Eddy v. City of Omaha

Letton, C. Separate actions were begun in the district court for Douglas county by Frances A. M. Eddy and others, and Mattie D. Valentine and others, against the city of Omaha and others, for the purpose of obtaining injunctions against the collection of certain special assessments in repaving districts No. 48 and No. 67, and special improvement district No. 597, in the city of Omaha. These actions were afterwards consolidated and tried together. A decree was rendered in favor of all the plaintiffs, except John H. Evans and Lizzie B. Evans, against the defendants, canceling the repaving and curbing assessments complained of, enjoining their collection and removing the cloud upon the title of the real estate belonging to the several plain — 552 — tiffs caused by the assessments. From this decree the plaintiffs John H. Evans and Lizzie P. Evans have appealed, and so also has the city of Omaha, defendant. Among other things the plaintiffs allege in their petitions that the petitions to the city council for the repaving were not signed by a majority of the owners of the foot frontage on the street to be improved; that the city failed to give 30 days’ notice to property owners to select the material to be used in repaving; that there were not sufficient funds in the city treasury of the city of Omaha available to pay for the repaving of the intersections of streets and alleys at the time the improvement was ordered; that the notice of the time and place of the meeting of the board of equalization for the purpose of equalizing the repaving assessment was not given or published according to law; and allege a number of other defects in the proceedings which it is not necessary to notice. The city answered, denying the invalidity of the proceedings and setting up estoppels as. to some of the plaintiffs. The court found in its decree that the assessment was null and void for the four reasons alleged in the petition and stated above. In the briefs of appellant, the city of Omaha, it is conceded that the assessment in controversy was null and void, for the reason that proper and legal notice was never given of the meeting of the board of equalization AAdiich purported to equalize the assessments. • For this reason it Avill be unnecessary for us to examine the evidence in the case, except Avith reference to the rights of the appellants John H. Evans and Lizzie P. Evans, Avhom the court found Avere estopped from contesting the validity of the tax; with reference to those of the plaintiff Harriet G. Pritchett, Avhom the appellant city of Omaha insists appeared before the board of equalization in pursuance to the defective notice, and thereby waived all defects in the form and service of notice of the sitting of the board of equalization; and with reference to those of the plaintiff, the Omaha Loan & Trust Company Savings Bank, which the appellant city of Omaha contends is estopped to question — 553 — the validity of the special assessments, by reason of the presumption that it assumed and agreed to pay the same, having received the benefit of the same by a deduction of the amount from the appraised value of the property affected at the time it purchased it at foreclosure sale. • These concessions narrow the field of inquiry. We will first consider the appeal of John H. Evans and Lizzie P. Evans. The evidence shows that they jointly procured title to lot 11, in block 4, in Summit Reserve addition to the city of Omaha, by a deed of conveyance which contained the folloAving provision: “Subject to the state and county taxes for the year 1900, and to eight instalments for the repaving of Farnam street • in improvement district No. 597, Avhich, with interest thereon, the purchasers assume and agree to pay as a part of the consideration hereof.” By these provisions the grantees bound themselves to pay the specific special assessments Avhich were described in the deed and A\rhich are in controversy in this case. In Kruger v. Adams & French Harvester Co., 9 Neb. 526, as in the case at bar, the debt which the plaintiff assumed and agreed to pay did not constitute an actual lien upon the. premises. While it was an apparent lien, still it possessed no legal force or validity. The court held, however, that if Kruger agreed with Wells, in consideration of the conveyance, to pay off the judgment of the harvester company, he could not be said to have done equity in the premises, when he came into court to enjoin the collection of the judgment out of the land, without first paying off the judgment according to his agreement. The doctrine in this case is just and equitable, it has become the settled Iuav of this state, and it is uoav too late to attempt to change it. Skinner v. Reynick, 10 Neb. 323; Bond v. Dolby, 17 Neb. 491; Koch v. Losch, 31 Neb. 625; Nye & Schneider Co. v. Fahrenholz, 49 Neb. 276; Farmers Loan & Trust Co. v. Schwenk, 54 Neb. 657; Arlington Mill & Elevator Co. v. Yates, 57 Neb. 286; Goos v. Goos, 57 Neb. 294; Battelle v. McIntosh, 62 Neb. 647; Curtis v. Osborne — 554 — & Co., 63 Neb. 837; Omaha Savings Bank v. City of Omaha, 4 Neb. (Unof.) 563; Equitable Trust Co. v. City of Omaha, 69 Neb. 342; Hart v. Beardsley, 67 Neb. 145. There could hardly be a plainer application of this principle than in the case at bar. The purchaser obtained the benefit of the deduction from the consideration money of the amount of the eight instalments of special assessments, by reason of his agreement