Corey v. City of Ft. Dodge

Decision Date12 March 1907
Citation111 N.W. 6,133 Iowa 666
CourtIowa Supreme Court

Appeal from Webster District Court.-- HON. J. R. WHITAKER, Judge.

AN action in equity to declare void and enjoin the collection of certain special assessments. The district court dismissed the petition, and the plaintiffs appeal.-- Affirmed.

Decree Affirmed.

Wright & Nugent and A. N. Botsford, for appellants.

Mitchell & Hackler and Read & Read, for appellees.



The city of Ft. Dodge, Iowa after the usual preliminary proceedings, entered into several contracts with the Barber Asphalt Paving Company for paving certain streets or parts of streets in said city. Said contracts contained a provision by which the cost of the improvement was to be assessed against the abutting property, not to exceed in any case twenty-five per cent. of the value of the property to be so charged, and the certificates of such special assessments or taxes were to be accepted by the contractor to the extent thereof, in payment for said improvements. It was also further provided that, in case such special assessments as thus limited proved to be less than the amount earned under the contract, the deficiency was to be "paid out of the general paving fund of said city of Ft. Dodge, by warrants drawn thereon." Certain lots abutting on the improvements belonged to the city, and the extent of the paving done included several street intersections. At the date of said contracts, there was in existence an ordinance of said city, providing that the cost of paving and curbing at the intersections of streets and of one-half of the paving of opposite property owned by the city or by the United States should be assessed against the property abutting or fronting upon the improvement proportion to the linear front feet abutting thereon, subject, however to the same limitations that the total charge of the special assessment should not exceed twenty-five per cent. of the value of the lot or tract upon which it was levied. Upon the completion of the work under these several contracts, it was found that, after assessing the abutting property in proportion to the special benefits it derived from the improvements, and limiting the liability of said property to twenty-five per cent. of its actual value, there remained a deficiency to the amount of several thousand dollars. To provide for this deficiency, and make payment to the contractors, the city council, by resolution, ordered that a levy be made therefor upon the taxable property of the city under the provisions of Code, section 830, and instructed the mayor and clerk of said city to issue warrants on the funds so provided, payable to the Barber Asphalt Paving Company, in settlement of the balance due said company under its several contracts.

The appellants, who are residents and taxpayers in said city bring this action in equity to declare the warrants so issued void, and to enjoin their collection. The claim thus asserted is based on the following propositions: First That the city of Ft. Dodge, at the date of the several contracts above referred to, was indebted to the full constitutional limit and that said contracts had the effect to increase the corporate indebtedness beyond said limit, and were therefore void. Second. It is said that said contracts provided in their terms for the payment of the deficiency, if any, out of the general paving fund of the city of Ft. Dodge, while the warrants, payment of which is sought to be enjoined, were issued, not upon the general paving fund, but upon a special improvement fund. Third. Because, by the ordinance to which reference has already been made, the cost of paving street intersections and spaces opposite property owned by the city should have been apportioned to the property benefited, and not made a burden upon the entire taxable property of the city. The trial court found against the appellants upon each of these propositions, and dismissed their petition.

I. The objection based upon the constitutional limit of municipal indebtedness is not, in our judgment, well founded. Contracts for street improvements made under the statute providing therefor, the cost of which is to be assessed against the abutting property, and payment therefor made by delivering to the contractor the assessment certificates, with a special provision specifying the manner in which probable deficiencies shall be raised, do not, in our judgment, create a municipal indebtedness, within the meaning of the constitutional provision on that subject. See Davis v. Des Moines, 71 Iowa 500; Tuttle v. Polk, 92 Iowa 433, 60 N.W. 733; Clinton v. Walliker, 98 Iowa 655, 68 N.W. 431; Swanson v. Ottumwa, 118 Iowa 161, 91 N.W. 1048; Light & Power Co. v. Ft. Dodge, 115 Iowa 568, 89 N.W. 7.

It is to be said also that the statement made by the appellant of the alleged indebtedness of the city includes several items not properly chargeable as outstanding indebtedness, and fails to take account of other items which should be deducted in such computation, and we are unable to see from the record that the city's limit of valid indebtedness had in fact been reached. But, even if in error on this point, we think it is rendered immaterial by the further conclusion upon which we are entirely satisfied, that no indebtedness within the meaning of the limitation was created. Counsel say that, conceding the general rule that contracts for improvements to be paid by special assessments do not create a municipal indebtedness, yet, as the contracts in suit expressly contemplate a possible deficiency, the city does to that extent assume the relation of a debtor, because the undertaking is not accompanied by any provision for raising the necessary revenue of which said obligation may be considered an allowable anticipation.

To uphold this proposition requires an unnecessarily narrow construction of the contract and of the statute. Counsel seem to concede that, if the agreement had by its terms provided for a collection of the deficiency upon the plan found in Code, section 830, their objection would be untenable. Assuming this to be the law we are of the opinion that the contracts came within its requirements. It was not possible to say in advance whether any deficiency would be found, or its amount if found. The most the city could do in this respect was to pledge itself to meet that contingency by some appropriate fund which it had...

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