Dearborn Tp. v. City of Dearborn

• Decision Date: 03 April 1944
• Docket Number: No. 5.,5.
• Citation: 13 N.W.2d 821,308 Mich. 284
• Parties: DEARBORN TP. v. CITY OF DEARBORN.
• Court: Michigan Supreme Court

308 Mich. 284

13 N.W.2d 821

DEARBORN TP.

v.CITY OF DEARBORN.

No. 5.

Supreme Court of Michigan.

April 3, 1944.

Suit in equity by the Township of Dearborn against the City of Dearborn to obtain an accounting and cortribution from the city of a proportion of the general liability incurred by the township incident to the payment of certain refunded special assessment bonds of the township for each of four water districts. From a decree dismissing the bill of complaint, plaintiff appeals.

Reversed and remanded with directions.Appeal from Circuit Court, Wayne County; Sherman D. callendar, judge.

Before the Entire Bench.

Jesse W. Bollinger, of Dearborn, for appellant.

Dale H. Fillmore, Corp. Counsel, and Richard A. Hicks, Asst. Corp. Counsel, both of Dearborn, for appellee.

Glenn C. Gillespie, of Pontiac, and Miller, Canfield, Paddock & Stone, of Detroit, amici curiae.

NORTH, Chief Justice.

The bill of complaint herein was filed by the township of Dearborn, Wayne county, to obtain an accounting and contribution from the city of Dearborn of a proportion of the general liability incurred by the township incident to the payment of certain refunded special assessment bonds of the township for each of four water districts. The defendant denies all liability. After hearing in the circuit court in chancery a decree was entered dismissing the bill of complaint. Plaintiff has appealed.

The background of defendant's alleged liability is that a substantial portion of Dearborn township territory was taken out of the township and annexed to the city of Dearborn. With the exception of a very trifling area in district No. 3 (which circumstance has no bearing upon decision herein), none of the township lands included in any of the special assessment districts has become a part of the city. The original village of Dearborn, located entirely in the township of Dearborn, was incorporated prior to May 26, 1925. On that date the village area was enlarged. The city of Dearborn was first incorporated in 1927; and included all of the territory constitution the village of Dearborn. The city of Dearborn was reincorporated and enlarged in 1928. At that time additional township territory was annexed to the city. In 1938 the township issued general obligation bonds in refunding the outstanding special assessment bonds. However, this refunding operation does not materially influence decision herein because this suit is for a statutory accounting on the basis of the original bonds issued in anticipation of collection of the special assessments.

Liability for contribution towards the payment of the indebtedness of a township by a city which has taken over a part of the township's territory is governed by statute:

‘Sec. 14. * * * The indebtedness and liabilities of every city, village and township, a part of which shall be annexed to a city shall be assumed by the city to which the same is annexed in the same proportion which the assessed valuation of the taxable property in the territory annexed bears to the assessed valuation of the taxable property in the entire city, village or township from which such territory is taken. * * *’ 1 Comp.Laws 1929, § 2250 (Stat.Ann. § 5.2093).

The city of Dearborn is a home rule city; and the question of its liability in the instant case is to be determined under the provisions of the home rule act from which we have just above quoted, rather than by the provisions of section 2344, Comp.Laws 1929 (Stat.Ann. § 5,2231), which is not a part of the home rule act but instead a 1909 amendment to Act No. 38, Pub.Acts of 1883. The circuit judge held otherwise; but in so doing an error was committed.

It is too plain for argument that the city to which township territory is annexed becomes liable for contribution to only such township indebtedness as exists as the time of annexation. The city could not be held liable to the township for indebtedness it subsequently contracted. Hence it becomes important in the instant case to determine whether the township had become actually or contingently liable on the special assessment bonds prior to the annexation of the township territory by the city of Dearborn.

District No. 1. The special assessment bonds were issued in this water district on August 1st, 1927. This was prior to the date of the annexation of any of the township territory by the city of Dearborn. It was prior to the incorporation of the city of Dearborn. Therefore, subject to the consideration hereinafter given to other defenses, it is obvious that since the territory was taken from the township and incorporated within the city subsequent to the issuance of the bonds in district No. 1, the city, together with the remaining portion of the township, is liable for the full satisfaction of this bonded obligation.

District No. 2. This water district was created in April, 1928; and the bonds were issued in July, 1928. Here again liability of the city to contribute towards the satisfaction of the deficit of the special assessment bonds for district No. 2 will depend upon whether the township territory was annexed to the city prior to the issuance of the bonds (subject of course to other possible defenses above noted). Hence it becomes important to determine the time when in the course of annexation proceedings the territory involved becomes a part of the annexing municipality and ceases to be a part of the municipality from which it is taken. This we think is specifically controlled by the following statute:

‘Sec. 13. On the filing in the office of the Secretary of State and the clerk of the county or counties within which the city is located, of a copy of the petition (for annexation), and of every resolution, affidavit or certificate necessarily following such petition, with the certificate of the board of county canvassers attached, showing that the purposes of such petition have been approved by a majority of the electors voting thereon, as provided in this act, which shall also give the number of votes cast on such proposition and the number cast for and against the same, the city shall be from that date duly and legally incorporated under and by the name designated in said petition, or the territory described in said petition shall be duly and legally consolidated as one (1) city, or attached to or detached from the city named in such petition as the case may be.’ 1 Comp.Laws 1929, § 2249 (Stat.Ann. § 5.2092).

From the foregoing portion of section 2249 it appears that the determinative date of annexation is the date of filing the result of the election on the petition for annexation with the secretary of state and the county clerk. Such result as to the second incorporation of the city of Dearborn was filed with the secretary of state and with the clerk of Wayne county in September, 1928. It therefore appears that the township territory was not annexed to the new city of Dearborn until after July 1, 1928, the date on which the special assessment bonds in this district were issued. Subject to other possible defenses hereinafter considered, it follows that the city is liable for its proportionate share of the unpaid bonds of district No. 2.

The question as to what is the city's proportionate share, or the basis of its contribution thereof, is somewhat complicated as to the bonds of district No. 2 by the following facts: The city of Dearborn was first incorporated in 1927. Incident to this first incorporation the city took over a part of the township territory. The results of this annexation election were filed September 20, 1927. Thus it appears that the city had annexed a certain portion of township territory prior to the date (July, 1928) when the bonds for district No. 2 were issued. In fixing the proportionate share of the city's contribution to the payment of these bonds, the assessed valuation of the township territory annexed to the city incident to the 1927 incorporation cannot be included. But the city of Dearborn was later enlarged by a reincorporation, and in so doing the city annexed an additional portion of the township territory. As noted above, the result of this additional annexation election was filed in September, 1928. This was subsequent to the issuance of the bonds in district No. 2 (July, 1928). It follows that the determination of the city's contribution to the payment of the bonds of this district must be based solely upon the assessed valuation of the additional township territory annexed by the city of Dearborn incident to its reincorporation and enlargement in 1928.

Districts Nos. 3 and 4. These water districts were created in October, 1928, and the bonds for these districts were issued in December, 1928. But, as noted above, prior to the foregoing dates, and in September, 1928, the result of the second annexation election had been filed with the secretary of state and with the clerk of Wayne county. In other words, the township territory taken into the city of Dearborn was annexed thereto, and ceased to be a part of the township, prior to the issuance of the special assessment bonds in water districts Nos. 3 and 4. It follows that the city is not liable for contribution on the bonds of district No. 3 or district No. 4....