Gulf Bitulithic Co. v. Scanlan , 91 S.W.2d 814 ( 1935 )

This litigation was begun by a suit instituted in 1926 by appellant Gulf Bitulithic Company against the four living children of T. H. Scanlan, deceased, individually, and also as a business firm operating under the firm name of "T. H. Scanlan Estate." The purpose of the suit was to recover the amount due on a paving certificate issued to the plaintiff by the city of Houston on June 5, 1925, against the T. H. Scanlan Estate and his then seven living children, and to foreclose a lien upon the property of defendants fixed by paving proceedings by the city council of the city of Houston. Judgment was rendered in the suit in favor of appellant for the amount due upon the certificate, together with reasonable attorney's fees as found by the jury trying the case. The defendants in that suit appealed. That appeal was heard and decided by the Austin Court of Civil Appeals, and the judgment of the trial court affirmed. Scanlan et al. v. Gulf Bitulithic Co., 27 S.W.2d 877. A writ of error from that judgment was granted by our Supreme Court, and upon the hearing in the Supreme Court the judgment was reversed and the case remanded. 44 S.W.2d 967, 970, 80 A.L.R. 852.

The opinion of the Commission of Appeals, which was approved by the Supreme Court, disposes of the case and the numerous questions presented in the application for writ of error in the following language:

"We have duly considered all the other complaints of the plaintiffs in error, which go to the validity of the assessment in question, and find no merit in any except the one which relates to the failure to apportion liability for the assessment that was levied in the lump sum of $7,810.22.

"Since the assessment in the form that it was levied is invalid, a recovery on the certificate, as it stands, cannot be had. We therefore recommend that the judgment of the trial court and that of the Court of Civil Appeals, affirming same, be reversed, and that the cause be remanded, without prejudice to any proceeding which any of the parties might see fit to institute in the premises."

The mandate of the Supreme Court issued on its judgment on March 22, 1932, remands the case "to the district court for further proceedings in accordance with the opinion of this court."

When the further proceedings suggested in the opinion of the Commission of Appeals was had, only three of the Scanlan sisters were living, each of the other sisters having previously died. There was no administration nor necessity therefor on the estate of any of these deceased sisters, and their interest in the property involved in this proceeding had passed by inheritance to the three surviving sisters in equal proportions.

In this state of facts, the appellant company on June 22, 1932, filed with the city council of the city of Houston a petition to correct and amend the ordinance of June 15, 1925, by which the original assessment was made, so as to separately assess against each of the three appellees her pro rata share of the cost of the street improvement for which the original assessment was made, and asking that a separate lien be fixed against the individual one-third interest of each of the appellees in the property.

On June 22, 1932, the city of Houston by resolution duly granted the petition of appellant Gulf Bitulithic Company, and provided for a hearing to be given appellees thereon on July 6, 1932. Notice being given in accordance with the city charter and said resolution, the hearing was held and was closed on July 13th. Appellees appeared at said hearing by their attorney herein and filed written protest. By ordinance dated July 13, 1932, the city council corrected and amended the ordinance of June 15, 1925, so as to apportion the original assessment of $7,810.22 and the lien securing same among and against appellees in the sum of $2,603.40 2/3 each; the sums so assessed against each appellee being declared to be a lien on her undivided one-third interest in said property. Each appellee was given the right to pay the sum levied against her and thereby release her interest in the property. The ordinance further provided for issuance of assessment certificates to Gulf Bitulithic Company, and the contents thereof. The assessment ordinance of June 15, 1925, remained in full force and effect and unimpaired except as expressly corrected and amended.

On September 30, 1932, appellant company filed its third amended original petition seeking recovery against each of the three appellees upon the corrected certificates issued under the ordinance of July 13, 1932.

