Gray v. City of Santa Fe, NM
| Decision Date | 31 March 1937 |
| Docket Number | No. 1474.,1474. |
| Parties | GRAY et al. v. CITY OF SANTA FE, N. M. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Myles P. Tallmadge, of Denver, Colo., for appellants.
C. R. McIntosh, of Santa Fe, N. M. (J. O. Seth, of Santa Fe, N. M., on the brief), for appellee.
Before LEWIS and PHILLIPS, Circuit Judges, and JOHNSON, District Judge.
Gray, Godbe, Vasconcells and Luckenbach, hereinafter called plaintiffs, brought this action against the City of Santa Fe to recover damages for breach of contract. The trial court sustained a demurrer to the complaint. Plaintiffs elected not to plead further and an order was entered dismissing the action.
Plaintiffs in the first cause of action of their complaint, after setting out the requisite jurisdictional facts, alleged these facts:
On August 15, 1922, the City duly adopted Ordinance No. 401. It confirmed prior proceedings taken in providing for the improvement of certain streets in the City, assessed the cost thereof against the abutting property, and provided that the assessments should become due thirty days after the ordinance became effective but that any property owner might elect to pay his assessment in ten equal installments maturing consecutively on the 23d day of August of the years 1923 to 1932, inclusive, with interest at seven per cent per annum payable semi-annually.
It declared that each assessment should be a lien on the abutting property on which it was levied and provided for a recordation of the lien.
It provided that there should be issued to the contractor assignable certificates evidencing the liability of the abutting property and the owners thereof for the payment of such assessments; that such certificates should bear interest at the rate of seven per cent per annum, payable semiannually; and that the contractor or his assigns should have the privilege of exchanging such certificates for paving bonds to be issued by the City.
Subsequent to August 15, 1922, the City adopted other ordinances in substantially the same form as Ordinance No. 401 except as to descriptions of abutting property, names of owners thereof, amounts of assessments and dates due.
The total amount of assessments levied by such ordinances was $167,000.00.
On August 15, 1922, the City duly adopted Ordinance No. 402. It referred to the prior proceedings and provided:
It authorized the City to issue paving bonds payable on or before eleven years from date "the principal and interest of which" should "be paid solely and exclusively from revenues derived from the assessments."
It provided that such bonds should be in denominations of $500.00 each, should be payable in numerical order, and should bear interest at the rate of seven per cent from date, payable semi-annually and evidenced by coupons attached to the bonds.
It provided the form of the bonds which in part read:
Pursuant to Ordinance No. 402, the City issued and delivered paving bonds in the form provided in such ordinance in the aggregate sum of $167,000.00, in denominations of $500.00 each, numbered 1 to 334, inclusive, and maturing on August 1, 1933. The City has redeemed bonds numbered 1 to 235 inclusive, and has paid the interest on all the bonds to August 1, 1933. It has failed and refused to pay bonds numbered 236 to 334, inclusive, and interest thereon since August 1, 1933.
Plaintiffs are the bona fide joint owners and holders of bonds of such issue numbered 236 to 247, 250, 253 to 274, 278, 281, 286 to 292, 300 to 302, 305 to 308, 319, 320, 323 to 334, being 65 bonds for the aggregate principal sum of $32,500.00.
$49,500.00 of such total issue are outstanding and unpaid. The unpaid assessments amount to $26,630.02. There remains in the paving fund $4,355.57.
None of the original assessments have been set aside, annulled or held void by an order of court.
The City failed, neglected, and refused to collect and enforce the delinquent assessments and provide a fund for the payment of such bonds at maturity.
Plaintiffs further alleged:
"By reason of defendant's failure, neglect and refusal diligently to collect and enforce payment of said delinquent special assessments and provide a fund sufficient for the payment at maturity of said bonds owned and held by plaintiffs, these plaintiffs have been damaged in the sum of $32,500, with interest thereon from the 1st day of August, A. D. 1933."
They prayed for damages in the sum of $32,500.00, with interest from August 1, 1933, and for general relief.
In their second cause of action plaintiffs alleged that the City issued bonds in denominations of $500.00 each, numbered 1 to 310, inclusive, and maturing July 1, 1934, under Ordinance No. 421, which is substantially like Ordinance No. 402; that the City paid and redeemed bonds numbered 1 to 147 and the interest on all of such bonds to July 1, 1934, but has failed and refused to pay bonds numbered 148 to 310 and interest thereon since July 1, 1934; and that plaintiffs are the bona fide joint owners and holders of bonds numbered 156 to 179, 182 to 185, 190 to 203, 206, 212, 213, 224 to 233, 235 to 237, 243, 244, 247, 248, 254, 255, 261, 264 to 281, 283, 287, 290 to 306, being 102 bonds aggregating the principal sum of $51,000.00. They further alleged like breaches and defaults on the part of the City and resulting damage as in the first cause of action and prayed for judgment in the sum of $51,000.00 with interest from July 1, 1934, and for general relief.
The improvements involved were made under authority of sections 90-1212 to 90-1218, inclusive, New Mexico Stat.1929.
These sections provided for the issuance of assignable certificates. They made no provision for the issuance of bonds. They provided no collection agency and the burden of foreclosing delinquent assessments rested on the certificate holders.
Prior to 1923 a practice gew up, which was followed by the City here, of enacting ordinances providing for the issuance of paving bonds in exchange for certificates and providing that the City should collect the assessments, enforce delinquent assessments, and buy in the property in the absence of bidders.
Section 1, c. 133, N.M.Sess.Laws 1923, section 90-1701, N.M.Stat.1929,...
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