Grecian v. The City of Hill City

• Decision Date: 07 May 1927
• Docket Number: 27,377
• Citation: 256 P. 163,123 Kan. 542
• Parties: FRANK GRECIAN, Appellant and Cross Appellee, v. THE CITY OF HILL CITY, GRAHAM COUNTY, JOHN W. GORDON, GEORGE B. MUNSON, LOREN J. WOLFE, PERRY WISEMAN, E. L. HALL, A. J. WILSON, I. R. MORT and C. E. KELLOGG, Appellees, and THE FIDELITY NATIONAL BANK AND TRUST COMPANY OF KANSAS CITY, MISSOURI, Cross Appellant
• Court: Kansas Supreme Court

256 P. 163

123 Kan. 542

FRANK GRECIAN, Appellant and Cross Appellee, v. THE CITY OF HILL CITY, GRAHAM COUNTY, JOHN W. GORDON, GEORGE B. MUNSON, LOREN J. WOLFE, PERRY WISEMAN, E. L. HALL, A. J. WILSON, I. R. MORT and C. E. KELLOGG, Appellees, and THE FIDELITY NATIONAL BANK AND TRUST COMPANY OF KANSAS CITY, MISSOURI, Cross Appellant

No. 27,377

Supreme Court of Kansas

May 7, 1927

Decided January, 1927.

Appeal from Graham district court; CHARLES I. SPARKS, judge.

Judgment modified.

SYLLABUS

SYLLABUS BY THE COURT.

1. MUNICIPAL CORPORATIONS -- Proper Paving Expense -- Improving Water Mains. The cost of improving water mains in a municipally owned water plant by taking out iron piping and putting in lead pipes and connections is not a proper item of expense to be included in the cost of paving, curbing and guttering the street.

2. SAME--Regularity of Proceedings--Who May Question. The state at the instance of the attorney-general or the county attorney, is the supervisor of the regularity of the proceedings of municipal officers. An individual taxpayer of the municipality cannot question the regularity of such proceedings unless the alleged irregularity results in his financial injury--as to increase his taxes.

3. SAME--Construction Bonds--Interest on Temporary Notes. A contract between a city and a trust company for the sale of improvement bonds, in which the trust company agreed to carry the temporary notes of the city at a named rate of interest, is construed and held that the temporary notes should bear the named rate of interest until the bonds were issued and sold.

Charles L. Hunt, Frank C. Baldwin and C. J. Putt, all of Concordia, for the appellant.

W. L. Sayers, of Hill City, J. D. Bowersock, Robert B. Fizzell and John F. Rhodes, all of Kansas City, Mo., for the appellees and cross appellant.

OPINION

HARVEY, J.:

This is an action by a property owner and taxpayer of the city of Hill City, owning property abutting one of the paving projects in question, to enjoin the city and its officials from issuing further temporary notes for paving improvements, and from paying those previously issued, and from issuing bonds to redeem such temporary notes and to pay the cost of such paving improvements, and to enjoin the levying of special assessments against the property of plaintiff and others similarly situated, and praying that the assessment made be set aside, and for a mandatory order that defendants restore funds of the city to their proper funds, and to enjoin the carrying out of the terms of a certain contract for the sale of bonds for paving improvements. The bank which had contracted to purchase the bonds intervened. The case was tried to the court, judgment was rendered denying plaintiff the relief sought, except as to an item of interest on the temporary notes. Plaintiff has appealed from the adverse judgment, and the intervening bank has appealed from the judgment respecting interest on the temporary notes.

