Newberry v. City of Detroit

150 N.W. 838, 184 Mich. 188, 1915 Mich. LEXIS 866

• Court: Michigan Supreme Court
• Decided: January 29, 1915
• Docket: Docket No. 4
• Status: Published

Opinion

Kuhn, J.

(after stating the facts). The claim is made that the payments of the assessments by Mrs. Newberry was a voluntary payment, and for that reason no recovery by her can be had. The charter of the city of Detroit (1904 edition), chap. 11, §37, provides in part, as to assessment rolls for paving:

“And when the same [assessment roll] shall be corrected to the satisfaction of said council it shall by resolution confirm the same. After such confirmation, such assessment shall constitute a lien until paid, upon said lots or parcels of real estate, and shall be collected in such manner as may be authorized by law.”

The assessment roll then goes into the hands of the receiver of taxes, who causes notice of the assessment to be printed in two of the newspapers published in said city once in each week for three successive weeks. The assessment is divided into four, parts, part 1 becoming due and payable in 30 days from the first publication of said notice, and parts 2, 3, and 4 becoming due and payable in one, two, and three years, respectively, from the date of the first publication.

The charter further provides that any person may pay the entire amount of the assessment within 30 days from the date of said publication without interest; but, if not paid within that time, the part remaining unpaid shall be payable with interest at the rate of 7 per cent., from the date of confirmation of said assessment until the same shall be paid, and if the amount of part 1 of the assessment is not paid within 30 days, a penalty of 5 per cent, in addition to the interest shall be added thereto and a like penalty to the other parts if not paid when due.

The entire amount of the paving taxes was paid by Mrs. Newberry. The' record does not disclose the exact date of the payment, but it is to be assumed that they were paid before there was any liability for interest or penalty. It is clear from the charter provision that at the time the taxes were paid they had become a lien on the property. The question of whether or not a payment of taxes after having become a lien is a voluntary payment seems to have been definitely determined by this court in the case of Thompson v. City of Detroit, 114 Mich. 502 (72 N. W. 320). The tax or assessment in that case was for the opening and widening of a street, and was paid after confirmation by the council, and the tax had become a lien by virtue of the charter provision. The court in that case said (114 Mich. 506, 72 N. W. 321):

“While the tax was not paid under threat of levy upon personal property, yet we think that, it having been made for the purpose of relieving the real estate of the lien which had attached by virtue of the provisions of the charter, it was equivalent to a payment under compulsion. Prima facie, it was a valid lien upon the land.”

It is true that in that case a protest was made at the time of the payment of' the taxes, and the receiver of taxes thus had notice that the taxes were regarded as illegal. But when the payment of taxes is involuntary and made under legal duress, there is no rule requiring specific protest. Cox v. Welcher, 68 Mich. 263 (36 N. W. 69, 13 Am. St. Rep. 339); Pere Marquette R. Co. v. City of Ludington, 133 Mich. 397 (95 N. W. 417).

While good reasons may be advanced for questioning the wisdom of the rule thus established, a change with reference thereto, in our opinion, should now be sought in the legislature rather than in the courts. Therefore,- in harmony with the ruling in the Thompson Case we conclude that a tax paid after a lien attaches to the property, because of it, must be held to have been paid under legal duress, and is not a voluntary payment.

The charter of the city of Detroit makes express provision for the original paving of its streets, and requires the cost and expense of such an improvement (with certain unimportant deductions) to be assessed ratably according to frontage on the lots, parts of lots, and parcels of real estate fronting on the improvement, and further provides for the repairing and repaving of its streets out of a repairing and repaving fund, created and raised for such purposes by general taxation. In our opinion, the validity of that part of the tax complained of depends upon whether it can be said that the “maintenance charge” and “estimated profits” are legally any part of the cost and expenses of these improvements. The item of $.20 per square yard is an arbitrary figure, it seems, made from practical experience and from what contractors generally charge to keep pavements in repair, to cover the maintenance of the paving for 10 years. Mr. Proctor, who is the asphalt expert for the city of Detroit, testified with reference to this item, and also the overhead charge, as follows:

“Mr. Perry: And the item of ‘Estimated Profits’ goes in under the same subheading (asphalt patching), does it not?

