negligence and willful refusal on that behalf. The defendant demurred to the declaration, stating several grounds, but the demurrer was overruled, and the defendant, being required to plead instanter, filed its plea of not guilty, and trial before the court proceeded upon the merits.

F. W. Winkler and A. C. Norton, for plaintiff in error.

W. T. Whiting, for defendant in error.

Before WOODS and JENKINS, Circuit Judges, and SEAMAN, District Judge.

SEAMAN District Judge, after making the foregoing statement, .

The general finding by the court clearly determines all issues of fact. Fourth Nat. Bank of St. Louis v. City of Belleville, 53 U.S.App. 628, 27 C.C.A. 674, 83 F. 675, and cases cited. But it is not conclusive on all the questions involved, as contended on behalf of the defendant in error . Its utmost effect is to limit the inquiry on review 'to the sufficiency of the declaration, and the rulings, if any be preserved, on questions of law arising during the trial. ' Lehnen v. Dickson, 148 U.S. 71, 72, 13 Sup.Ct. 481. In the case of general verdict on a trial by jury, the finding establishes all the material facts which are alleged in the declaration. If, however, the declaration on which either verdict or finding must rest 'fails to state a cause of action, and clearly shows that upon the case as stated the plaintiff cannot recover,' the error is not cured by verdict, and is not waived by answering and proceeding to trial after the demurrer is overruled. Teal v. Walker, 111 U.S. 242, 246, 4 Sup.Ct. 420. In such case, there is no foundation for the judgment, and that inquiry is clearly presented for review on this record. Whether considered as raised by the demurrer, or upon the objections and exceptions covering all the testimony to support the declaration, or upon the facts stated and found, is not material.

The defendant in error entered upon the performance of its contract for the street improvement under the express statutory provision that payment could be made solely out of special assessments against property abutting on the improvement, and that the contractor should 'have no lien or claim upon the city * * * in any event, except from the collection of the special assessments made for the work contracted for. ' The ordinance by which the paving in question was authorized and let expressly referred to this statute; this condition of payment was clearly stipulated both in the contract and in the vouchers, which were finally issued and accepted for the unpaid installments in controversy; and the contract further provided that the contractor 'shall take all risk of the invalidity of any such special tax, the said city not to be liable in any event by reason of the invalidity of said special tax assessment or any of them, or of the proceedings thereon, but only for failure to collect the same, the same being collectible in law. ' Proceedings were taken, and the...