Tuttle v. Polk

• Decision Date: 26 October 1894
• Citation: 60 N.W. 733,92 Iowa 433
• Parties: TUTTLE v. POLK ET AL.
• Court: Iowa Supreme Court

92 Iowa 433

60 N.W. 733

TUTTLE

v.POLK ET AL.

Supreme Court of Iowa.

Oct. 26, 1894.

Appeal from district court, Polk county; W. F. Conrad, Judge.

Action in equity to recover amounts alleged to be due on assessment certificates issued for paving, and to establish liens therefor. There was a hearing on the merits and a decree in favor of the plaintiff. The defendants appeal. Affirmed.

Granger, C. J., and Kinne, J., dissenting.

J. S. Polk, for appellants.

Gatch, Connor & Weaver, for appellee.

ROBINSON, J.

In December, 1887, the plaintiff commenced against the defendants three actions in equity to recover amounts alleged to be due by reason of the paving of streets in front of different lots owned by the defendants in the city of Des Moines. The paving was done under an agreement with Regan Bros. & Co., which was under consideration in Coggeshall v. City of Des Moines, 78 Iowa, 236, 41 N. W. 617, and 42 N. W. 650. It was held in that case that the agreement was unauthorized, by reason of the failure of the city council to determine in advance the character of the paving, and the material of which it should be composed, and to give due notice of the letting of contracts therefor, and that the assesment for the paving was invalid because the council, in consequence of the omissions stated, had no power to make it. After the opinion in that case was filed the city council, acting under chapters 5 and 44 of the Acts of the 22d General Assembly, enacted in 1888, passed an ordinance in terms ratifying, adopting, and confirming what had been done previously in regard to the letting of the contract, and providing for a reassessment of the cost of the paving, and for notice thereof to the property owners. A reassessment was made according to the provisions of the ordinance, the certificates on which the three actions of plaintiff were originally brought were surrendered, and in lieu thereof certificates under the new assessment were issued. After that was done the plaintiff filed in each case an amended and substituted petition, founded upon the new certificates. Answers were duly filed by the defendants, and the three actions were consolidated, heard on the same evidence, and determined together as one. The plaintiff seeks to recover the amount of the original assessment, together with interest thereon at 10 per cent. per annum from the date of the reassessment, and 5 per cent. of the amount of principal and interest to defray the expenses of collection and for costs, and asks to have liens for the amounts to which he is entitled established against each lot or parcel of ground owned by defendants for the assessment for which it is liable. General equitable relief is also demanded. The defendants deny liability on account of the paving and assessment certificates, deny the validity of the certificates, and allege that no liability for the paving exists against them, and that the certificates are invalid, for various reasons, which are set out in the answers. The district court decreed to the plaintiff the relief he demands.

1. The appellants claim that this action is brought under sections 478 and 479 of the Code, to recover the proportion of the reasonable value of the paving for which the lots in question should be held liable, and that the defendants may plead and establish any defenses they may have to the action, and may, in that manner, inquire as to the validity of the contract under which the paving was done, and the quality and value of the material and labor furnished. The petitions contain averments which furnish some ground for the claim thus made, but the appellee, in argument, states that the actions are based solely upon the second counts of the petition, and those are founded upon the certificates. Therefore the action will be treated in all respects as seeking recovery upon the certificates alone, and not under sections 478 and 479 of the Code, excepting so far as they are applicable to such certificates. The certificates involved in this case were issued on the same contract and reassessment proceedings as was that considered in Tuttle v. Polk, 84 Iowa, 12, 50 N. W. 38. In that case it was held that the reassessment was authorized and valid. Much of what was there said is applicable in this case, and to that extent will be treated as controlling. But the validity of the reassessment is now assailed on grounds not before considered.