In the meantime, on July 23, 1932, each of the three Scanlan sisters, against whom the corrected certificates fixing the separate liability of these heirs was issued by the city council on June 13, 1932, brought separate suits against the appellant company and the city of Houston seeking a cancellation of the corrected certificates, and all of the proceedings on which they were based, on various grounds, which will be hereinafter stated as may be deemed necessary in deciding the questions presented by this appeal. Each of these petitions further pray for removal of the cloud cast on the title of plaintiffs' property by the alleged unlawful proceedings of appellants. The defendants in these suits by appellees filed answers and pleas in abatement to the petitions of each of the appellees in the several suits brought by them. The ground upon which the pleas in abatement were based is in substance that the plaintiffs in the several suits cannot now raise any question as to the amount of the original assessment against their property for the following reasons:

"That in truth and in fact on June 15, 1925, the City Council of the City of Houston made and entered a final assessment ordinance creating and fixing a joint and several assessment and lien against T. H. Scanlan, M. E. Scanlan, Carrie Scanlan, Kate Scanlan, Charlotte Scanlan, Lillian Scanlan, Alberta Scanlan, and Stella Scanlan, and on the property described in plaintiff's petition, in the principal sum of $7,810.22, with interest at the rate of seven per cent. (7%) per annum from June 15, 1925, with reasonable attorney's fees; that suit was brought upon said assessment of June 15, 1925, against plaintiff and others, and cause was appealed to the Supreme Court of the State of Texas, and the Supreme court of the State of Texas reversed and remanded the case to the District Court of Harris County, Texas, solely on the ground that the joint assessment of June 15, 1925, was unenforceable. That after the Supreme Court had handed down said decision, the Gulf Bitulithic Company filed its petition before the City Council of the City of Houston praying that the ordinance of June 15, 1925, be corrected and amended so as the owners of said property be assessed separately, and the City Council did on July 13, 1932, correct and amend the said ordinance of June 15, 1925, so as to separately assess against plaintiff and her sisters, Kate Scanlan and Stella Scanlan, the sum of $2,603.40 2/3.

"That prior to the assessment ordinance of June 15, 1925, the plaintiff in this suit, as well as all of her sisters and owners of the aforesaid property, were accorded a hearing before the City Council to contest the assessment or any error, invalidity or irregularity in the assessment or the question of special benefits, and they did not appear at said hearing and the said hearing was duly and legally closed, as required by the Charter of the City of Houston, and they did not file any suit within ten (10) days after the close of the hearing as provided by the Charter of the City of Houston, to set aside the said assessment of June 15, 1925, and that, therefore, the plaintiff in this suit does not now have power or authority to bring and prosecute this suit based upon the ordinance of July 13, 1932, correcting and amending the ordinance of June 15, 1925. Therefore this suit should be in all things abated."

Appellants further demurred generally to these petitions on the grounds set out in their pleas in abatement. On motion of appellant company, the trial court, on October 26, 1933, entered an order consolidating the three separate suits brought by the respective appellees with the suit brought by appellant company. In his order of consolidation the trial court further ordered and directed that the parties in the consolidated causes re-plead their several pleas in abatement and the answers thereto. This order was complied with by all the parties.

Upon the trial, after the conclusion of the evidence, the appellees asked for an instructed verdict in their favor. The court refused this request, but took the case from the jury and rendered judgment for appellees. In passing upon the motion for an instructed verdict, the judgment contains the following recitals: "Whereupon the court stated to the parties that he would take the case away from the jury on the motion of the said defendants, Kate Scanlan, Lillian Scanlan and Stella Scanlan, for a peremptory instruction in their favor on the merits, and would render judgment in favor of the said Kate Scanlan, Lillian Scanlan and Stella Scanlan on the evidence introduced by the plaintiff, Gulf Bitulithic Company, such action to have the same force and effect as if the peremptory instruction was given and a verdict in accordance therewith returned by the jury, to which action of the court the plaintiff, Gulf Bitulithic Company, and the defendant, the City of Houston, excepted."

The judgment then proceeds as follows:

"It is, therefore, on this the 15th day of December, A.D. 1933, considered, ordered, adjudged and decreed by the court that all pleas in abatement herein be, and the same are hereby, overruled, to which all parties except.

"It is further ordered, adjudged and decreed by the court that the plaintiff, Gulf Bitulithic Company, take nothing by this suit, and that, as to the cause of action asserted by said Gulf Bitulithic Company against defendants, Kate Scanlan, Lillian Scanlan and Stella Scanlan, go hence without day and recover of and from plaintiff, Gulf Bitulithic Company, their costs of suit in this behalf incurred.

