Denny v. City of Spokane

• Decision Date: 08 February 1897
• Docket Number: 302.
• Citation: 79 F. 719
• Parties: DENNY v. CITY OF SPOKANE.
• Court: U.S. Court of Appeals — Ninth Circuit

79 F. 719

DENNY v. CITY OF SPOKANE.

No. 302.

United States Court of Appeals, Ninth Circuit.

February 8, 1897

This action was brought by appellant against appellee to recover judgment against it on certain street-grade warrants issued in settlement of various contracts entered into by it prior to October, 1889, for the purpose of grading the public streets of the city; the gravamen of the action being the neglect and failure of the officers of appellee to create a fund out of which to pay said claims. The defense is that the officers have done all in their power to create the fund, and that there is a want of authority to pay, on account of the limit of indebtedness of the city having been reached. At the close of the testimony, appellee moved the court for an instruction to the jury to find a verdict in favor of appellee, which motion was granted.

Section 7 of the charter of the city of Spokane Falls, approved January 29, 1886 (St. 1885-86, pp. 300, 302), reads as follows: 'The city of Spokane Falls shall have power to construct and repair sidewalks, and to curb, pave, grade plank, macadamize and gutter any street or streets, highway or highways, alley or alleys therein or any part thereof, and to levy and collect a special tax or assessment on all lots and parcels of land fronting on such street or streets highway or highways or on any part thereof, sufficient to pay the expenses of such improvement, and for such purpose may establish assessment districts consisting of all lots and parcels of land fronting on a portion or the whole of any such street or streets, alley or alleys, highway or highways as may be deemed advisable. Provided, however, that all such assessment districts shall in all cases extend back to the middle of the block fronting on such improvement; provided further, that in all assessments and levies to pay the expenses of such improvements the real estate only shall be assessed, excluding from such assessment all improvements thereon, whether the same are affixed to the land or not, and the improvements on such lands shall not be taken or assessed as any part of the land, or at all; and provided further, that unless the owners of more than one half of the land subject to assessment for such improvement, petition the council to make such improvement, the same shall not be made unless six members of the council are present and vote in favor of making same.'

