Town of Windfall City v. First Nat. Bank of Newcastle

• Decision Date: 07 October 1909
• Docket Number: No. 21,226.,21,226.
• Citation: 172 Ind. 679,89 N.E. 311
• Parties: TOWN OF WINDFALL CITY et al. v. FIRST NAT. BANK OF NEWCASTLE.
• Court: Indiana Supreme Court

172 Ind. 679

89 N.E. 311

TOWN OF WINDFALL CITY et al.

v.FIRST NAT. BANK OF NEWCASTLE.

No. 21,226.

Supreme Court of Indiana.

Oct. 7, 1909.

On rehearing. Petition overruled.

For former opinion, see 87 N. E. 984.

JORDAN, J.

Appellee Bank of Newcastle has petitioned for a rehearing in this appeal on the grounds, first, that the court erred in reversing the cause upon a question not controverted by any party to the appeal, and in not deciding the only question involved in the merits of the appeal; second, in deciding that neither paragraph of the complaint, under the facts therein averred, discloses any liability against the town of Windfall City; third, in not deciding any question raised upon the assignment of the cross-errors by appellee against the school town of Windfall City and the Wildcat school township of Tipton county.

In regard to the third ground assigned for a rehearing the opinion of the court discloses that appellee's cross-errors were dismissed, for the reason that they were unauthorized. But were it conceded that these alleged errors had been properly and regularly assigned, nevertheless appellee was not entitled to have them considered, and the liability of the school corporation's property in respect to the assessments, made against it for the street improvement, determined and decided, for the reason that its original brief contained no points and authorities relied upon for a reversal of the judgments in favor of the two school corporations. See rules 22 and 23 of this court (55 N. E. v, vi). The only reference in appellee's original brief in regard to the cross-errors appears in the closing part of the argument, wherein it is said, in respect to the action of the lower court in sustaining the demurrers of the school corporations to each paragraph of the complaint: “The appellee has assigned cross-errors upon these rulings of the court. We do not insist upon these assignments of error should the case be affirmed as to the town of Windfall City. *** But if the court should be of the opinion that the assessments on the school property are valid and binding, and that by reason of that fact the town is not liable upon the bonds, then we insist that the case, as to all of the parties, should be reversed and sent back for further proceedings. *** We only present these cross-errors in order to protect the rights of the plaintiff should the court in any event come to the conclusion that the court below was in error.” Counsel, in their brief, upon the petition for rehearing, further say: “As between the appellee and the town of Windfall City our position is, and has been, that under the decisions and law of Indiana no valid assessment could be made against the public property belonging to the school corporations; that the attempted assessment of the same was an absolute nullity; that the town had a right, and was invested with the power, to improve its streets in and about the public property, and, if it contracted for such improvements, and attempted to make assessments upon such property for payment of the same, such assessments being absolutely null and void, the town would be liable for the payment of the same.”

Appellee's counsel further say that they do not controvert the decisions in the cases of Quill v. City of Indianapolis, 124 Ind. 292, 23 N. E. 788, 7 L. R. A. 681,Robinson v. City of Valparaiso, 136 Ind. 616, 36 N. E. 644,Dowell v. Talbot Paving Co., 138 Ind. 675, 38 N. E. 389,Porter v. City of Tipton, 141 Ind. 347, 40 N. E. 802, and City of Huntington v. Force, 152 Ind. 368, 53 N. E. 443, cited in the original opinion, but they assert that their position or contention is, and has been, that in a case in which a municipal corporation “having the power to improve its streets enters into a contract, by the terms of which the improvement is to be paid for by the bonds of the corporation, based upon the assessment to be made, and bonds are issued and based upon void and illegal assessments, and where by the terms of the bond the credit and faith of the municipal corporation is pledged for their payment, the corporation is liable upon the bond, and the fact that it made a void assessment which is uncollectible is no defense in a suit upon the bond.” They further assert: “Where a municipal corporation issues its bonds in the form and substance authorized by the law in payment for improvement of streets, that it has the power to improve and pay for out of general taxation; and, where such bonds are payable out of the special fund created, or to be created, by the corporation by assessments against abutting property, the holder of the bonds would be entitled to recover on the face thereof, upon the introduction of the bond and the fact that the special fund out of which it is payable has not been accumulated, would be a matter of defense by the town, and if such fund has not been created by a valid assessment against abutting property, such fact would be no defense. If the bonds are void by reason of the assessment upon which they are based being void, then the town would be liable on the original contract; it not having performed the same by creating a proper form and the issuing of a valid bond thereon, and the judgment would be supported by the original contract, and the city or town is primarily liable on the contract.” While counsel for appellee concede that the decisions in Quill v. City of Indianapolis, Robinson v. City of Valparaiso, Dowell v. Talbott Paving Co., Porter v. City of Tipton, and City of Huntington v. Force, supra, are a correct exposition of the law, nevertheless they seek to predicate a primary liability of the town, in personam, upon the mere fact that the assessments levied against the property of the school corporations as shown are valid, and not legally collectible. It is manifest that counsel have overlooked the fact that the town, in entering upon...