Judd v. City of St. Cloud
| Decision Date | 22 May 1936 |
| Docket Number | 30,789 |
| Parties | ERNEST S. JUDD AND OTHERS v. CITY OF ST. CLOUD |
| Court | Minnesota Supreme Court |
Action in the district court for Stearns county to recover on certain improvement revolving fund warrants, now past due and unpaid, issued by defendant city. The court, Anton Thompson Judge, made findings adverse to plaintiffs, who appealed from the judgment entered. Affirmed.
Municipal corporation -- creation of special fund -- contracts of city -- payments thereunder.
1. When a municipal corporation by authority of law creates a particular fund with reference to which it contracts, any indebtedness arising on such contract is payable therefrom only.
Evidence -- presumptions -- notice as to applicable law.
One who purchases a municipal warrant is charged with notice of the law under and by virtue of which such obligation is issued.
Municipal corporation -- improvement warrants -- payment -- rights and remedies.
2. Upon the facts found by court and set forth in opinion held that trial court was right in finding that there was no breach of trust on the part of defendant city's officers authorizing recovery upon certain warrants issued by defendant and upon which plaintiffs seek recovery as general obligations of defendant city.
Municipal corporation -- improvement warrants -- payment -- rights and remedies.
3. Recovery cannot be had as for money had and received where there is no unjust or other enrichment going to the one sought to be charged.
Costs -- prevailing party.
4. Costs and disbursements are governed by statute. 2 Mason Minn. St. 1927, § 9473. As defendant prevailed upon issues made by pleadings and litigated at trial, court correctly found that defendant should have its costs and disbursements.
AFTER REARGUMENT.
April 16, 1937.
Municipal corporation -- public improvements -- transactions with municipal officers -- presumptions.
5. Those dealing with a municipal corporation in the matter of public improvements are conclusively presumed to know the extent of the power and authority possessed by the municipal officers with whom they deal.
Municipal corporation -- improvement warrants -- payment.
6. Involved improvement warrants were issued by defendant pursuant to its home rule charter, c. XII, § 178. Held that authority granted thereby is limited to special fund created to pay for such improvements, and defendant city cannot be held generally liable as it has faithfully done everything required of it in the way of ascertaining the cost and providing for payment by levying assessments against benefited property. (Following and applying rule in Leslie v. City of White Bear Lake, 186 Minn. 543, 243 N.W. 786.)
Municipal corporation -- improvement warrants -- payment.
7. Warrants of the type involved in this suit, being purely contractual, constituted a charge or claim only against the particular fund out of which promised payment was to be made.
Municipal corporation -- improvement warrants -- payment.
8. Treating defendant as trustee of its permanent improvement revolving fund, where it affirmatively appears that fund created for meeting payments of a particular improvement, to which alone warrants held by plaintiffs relate, has been exhausted without city's fault, held that plaintiffs may not resort to the general improvement revolving fund for contribution, as the result would be to deprive other warrant holders against such other special improvements of their security and to their ultimate loss.
Municipal corporation -- assessments for benefits -- authority to levy.
9. The foundation for authority to levy special assessments is the benefit which the object of the assessments confers upon the owner of the benefited property. The theory is that the owner does not in fact pay anything in excess of what he received by reason of the improvement.
Municipal corporation -- improvement warrants -- issuance -- validity.
10. Warrants held by plaintiffs were intended to be in renewal or in lieu of original warrants issued against a particular fund. Such new warrants amounted to a substitution of one creditor for another. Plaintiffs are not in position to question validity of, or city's authority to issue, such warrants, as they are charged with notice of charter limitations and could acquire no greater rights against the city than the officers thereof were authorized to grant.
Question not decided.
11. The rights of creditors of a public body to full or pro rata payment when fund out of which obligation is payable is insufficient to pay all like obligations of equal dignity are not directly involved here. No opinion is expressed regarding same.
Junell, Driscoll, Flectcher, Dorsey & Barker, Charles B. Howard, and Hugh H. Barber, for appellants.
Allen A. Atwood, City Attorney, Atwood & Quinlivan, and Phillips & Sherwood, for respondent.
Suit was brought by plaintiffs as a warrant-holders' committee on behalf of some 70 individuals who are owners of $287,800 of improvement revolving fund warrants issued by defendant city. The warrants involved are past due since October 1, 1929, and interest is unpaid since October 1, 1928.
Tried to the court, the findings were that the warrants are valid obligations and wholly unpaid; also that they are not general obligations of the city but payable solely out of special assessments for the particular improvement mentioned in each such warrant. Judgment in conformity with the findings was duly entered, and plaintiffs appeal.
Defendant is operating under a home rule charter adopted in 1911. The warrants involved were issued pursuant to c. XII, § 178, of the charter entitled "Local Improvements and Special Assessments." As this section is of vital importance to the decision the same will be found in the margin. [1]
Plaintiffs in their brief say: therein. In view of this situation it is necessary to recite rather fully the findings of the court.
The administrative body of defendant is composed of three members: The mayor, also known as commissioner of public affairs; the treasurer, also known as commissioner of finance; and the commissioner of streets and public improvements.
Prior to 1919 a large area within the westerly boundaries of defendant city had been and was then rapidly developing as an industrial and residential district and comprised approximately one-third of the total area of the city. The land was flat and inadequately drained and was wholly without storm or sanitary sewage facilities and without a water supply system. Because of an insistent demand on the part of owners and residents within that area, the city commissioners, by appropriate resolution, directed the city engineer to prepare plans, specifications, and an estimate of cost of the construction of a trunk line sewer to be known as the "Stone Arch Sewer," to run in a generally westerly direction to the westerly boundary of the city, a distance of about three miles. Pursuant thereto the city engineer prepared and submitted to the commission plans and specifications for such sewer, together with an estimate of costs. These plans and specifications were duly approved by the commission on June 28 of that year and designated as "Improvement No. 368." In conformity with the quoted section of the charter, the commission by resolution determined that the entire cost of the new project should be assessed against the property benefited thereby. Some time thereafter the city appropriated $9,347.66 from its general fund toward the cost of the new improvement, that having been computed as the city's pro rata share thereof. Appropriate assessments for benefits were duly made and confirmed by the commission and levied against benefited property in the aggregate amount of $435,845.63. A contract for the construction of the improvement was duly made, the cost thereof being $467,887.06. The contract was duly completed and the contractors paid on December 2, 1922. An additional assessment to cover the balance of the cost of the improvement, in conformity with the quoted section, was thereafter made and levied in the sum of $23,918.21.
Also, in 1919 the commission determined to lay a water main in the same trench as the trunk line sewer hereinbefore referred to as improvement No. 368. This was duly designated "Improvement No. 369." The cost of that project was $70,668.84. Pursuant to resolution, an assessment of one dollar per front foot was levied against adjacent property amounting to $19,726.82. There was appropriated out of the waterworks fund of the city $49,123.88, that sum being determined as an appropriate and proper contribution to the cost of the particular improvement.
During that year the commission also determined to lay a trunk line sewer extending in a southerly direction and at right angles to the sewer referred to in improvement No. 368. This was designated "Improvement No. 370." That work was completed in July, 1921, and the final payment upon the contract for its construction was made July 17, 1922. An assessment in the amount of $55,610.33 was levied against benefited property. As the city's portion of this particular improvement $10,070 was appropriated from the general funds of the city. The total cost of this project was $66,099.40.
To finance these respective improvements the commission, by appropriate resolutions, issued warrants in anticipation of the collection of the assessments...
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