“Mr. Barlow: Yes.

“Mr. Perry: And that item it is stipulated is used to maintain the asphalt plant?

“The Witness: Not at all. I don’t agree with you on that. I do not think it goes to maintain the asphalt plant. We have a special appropriation, which was acted upon today by the common council committee. For instance, we put in an estimate what it would cost to maintain the asphalt plant. We do not call upon that fund for that purpose at all. We have special appropriations for various repairs and parts we may need for the asphalt plant proper. For instance, we ask for $6,000 for repairs and replacements. We ask for appropriations for a storage shed; we ask for $4,000 for apparatus for handling materials. Everything is specified as to what we want, and we get the money for it. We don’t use that item to maintain the plant. That goes into the general road fund, and I suppose anybody can get the benefit. I suppose the taxpayers will get it eventually. They are part of the department of public works, I think. It is a city department. In that way I have to dispute the fact that we repair our plant from this fund, the statement at least, not the fact.

“Mr. Perry: Well, I am willing to accept your amendment, but your counsel does not agree with you.

“The Court: Does it make any difference?

“Mr. Perry: I do not see what difference it makes. It is bad enough; that is all.

“Mr. Barlow: Mr. Proctor, what does this 20 per cent, for maintenance fund include? What kind of repairs ?

“A. General repairs. Any damage caused to the pavement through poor workmanship and defective materials.

“Q. That is these particular streets? Paving of these particular streets in question?

“A. Any of the streets where I have charged for maintenance, any new paving or repaving, we charge 20 cents a yard, and my understanding of it is that we maintain those streets against disintegration of materials, for instance, for a period of 10 years. And I think from a business standpoint it is a proper charge, regardless of what others say.

“Q. What is the charge of 7 cents for overhead?

“A. Overhead includes my salary, depreciation of plant, 10 per cent, per annum, my superintendent’s salary, our foreman, our repairs, renewals, and sundry expense items. I cannot go into everything.

“Mr. Perry: If I understand you, Mr. Proctor, the city puts in an item of 20 cents per square yard which its experience shows it will cover the cost of maintaining that pavement as it was through that period of 10 years.

“A. Not entirely so, simply estimated cost, charge for maintenance. That figure is a figure which we have set as a proper figure for the maintenance of the paving for 10 years. The figure is made from practical experience, from what I thought was right, and based on what is charged by contractors generally to keep the pavement in repair for 10 years.

“Q. It might conceivably happen, might it not, that that charge of maintenance that you have made might all be gone, and yet the city not have done a penny’s worth of repairs on that particular pavement?

“A. It is possible, yes. That would be to the credit of the asphalt department in the class of pavement they laid.

“Q. It would be very much to the detriment of Mrs. Newberry, would it not?

“A. No, sir; it would not. Mrs. Newberry could not get that pavement laid at the price under contract of $1.30 per square yard, if I may say so. I will tell you cases at the present time where contracts had been made with the Newberry estate for the continuation of those streets at $1.10 per square yard for 21/2 inches of surface. I put in 3% inches of surface for $1.30 per square yard. That would cost Mrs. Newberry at the lowest possible figure $1.41 per square yard for a 5-year guaranty. I give a 10-year guaranty for $1.30 per square yard. These are facts I can verify. I have the figures right here for you. I know where the Newberry estate has contracted for about 60,000 yards up in that vicinity within a week.

“The Court: Mr. Proctor, is this notion of mine a correct notion; that it does not make any difference how circumspect or careful you are when you are laying a piece of asphalt pavement, that trouble is apt to develop as a result of the work being done?

“A. Yes, sir; in a great number of cases, temperature, mesh composition of the sand. We are dealing with a material that comes in bulk, sand.

“Q. So that while you take the utmost care in the mixture and in the material that you put in, nevertheless to insure a permanent job you have to add to the actual cost a certain percentage or a certain amount for maintenance?

“A. I think so, your honor. Now, the city took a chance, on giving a figure, of putting in a figure of $1.30 per square yard.”