2. It is conceded that the improvement in question was of a kind which the city of Des Moines was authorized to make, but it is said that a valid contract therefor could not be entered into, for the reason that the city was, at the time it was attempted, indebted in the full amount authorized by the constitution, and that the contract, if valid, would have created an additional indebtedness. Section 3 of article 11 of the constitution of this state is as follows: “No county, or other political or municipal corporation, shall be allowed to become indebted in any manner, or for any purpose, to an amount in the aggregate exceeding five per centum on the value of the taxable property within such county or corporation, to be ascertained by the last state and county tax list, previous to the incurring of such indebtedness.” It is shown that the indebtedness of the city reached the limit named when the contract under which the paving was done was entered into, and at the time of the reassessment. The cost of the paving, as fixed by the reassessment, was $84,845.20; and it is stated by appellee that certificates of the character of those in suit, to the amount of nearly a million of dollars, have been issued by the city. The question to be determined on this branch of the case is whether such certificates, if valid, create an indebtedness against the city, within the meaning of the constitution.

The authority under which the city acted in entering into the agreement is found in chapter 168 of the Acts of the 21st General Assembly, enacted in 1886. The city of Des Moines is within the provisions of that act. It authorizes contracts for paving and curbing streets and constructing sewers in cities to which it applies, and provides for the issuing of bonds in payment. The cost of the improvement is to be assessed upon the property fronting or abutting upon it, and placed on the tax list of the county, and is payable at the office of the county treasurer. All money received from the assessments is to be appropriated to the payment of the interest and principal of the bonds, or certificates, if any are issued under section 16 of the act. That section is as follows: “Sec. 16. If by reason of the prohibition contained in section 3, article 11 of the constitution of this state it shall at any time be unlawful for any such city to issue bonds as by this act provided, it shall be lawful for such city to provide by ordinance for the issuance of certificates to contractors, who under contract with the city shall have constructed any such improvement, in payment therefor, each of which certificates shall state the amount or amounts of one or more of the assessments made against an owner or owners and lot or lots on account and for payment of the cost of any such improvement, and shall transfer to the contractor, and his assigns, all of the right and interest of such city to, in and with respect to every such assessment, and shall authorize such contractor and his assigns to receive, sue for, and collect, or have collected every such assessment, embraced in any such certificate, by or through any of the methods provided by law for the collection of assessments for local improvements, including the provisions of this act.” The certificates in question were issued under the authority of that section and chapter 44 of the acts of 1888. The last-named act is only designed to cure defects, and provide for the reassessment and relevy of special taxes in certain cases, and does not otherwise add to the power, if any, conferred upon the city by section 16, quoted, to create indebtedness. There is nothing in that section which makes the city in any manner liable for the payment of the certificates. It merely authorizes the transfer to the contractor or his assignee of all the right and interest of the city in the assessment, in payment of the improvements made. The plain legislative intent was to provide a means for paying for improvements contemplated by the act without the incurring of any liability on the part of the city, acting under the provisions of section 16.

It is well settled that a municipal corporation may assume an obligation to pay money, without incurring a debt, in a constitutional sense, if payment can and is to be made from the current revenues of the corporation. Grant v. City of Davenport, 36 Iowa, 396;Dively v. City of Cedar Falls, 27 Iowa, 228;Anderson v. Insurance Co. (Iowa) 55 N. W. 353. The contract under which the paving in question was done contains this provision: “It is expressly understood and agreed that the cost of the aforesaid improvement is assessable against private property, and the duty and liability of the city to said Regan Brothers and Company, or any person claiming under them, shall be confined to its power to impose and collect said assessments, and, if collectible by it, to pay the same, in certificates, to the contractors herein, or the person entitled thereto, said certificates to be collected and enforced against the property upon which they are a lien for such improvements, by the person or parties entitled to enforce the same; and it is further expressly understood that, upon the transfer of any certificate to the contractors herein for any work done by them under this contract, all further liability of the city to said contractors, or any person claiming under them, shall cease.” The obligation which the city attempted to assume by the contract was, in terms, confined to its power to impose and collectassessmentsfor the improvements,...