By an act relating to and authorizing the collection of the assessments for local improvements by a new assessment or reassessment of the cost and expenses of making the same in cities and towns and declaring an emergency, approved March 9, 1893 (Laws Wash. 1893, p. 226), it was provided that whenever an assessment for laying out, establishing, grading macadamizing, etc., any street, avenue, or alley, or for any local improvement, 'has been or may be hereafter declared void and its enforcement under the charter or laws governing such city or town refused by the courts of this state, * * * the council of such city or town shall by ordinance order and make a new assessment or reassessment upon the lots, blocks, or parcels of land which have been or will be benefited by such local improvement. ' Section 12 of this act provides: 'Whereas the assessments for local improvements in the cities of this state have in several instances been set aside and declared void for irregularities and no adequate law now exists for re-assessments therefor an emergency is declared to exist. ' On the 14th day of July, 1888, the city of Spokane Falls (now Spokane) entered into a contract with one V. M. Massey, wherein said Massey, 'in consideration of the agreements and payments hereinafter named, and to be made by said city of Spokane Falls, hereby agrees that he will clear, grub, and grade Monroe street, in said city, * * * in accordance with the plans and specifications * * * on file with the city clerk'; that he will do said work and complete the same within a reasonable time. The city of Spokane Falls, upon its part, agrees to pay a certain sum of money specified in the contract, 80 per cent of the value of the work performed at the end of each month, to be estimated by the city engineer, and the balance upon the completion and acceptance of the work; 'and further agrees that it will proceed, as soon as its laws provide, to levy and collect a special tax or assessment upon the property within the assessment district created for said improvement for the payment of the sums herein agreed to be paid, and to collect the same, and to pay the same as herein provided; and said city expressly covenants that it will prosecute the business of levying and collecting such special tax or assessment without any delay whatever in any part of the proceedings, and in the shortest time possible under its charter and ordinances relating thereto. And it is further agreed that if, at the time any payment becomes due on this contract as aforesaid, the said city shall not have received from said special tax or assessment sufficient money with which to pay the same, it shall issue to V. M. Massey its warrant for the amount of such deficiency, payable to him or his order out of said Monroe street grade fund, not more than one year from the date of this contract, with interest at the rate of 8 per cent per annum; such warrants to be drawn in such denominations as said Massey may request. And the said city of Spokane Falls further agrees that, in case such warrants are issued and accepted by said Massey as aforesaid, it will redeem and pay them before due, if presented, as fast and whenever it collects the money from such special tax or assessment; provided, however, that warrants issued for payment accruing during progress of the work shall not be paid until the work is completed; and money received during said time shall be applied to cash payments.' It is stipulated and agreed: 'That in pursuance of the aforesaid contract the said V. M. Massey fully and completely performed the same, and that the city of Spokane Falls (now Spokane) upon its part issued the warrants set forth in the said fifth cause of action in the complaint; that the same were duly presented for payment to the treasurer of said defendant at the time mentioned in the complainant, and payment thereof was refused for want of funds; that said warrants were assigned and transferred to the Portland Savings Bank for a valuable consideration, and are now in possession of the plaintiff as receiver. * * * The balance unpaid on said warrants was, on the 25th day of June, 1895, the sum of $21,461.98, and that the defendant has taken no other or further steps to create the fund out of which such warrants are payable than as are hereinafter mentioned. * * * It is further stipulated and agreed that at the time of entering into the contract * * * and the passage of the ordinances for the grading of the several streets of the defendant, the city of Spokane Falls (now Spokane) was indebted in an amount exceeding the sum of $25,000, excluding its indebtedness for waterworks and assessments for improving streets under the provisions of section 7 of chapter 2 of the act of legislature of the territory of Washington entitled 'An act to amend an act entitled 'An act to amend an act to incorporate the city of Spokane Falls, approved November 28, 1883,' approved January 29, 1886."' On July 7, 1886, a valid ordinance (No. 33) was passed by the city council, which, among other things, provided that whenever the city shall cause any part of any street, highway, or alley to be curbed, planked, paved, graded, or guttered, or any sidewalk to be constructed or repaired in any such street, etc., 'the whole cost of such improvements shall be levied and become a lien upon the taxable real estate fronting such street or alley as may be improved as may be within the assessment district established.' Section 2 of this ordinance provides that: 'All assessment for such improvements shall be according to value, so that each lot or other smallest subdivision of real estate subject to assessment shall be held for such portion of the whole cost of the improvements within any assessment district as the value of such lot or smallest subdivision of real estate bears to the aggregate value of assessable property within said assessment district; and in fixing values all improvements upon real estate shall be excluded, and the land shall only be assessed, and the cost of any such improvements shall include all lawful charges and expenses incident to such improvements and of making and collecting the assessment thereof.' On September 28, 1887, the city council undertook to amend section 2 of said Ordinance No. 33 by Ordinance No. 83, so that the latter clause in section 2 should read as follows: 'In fixing value, all improvements upon the real estate shall be included, and the cost of any such improvements shall be assessed and included, and all lawful charges and expenses incurred incident to such improvements and of making and collecting the assessment shall be included.' Pending the collection of said assessments, the supreme court, in City of Spokane v. Browne, 3 Wash.St. 84, 27 P. 1077, decided that Ordinance No. 83, providing for and including both the land and all the improvements thereon in all assessments for the grading of streets, was void, as being in contravention of section 7 of the charter of said city, authorizing assessments on real estate only, and that assessments made under such ordinance could not be sustained. On June 26, 1894, the city passed an ordinance (No. A434), known as the 'Reassessment Ordinance,' to provide for the assessment of all lots and parts of lots or parcels of land fronting or abutting on or adjacent to Monroe street, in the city of...