Howard v. State, 8 Div. 464.

Decision Date26 January 1933
Docket Number8 Div. 464.
Citation146 So. 414,226 Ala. 215
PartiesHOWARD, City Clerk, v. STATE ex rel. McGARRY.
CourtAlabama Supreme Court

Rehearing Denied March 9, 1933.

Appeal from Circuit Court, Lauderdale County; J. Fred Johnson, Jr. Judge.

Petition by the State, on the relation of J. R. McGarry, for a writ of mandamus to S. B. Howard, to compel respondent, as city clerk of the city of Florence, to accept, as payment of a paving assessment, improvement bonds of the city on the same project. From a judgment awarding the writ, the respondent appeals.

Reversed and rendered.

W. H Mitchell, of Florence, for appellant.

Bowers & Dixon, of Birmingham, for appellee.

THOMAS Justice.

This is a petition for mandamus to require S. B. Howard, as city clerk of the city of Florence, Ala., to accept as payment of paving assessment, improvement bonds of that municipality on the same project, at their face value, pursuant to an ordinance of the municipality passed in compliance with the act of the Legislature of date of September 30, 1932.

The Act of September 30, 1932, amending section 2216 of the Code, as amended by Act September 10, 1927, pages 753, 769, § 45 contains, among others, the following provision: "In all cases where the property owner does not elect to pay installments, or having elected to pay in installments, fails to pay the first installment in thirty days from the date of assessment, he shall be held to have waived the right to pay in installments, and the entire assessment shall at the expiration of said thirty days become due and payable. Any city or town may, by appropriate ordinance, provide that any note or bond whether due or not, which has been issued by said municipality in connection with the financing of such improvement may be accepted by said municipality at its face value when tendered in payment of any such assessment, or assessments, or to redeem any property sold for such assessment, and said note or bond may be so accepted when tendered in accordance with the terms of such ordinance."

The ordinance adopted on the 8th day of October, 1932, pursuant to such legislative authority, reads as follows:

"1. Be it ordained by the board of commissioners of the city of Florence, Alabama, that the city clerk of said city be, and he is hereby authorized, empowered and instructed to accept in full payment, or as a partial settlement, in lieu of cash, upon any municipal improvement assessment due the city of Florence, matured improvement bonds and interest coupons at their full face value; it being understood that such bonds and coupons were issued by the city of Florence in that series of bonds based on the assessments sought to be paid. And upon receipt of such bond, or bonds, or coupons, the city clerk is authorized, empowered and instructed to credit upon such assessment the full amount of the face value of the said bonds and coupons so tendered.
"2. Be it further ordained by the board of commissioners of the city of Florence, Alabama, that the city clerk of said city be, and he is hereby authorized, empowered and instructed to accept in full payment, or as partial settlement, in lieu of cash, upon any municipal improvement assessment due the city of Florence, improvement bonds at their full face value, whether matured or unmatured; it being understood that such bonds were issued by the city of Florence in that series of bonds based on the assessment sought to be paid. And upon receipt of such bond, or bonds, the city clerk is authorized, empowered and instructed to credit upon such assessment the full amount of the face value of the said bonds so tendered."

The restriction in the act of the Legislature is that the bonds tendered in payment, or part payment, must have been issued for the improvement covered by the given assessment, and the ordinance adopted by the city contained a like limitation of such right of tender and payment by the taxpayer and bondholder.

The petition for mandamus shows that the owner (petitioner) whose lot was assessed for municipal street improvements, tendered in payment of such assessment, a matured and an unmatured paving assessment bond to the city clerk for credit on the assessment against his lot, the bonds so tendered were each against the improvement for which the assessments were made, and so tendered by the owner in satisfaction of the assessment and lien against his said property so improved and assessed.

It is further averred that said city clerk, so empowered, authorized, and instructed to receive the bonds in payment, etc., declined to accept the bonds so tendered, and declined to give the owner and payer of the assessment the required credits; that there are many like bonds outstanding against the same paving improvement or project.

The clerk demurred to the petition, setting up the invalidity of the ordinance of the city, and that of the provisions of the Act of September 30, 1932, set out above. The clerk filed his answer admitting the allegations of the petition. The judgment of the circuit court awarded the writ.