We are of the opinion that the maintenance charge can properly be considered a part of the cost of the initial construction of the pavement, as it in effect amounts to a guaranty for 10 years of the workmanship and the materials used. The requirement of the city of a bond from the contractor guaranteeing the city for a period of 10 years against imperfect work or defective material in the construction of pavements is, in our opinion, a proper and legal requirement. The validity of requiring such a guaranty against imperfect original construction or faulty materials has generally been upheld by the courts, and Judge Dillon, in his treatise on Municipal Corporations, summarizes the law on this subject as follows:

“A common, if not the general, method of improving and maintaining streets imposes upon abutting proprietors the cost of paving, whilst the cost of ordinary repairs is imposed upon the city at large. Contractors for street paving, in their endeavor to induce municipal governments to adopt their pavements, make representations as to its character and durability, and it is proper that some remedy should be reserved to the municipality by which it can enforce their contracts and representations in this regard. Hence it has been a common custom to require from a contractor for paving a street a guarantee that he will maintain it in repair for a term of years. When such a stipulation is exacted, does it throw the cost of the repairs upon the abutting proprietors, who are to be assessed for the cost of the paving, contrary to the general scheme of the city’s government, or is it a mere provision for the protection of the city against imperfect work? In pavements, particularly in asphalt, the durability depends very largely upon the character of the work, the condition of the foundation, and the mixture of the material used; and it is not difficult for contractors to deceive the inspectors in regard thereto. A guarantee on the part of the company as to the durability of the pavement affords a simple and complete remedy which fully protects the public, and when the time for which the guarantee continues is no longer than the ordinary durability of the pavement when laid with the best workmanship and material, it does not impose any unreasonable burden on the contractor. One view declares that such guarantee does not contravene the provisions of a municipal charter requiring repairs to be made in the expense of the city at large. If the repairs are limited to the making good imperfect work, or the defective material used, no additional burden is imposed upon the abutting property owners, by reason of a requirement of a guarantee for a term of years. But some courts appear to adopt a contrary view, and hold that such a guarantee of necessity tends to increase the cost of the improvement and to impose upon an abutting proprietor the expense of repairs contrary to the charter provisions, and that a contract containing such a stipulation is invalid. It is to be observed of these conflicting decisions that the difference in result appears to arise rather from a difference of opinion as to the effect of the guarantee than from any disagreement as to the legal principle. The decisions which hold that such a guarantee is a proper provision for the protection of the municipality and does not impose the expense of repairs upon the abutting proprietors seem to recognize three features of the guarantee before the courts as controlling, viz.: That the contractor was not required to guarantee his work against any other defects than those for which he might properly be held responsible; that responsibility for defects arising from causes for which he was not responsible, as from acts of the city or its licensees in opening the street, was not imposed upon the contractor; and that the guaranty did not extend beyond such term of years as the pavement might naturally be expected to continue in good order. In some of the cases which ■have adopted the contrary view, the courts have relied upon the fact that the guarantee in question was in effect an agreement to keep the whole street in repair for a term of years, irrespective of the causes which might necessitate the repairs, or at least that it obligated the contractor to repair defects in the streets for which he was not responsible.” 5th Ed., pages 1260-1262.

As the testimony shows that from the practical experience of contractors engaged in this kind of work it is found necessary to expend the amount of this maintenance charge in keeping the pavement in repair for the stated period of 10 years, we see no reason why complaint should be made of the charge. In the instant case the charge for maintenance does not go further than would a requirement to guarantee against original faulty construction of defective material, and we, therefore, conclude that this charge was proper.

The same reasons, however, cannot be urged in support of the estimated profit charge. Mr. Proctor, in his testimony herein quoted, says that this item went into the general road fund, and was used just as other maintenance funds were used, and not especially to maintain the asphalt plant. So that it is clear that it could not be said to be a part of the cost and expenses of these improvements. It was therefore illegally assessed against the property, and the trial court properly directed a verdict as to this item, amounting to $1,650.70 and interest thereon. Therefore, unless plaintiff elects within 20 days to remit the sum of $4,610.57 and interest thereon from the judgment had herein in the court below, the judgment will be reversed and a new trial granted. If plaintiff does so remit, it will be affirmed.

Brooke, C. J., and McAlvay, Stone, Ostrander, Bird, Moore, and Steere, JJ., concurred.