"It is further ordered, adjudged and decreed by the court on the cross-action of the cross-plaintiffs, Kate Scanlan, Lillian Scanlan, and Stella Scanlan, as against the cross-defendants, Gulf Bitulithic Company and the City of Houston, that the ordinance of assessment dated July 13, 1932, being the ordinance referred to in the pleadings of all parties hereto, be, and the same is hereby canceled and declared to be invalid and unenforceable, and that the said Kate Scanlan, Lillian Scanlan and Stella Scanlan do have and recover of and from the said Gulf Bitulithic Company and the City of Houston all costs of suit in connection with such cross-actions, for which they may have their executions.

"To which judgment of the court said Gulf Bitulithic Company and said City of Houston except."

The recitals, it seems to the writer, make the judgment as a whole confusing and contradictory. The facts in the case are undisputed. These undisputed facts material to the issues presented on this appeal are set out in the respective pleas of abatement filed by the parties, and the judgment in effect sustains the pleas in abatement filed by the appellees, which it in express words refused to sustain.

The judgment refers to the merits of the case. The primary purpose of judicial investigations is to determine cases upon their merits, and such is the constant endeavor of our courts. The undisputed evidence shows that after due notice as required by the statute and the charter and ordinances of the city of Houston, hearing was had on the question of the benefits to the property by the proposed improvement of the street upon which it fronted. The findings of the board charged with the duty of determining this question were that the benefits to the property exceeded the costs of improvement. No attack was made by appellees upon this finding by the city council. A certificate in favor of appellant was issued by the city council, and upon the failure of the Scanlan sisters, against whom the certificate was issued, to pay the installments of the assessment as they accrued, suit was brought by appellant against them on the certificate. This suit resulted in a judgment in favor of appellant for the amount due upon the certificate, with foreclosure of the lien given by the statutes and charter of the city of Houston. Appellees appealed from that judgment and the Austin Court of Civil Appeals, to which the appeal was transferred from this court by the Supreme Court, affirmed the judgment. Scanlan et al. v. Gulf Bitulithic Co.,27 S.W.2d 877.

As we have before shown, the Supreme Court granted a writ of error from the judgment of the Court of Civil Appeals, and in the opinion reversing that judgment expressly confined the reversal to the failure of the city council to separately assess the interests of the appellees in the property, and remanded the cause "without prejudice to any proceeding which any of the parties might see fit to institute in the premises." 44 S.W.2d 967, 972, 80 A.L.R. 852. The right to a reassessment for correction of mistakes of this kind is authorized by the charter of the city of Houston and the Revised Statutes of this state. Houston City Charter, art. II, § 2, art. IVa, §§ 9, 11, 13, and 16; Revised Civil Statutes of Texas, arts. 1097-1099 and art. 1175, subd, 16.

The decisions of our Supreme and appellate courts construing and upholding the validity of these statutes and charter provisions are numerous and uniform.

In Flewellin v. Proetzel, 80 Tex. 191, 15 S.W. 1043, 1045, our Supreme Court says:

"There existed no reason why an assessment could not be corrected; or when one wholly invalid had been made a new roll could not have been prepared. * * *

"Under such circumstances, should the contractor lose his debt? We think not. We think it was proper and competent for the city council to call for an amended roll, and, when correct, to approve it, and to call in the old certificates, and to issue new. We do not see that the appellee was in any manner injured by this action."

In Anderson v. Brandon, 121 Tex. 188, 47 S.W.2d 261, 262, the Supreme Court held that the provision of article 1175, subd. 16, giving home-rule cities the power to assess property for street improvements, "of necessity clothed such cities with such incidental powers as were essential and necessary to make effective the power thus granted. * * *

"It is a cardinal rule of statutory construction that the courts must presume that the Legislature, in the enactment of a law, always intends to confer all such incidental powers as are necessary to render effective the powers expressly granted. Brown v. Clark, 102 Tex. 323, 116 S.W. 360, 24 L.R.A.(N.S.) 670; 36 Cyc. p. 1113."

The opinion of the Supreme Court on the former appeal of this case, as before shown, expressly refused to hold that the original assessment was void and created no liability against the owners of the property that had received benefits from the improvement of the street in excess of the amount charged against the owners as cost of the improvement, but only reversed the judgment on the ground that the certificate was not properly issued, because it made each of the owners of an undivided interest in the property jointly liable for the whole cost of the improvement assessed against the property. This opinion is an example of the constant endeavor of our courts to decide cases on their merits.