The insistence is made that, if such payment by and with the matured and unmatured bonds was invalid, the city clerk would be liable for such act in accepting payment otherwise than in money, and that his official bond would be liable therefor.

The city had the right under the municipal code to pledge the proceeds of any proposed assessments under the bond section (section 2223, Code, as amended by Acts 1927, p. 771, § 52); to pay for the work by bond (section 2224, Code, as amended by Acts 1927, p. 772, § 53); and to receive bonds issued for the work after maturity for taxes and dues. Code 1928, § 2294 (20), Acts 1927, p. 639. These statutes were amended in 1921 (Acts Sp. Sess. 1921, p. 71,§ 1), section 1401, Code 1907, in 1923 (Acts 1923, p. 13, § 1), section 2216, Code 1923; and in 1927 the amendment broadened the powers of the assessing authorities as follows: "At any time when the amount of any particular fund shall, with its accumulations, equal the amount of any one of the outstanding bonds and accrued interest entitled to payment out of such fund, the governing body of such municipality shall have authority to redeem any and all such bonds that may be presented for redemption at such times thereafter as the holders thereof may desire to present the same for redemption." Section 2294 (47), Code 1928.

And amendatory is that of 1932, containing the provision under which the city of Florence adopted its ordinance and under which the payment in question was sought to be made by giving the statute retroactive effect to bonds issued on June 1, 1923. In a sense the statute was remedial (Miller-Brent Lumber Co. v. State et al., 210 Ala. 30, 97 So. 97; Lehmann v. State Board of Public Accountancy et al., 208 Ala. 185, 94 So. 94; Folsom v. Carnley, 210 Ala. 131, 97 So. 95; Barrington's Case, 200 Ala. 315, 76 So. 81; Globe Indemnity Co. v. Martin, 214 Ala. 646, 108 So. 761), and, as such, had it a retroactive effect as to the issuance of bonds that may be received as payment? ( Board of Revenue of Jefferson County v. Hewitt, 206 Ala. 405, 90 So. 781). It may be conceded that the act was passed to remedy, as it may, the hard financial conditions of the times throughout the state. Hodge v. Joy, 207 Ala. 198, 201 (2), 92 So. 171. Under the act, stated generally, the city may accept or reject by ordinance, its beneficent provisions in accordance with its official judgment and financial requirements. The city of Florence accepted such provisions by the mandatory ordinances instructing its official to accept bonds, whether matured or unmatured, upon that improvement, if offered to be so paid by the owners of lots subject to that improvement assessment and lien. The petitioner held such matured and unmatured bonds, owed assessments on his lots, and as such bondholder conceived it of benefit to himself to pay and discharge his obligation to the city on that work and project, by tendering its bonds on the work in discharge of his duty of payment to the city for the assessments against him.

What of the rights of the bondholder who does not participate in the exchange of like evidences of the city's indebtedness? Town of Capitol Heights v. Steiner, 211 Ala. 640, 101 So. 451, 38 A. L. R. 1264. Is he injured or benefited thereby in the sense that he is protected by the Constitution? It is insisted by appellee that his primary security is more valuable, or is strengthened by reason of the city's enhanced credit; or for that its assets and limited liabilities are affected in like degree. Are answers to be found (1) in the fact that the satisfied obligations of the city, of the taxpayer, and of the bondholder, all make for a net gain, and improve the moral, financial, and legal conditions as affecting the city and property of its citizens that otherwise might be sacrificed by reason of foreclosure and sales for such assessments, and in the fact that private property will be saved to its owner; (2) in that the redemption of such property already lost to the citizen may be reclaimed by the owner, and, thereafter, bear its proportionate share of the burden of taxation by the state, county, and city; and (3) from this remedial legislation and exercise of the rights thereunder, will come the strengthening of municipal credit and enhancing of the value of securities on the very project held by the nonparticipating bondholder?

The fact must not be overlooked that the statute of 1932 and the ordinance for exchange of bonds for assessments only apply to the same improvements and assessments for which the securities and bonds were issued. So limited, is there an impairment of contract obligations of other bondholders within the interdiction of the Constitutions? To...

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