The controversy grows out of street paving initiated in Hill City in 1925, and later completed. The improvements are spoken of by the parties as five separate projects. No question is raised in this court as to the legality of the proceedings in any of the projects prior to the passage of the respective ordinances authorizing the improvements, hence we need not state those proceedings. It is not possible, with the brevity necessary in an opinion, to state all the details shown by the abstract concerning each of these projects. Perhaps the following will be sufficient. As to project No. 1: The ordinance authorizing the improvement was passed August 3, 1925, and on that date the engineers' preliminary statement was filed; notice to bidders was published August 6; on August 11 the contract was executed for the work. As to project No. 2: The ordinance authorizing the improvement was passed August 11, 1925; on August 15 the contract was executed for this work. As to project No. 3: The ordinance authorizing the improvement was passed December 2, 1925; on December 4 the contract was executed for this work. As to project No. 4: The ordinance authorizing the improvements was passed December 2, 1925; on December 4 the contract was executed for this work. As to project No. 5: The ordinance authorizing the improvement was passed December 21, 1925; on December 26 the contract was executed for this work. On February 19, 1926, appraisers were appointed to value and appraise the lots, pieces, tracts and parcels of ground subject to special assessment and taxation for the improvements for all of the five projects above mentioned. On March 8 the appraisers made their report, and a resolution was passed providing for a special session of the mayor and councilmen on March 18, for the purpose of hearing complaints of persons interested in the appraisement and valuation fixed by the appraisers. Notice of this meeting was given in the official city paper. The meeting was held, but no one appeared to complain, and the assessment and appraisement, as made by the appraisers, was approved and adopted. The assessment ordinance was passed and published April 5, 1926.

On August 11, 1925, the Fidelity National Bank and Trust Company of Kansas City, Mo., made a written proposal, which was accepted, to the mayor and council, "For $ 100,000, more or less legally issued internal improvement bonds of your city delivered to us. . . . said bonds to be of denomination of $ 1,000, bearing interest at the rate of 4 3/4 per cent. . . . We will pay par and accrued interest to date of delivery. . . . We agree to carry your temporary notes at 4 3/4 per cent. This bid is to cover all bonds issued in connection with paving contracts awarded in 1925 . . ." On August 13 the city clerk had published in the official paper a notice that "On and after the 13th day of August, 1925, the city of Hill City, Kansas, will have for sale approximately $ 100,000 worth of internal improvement bonds. The city desires the best rate of interest that will bring par and accrued interest for the bonds. Purchasers of these bonds will be expected to do necessary temporary financing in connection with the paving program." On August 27 a motion was passed by the city council "That the contract entered into between the city of Hill City, and the Fidelity National Bank and Trust Company for the sale of bonds, be and the same is hereby confirmed as per terms of contract on file in the office of the city clerk." On September 27 Frank Grecian presented to the mayor and council a petition, signed by 67 residents of the city, praying that the bonds be sold as provided by law to the highest bidder, in case the state school fund commission did not purchase them, and on the same day Grecian notified the city officials in writing that he had a reliable and responsible purchaser for such bonds in any amount up to $ 100,000 at par for bonds bearing "considerably less than 4 1/2 per cent interest," or at a price "reasonably above par," for bonds "bearing 4 1/2 per cent or a higher rate of interest." The minutes of the council recited the presentation of the petition, and "as bonds had already been contracted, this petition was tabled."

Temporary notes, 44 in number, for the total sum of $ 125,227.70, were issued. The trust company has paid that amount to the city, and the city has paid such amount to the contractor and to the engineers. These temporary notes, when executed, bore a due date of June 1, 1926. They bore interest at the rate of 4 3/4 per cent from date to maturity, and Nos. 1 to 17, inclusive, provided that they should bear interest after maturity at the rate of 6 per cent, and Nos. 18 to 44, inclusive, provided that they should bear interest after maturity at the rate of 8 per cent until paid.

The city of Hill City owned a waterworks and electric light plant. At the time it was installed, some years ago, iron water pipes had been laid on or across the streets improved by the several paving projects above mentioned. The city officials thought the pipes might rust and need replacement, which could not well be done after the pavement was laid, and deemed it advisable to replace the iron pipes in such streets with lead pipes. On August 3, 1925, an ordinance was passed reciting in the preamble the street improvements authorized by project No. 1, and providing:

"That all water connections within the area of the proposed pavement and all properties not now connected but deemed advisable by the council shall be so connected with lead-pipe water connections under the supervision of the water superintendent.

"The cost of making such connections shall be considered a part of the cost of improving such streets and shall be paid for from funds derived from the sale of bonds for the improvement of said streets."

On August 11 a similar ordinance was passed with reference to street improvements in project No. 2. With reference to the other projects no ordinances were passed relating to the lead-pipe water connections, but in the completion of all of the projects (except No. 4) the iron pipes were removed and the lead pipes put in, at a total cost, as contended by plaintiff, of $ 6,975.45. Defendants admit that $ 3,672.78 for these lead-pipe connections was charged to the paving fund, but express a doubt as to whether the balance of the amount claimed by plaintiff was charged to that fund.

A few bills, aggregating $ 113, for...