to pay the same. He deprived his vendor of this money upon the promise that he would pay it to the city of Omaha upon this specific special assessment. It Avould be manifestly inequitable to alloAV him to retain the money which he promised his grantors that he Avould pay, and at the same time allow him to come into a court of equity and ask it to relieve him from his agreement. As is said in Equitable Trust Co. v. City of Omaha, 69 Neb. 342: “If appellant does not propose to pay the taxes in question, what does he propose to do Avith the money he has Avithheld from the OAvner of the land?” The taxes were presumptively valid, and the OAvner of the property Avas at least under moral obligations to pay thexn. The facts in the cases cited by the appellants in their brief are clearly distinguishable from those in Avhich the principle herein stated is laid down. By the agreexxxent to pay the specific assessments, and by obtaining the benefit of the deduction of the amount of the same as a part of the consideration for the property, the appellees are estopped to maintain an action to set aside the apparent lien of these special assessments. Omaha Loan & Trust Company Savings Bank: As to the question Avhether the Omaha Loan & Trust Company Savings Bank is estopped to deny the validity of the tax, it appears that the property in controversy Avas purchased by the appellee savings bank at foreclosure sale; that upon the appraisal of the property for sale under the decree, the appraisers fixed the gross value of the same at the sum of |8,800; that certificates of liens were obtained and liens Avere deducted from the gross appraisal — 555 — as follows: Regular city taxes, $375.23; special assessments for paying in paving district No. 48, $170.23; special assessments for curbing and guttering in said district No. 48, $32.28; regular county taxes, $118.02. Total liens, $695.76, leaving the net appraisal, $8,104.24. It appears therefore that the special assessments in controversy, amounting to $202.51, were deducted from the amount of the appraisement. The property was sold to the plaintiff upon its bid of $5,425. The theory upon which the savings bank, the appellee, urges that no estoppel has arisen against its right to contest the validity of the special assessments is that, since its bid was only $441 less than twotliirds of the gross appraised value, and since it has paid the regular city and county taxes, amounting in all to $493.25, it derived no benefit from the deduction of the special assessments, and therefore comes into court with clean hands, having done equity in the premises by paying valid taxes to a larger amount than the advantage it gained by the deduction of both special assessments and regular taxes. This contention is based upon the idea that the only advantage the appellee gainéd was the difference between two-thirds of the gross appraised value and the amount of its bid; but the amount of the gross appraised value has no relation to the inquiry, and cannot be taken into consideration in determining whether or not the appellee has received the benefit of the deduction. The question is, not Avhat the appellee might bid if no liens had been deducted, but Avhat Avas actually done. When, in foreclosure sales, liens are deducted from the appraisal, a purchaser Avho buys under such appraisal avüI be presumed to have assumed and agreed to pay the liens, unless something to the contrary appears in the record. There is nothing in this case to set aside the presumption. A full discussion of the question of whether an estoppel arises under such circumstances is to be found in Omaha Savings Bank v. City of Omaha, supra, and Equitable Trust Co. v. City of Omaha, supra, also in the concurring opinion of Sedgwick, J., in Hart v. Beardsley, supra. We — 556 — are of the opinion that the district court erred in finding that the appellee was not estopped to contest the validity of the special assessments, and the decree should be modi- . fied accordingly. Harriet L. Pritchett: As to Harriet L. Pritchett, appellee, it appears that although the notice of the meeting of the city council as a board of equalization was defective, yet she filed a protest before the board as to the repaving of Farnam street, and, so far as that street is concerned, such appearance waived the defect in the notice as to her. It is therefore necessary to consider whether or not the proceedings were otherwise regular as to her. The charter of the city provides, sec. 110: “It shall be the duty of the mayor and council to give the property owners in said district 80 days from the approval and publication of the ordinance declaring such improvement necessary, to designate by petition the material to be used in the paving of the streets.” The ordinance which ordered street improvement district No. 597 repaved, which district includes the Farnam street property of appellee Pritchett, required the board of public works “to publish a notice to property owners within said street improvement district No. 597 to select the material for the pavement within their district, and to notify the council of such selection within 30 days of the publication of such notice; the hour and the day of the expiration of said 30 days to be made in said publication.” In accordance with the ordinance the board of public works published the following notice: “Notice is hereby given that 30 days will be allowed you from the first day of publication of said ordinance No. 4245 within which to designate by petition to the honorable mayor and city council of the city of Omaha the material to be used in repaving said Farnam street. Said petition must be filed with the city clerk prior to 12 o’clock, noon, August 31,1897, at which time the said 30 days will have expired.” This notice was first published on August 2, 1897, and by — 557 — its terms the 30 days were to expire at noon on August. 