The same clear distinction between an amendment of an incorrect certificate, and a reassessment of property on the ground that the original assessment which attempted to create the debt or liability is void, is made by Justice Greenwood in the case of City of Dallas v. Atkins, 110 Tex. 627, 223 S.W. 170.

The main grounds upon which appellees sought to defeat liability on the several certificates sued on, as shown by their pleas in abatement and their exceptions to plaintiff's petition, were that the proceedings in 1932 making the certificates separate, so as to protect each of the owners of an undivided interest in the property against joint liability for the entire assessment, were unenforceable because they were payable more than four years after the completion of the improvements; and that appellant's suit for recovery of the cost of the improvements is barred by limitation.

The majority of the court agree with appellant that the provision in section 9, art. IVa of the City Charter, "That the City Council shall have power to provide that the assessments shall be payable in installments, not, however, exceeding five, the last payable not exceeding four years from the completion by the City of the improvement," cannot be construed as prohibiting the city from making other than a four years' installment assessment. Section 4a of art. II of the Charter, which deals with assessments for cost of street improvements, provides: "The City Council in making any assessments may prescribe when the same shall be due and the said City Council is expressly authorized to provide that such assessments may be payable in installments."

Section 4a of this article also contains the following provision: "Wherever any error or mistake shall occur in any proceeding herein provided for, it shall be the duty of the City Council to correct the same, whenever it shall have determined that any assessment is, for any reason, invalid, unlawful or unenforceable, then it shall be the duty of the City Council to re-assess against such property and the owners thereof, such proportion of the cost of improvement as may be lawful and to fix a lien against said property and declare the personal liability of the owners thereof; said City Council shall have the power, and it shall be its duty to adopt such rules and regulations and make such order as shall, in compliance with the law, provide for the correcting of said mistakes and making a valid reassessment against said property. It shall, by resolution, order such reassessment and it shall order such of the old proceedings as appear to be improper, to be again gone over and corrected. Where the original special commissioners, or any of them, are not available, such fact shall be called to the attention of the Judge of the County Court of Harris County at Law, and he shall by appointment complete a Board of Special Commissioners who may make such reassessment, and who may avail themselves of all proceedings in the original assessment that may have been valid. The right to reassess shall not be barred or lost by the City until six (6) years from the date of the original assessment and the time of any suit attacking the validity of the assessment shall be excluded from such computation. The powers of the City Council with reference to such reassessment shall be sufficient to place such reassessment on the same basis as though the first assessment had been a valid assessment."

It seems clear to the majority of the court that under the charter and statutory provisions before set out that these contentions of appellees are without merit, and the trial court erred in sustaining them.

In addition to the authorities before cited, the following are in point and we think sustain the conclusions above expressed: McAlexander v. Smith Bros. (Tex.Civ.App.) 62 S.W.2d 530; Clark v. Pearson Co. (Tex.Sup.) 39 S.W.2d 27; Booth v. Uvalde Rock Asphalt Co. (Tex.Civ.App.)296 S.W. 345; Likes v. City of Rolla, 190 Mo. App. 140, 176 S.W. 520; Dollar Savings Bank v. Ridge, 183 Mo. 506, 82 S.W. 56; State ex rel. Minnesota Transfer R. Co. v. District Court of Ramsey County et al.,68 Minn. 242, 71 N.W. 27; Hughes v. City of Portland, 53 Or. 370,100 P. 942; Taxation by Assessment, by Page Jones, Sections 958 (p. 1619), 965 (p. 1628), 978 (p. 1647), 1052 (p. 1744), 1083 (p. 1788); 23 Texas Jurisprudence, 479; 28 Texas Jurisprudence, 243.

We have not deemed it necessary to discuss or state the numerous contentions presented by appellees in their counter propositions. None of them can, in our opinion, be sustained. If it could be held that the provisions of the ordinance making the amount due as fixed by the reassessment ordinance in 30 days after the passage of the ordinance was unauthorized, such error is not one of which the appellees can be heard to complain.

For the reasons indicated, we are of the opinion that the judgment of the trial court should be reversed and judgment here rendered in favor of appellants, and it has been so ordered.

Reversed and rendered.