31, 1897. It is apparent therefore that the 30 days’ notice by publication Avas not given as required by the ordinance. The provisions allowing the OAvners of property abutting upon any contemplated street'improvement the privilege of designating the material by which the improvement is to be made are eminently just and fair. When the individual property OAvner is compelled to be charged with the burden of constructing street improvements for the benefit of the general public, as well as incidentally for his OAvn benefit, it is proper and right that he should have a voice in the determination of the material to be used. It is he Avho bears the burden. Out of his pocket comes the money to pay for the material Avhich is to be used. Provisions in a city charter which make it the dnty of the mayor and council to give the property owners in an improvement district 30 days from the approval of the ordinance declaring such improvement necessary to designate the material to be used, and provisions in an ordinance based upon said provisions of the charter which require the publication of said notice for 30 days are mandatory, and, unless waived in some manner by the property owner to be affected, the lack of such notice will prevent the council from acquiring jurisdiction to levy a tax to pay for such improvement. Morse v. City of Omaha, 67 Neb. 426. In the instant case it appears that, before the expiration of the time fixed in the notice, a petition signed by the owners of a majority of the foot frontage of the property abutting on Earnam street, and designating certain- material as the material to be used, was filed with the city clerk, and it is contended by the city that this waived the defect in the publication of the notice. This alleged waiver has not been pleaded in the answer. If the city relies upon the fact that the failure to give notice was waived by this action, it should have pleaded the facts in its answer. Not having' done so, it cannot take advantage of the alleged waiver in its proofs. No such issue was tendered in the case. The city relied upon the sufficiency of the notice; it — 558 — was fatally defective, and proof 'of circumstances tending to show a waiver by some of tbe property owners was outside of tbe issues in tbe case and cannot be considered. Tbe plea is of the nature of confession and avoidance, is new matter, and must be pleaded in order to be considered by tbe court. Lowe v. Prospect Hill Cemetery Ass’n, 58 Neb. 94; Omaha Fire Ins. Co. v. Johansen, 59 Neb. 349. We are of the opinion that by tbe failure to give notice to tbe property owners to designate material for tbe length of time prescribed, tbe council did not acquire jurisdiction to levy tbe special assessment for paving against the property of Harriet L. Pritchett within said district, and that therefore tbe decree of tbe district court with reference to this appellee is correct and should be affirmed. It appears that tbe curbing and guttering in paving districts numbered 48 and 67 were ordered after tbe streets in said districts bad been ordered paved. As tbe law stood at that time, tbe city council bad tbe power to order curbing and guttering done upon streets which bad been ordered paved, without any petition of the property owners being presented for that purpose. No limitation existed upon tbe power of tbe city authorities to charge tbe expense of such work upon tbe property abutting upon tbe improvement. For a discussion of tbe law as it then stood see Orr v. City of Omaha, 2 Neb. (Unof.) 771; City of Omaha v. Gsantner, 4 Neb. (Unof.) 52. Tbe city therefore bad jurisdiction to levy tbe special taxes for curbing and guttering in paving districts numbered 48 and 67, and such taxes were properly charged upon tbe abutting property. A number of other questions are discussed in tbe able briefs which have been submitted, but since these considerations dispose of tbe matters in controversy they will not be considered. It was suggested upon tbe argument that tbe opinion of the court was desired in regard to a number of these questions, but suffice it to say that tbe proper function of the court is to decide causes which have actually arisen and not to anticipate other controversies. — 559 — We recommend that the cause be remanded to the district court, with directions to modify its decree so as to sustain the validity of the curbing and guttering taxes in paving districts numbered 48 and 67, and to dismiss the action as to the Omaha Loan & Trust Company Savings Bank. As to all other matters the judgment of the district court should be affirmed. Oldham and Ames, CC., concur. By the Court: For the reasons stated in the foregoing opinion, the cause is remanded to the district court, with directions to modify its decree so as to sustain the validity of the curbing and guttering taxes in paving districts numbered 48 and 67, and to dismiss the action as to the Omaha Loan & Trust Company Savings Bank. As to all other matters the judgment of the district court is affirmed. Judgment accordingly.