Opinion
Nos. 41855 and 41856.
December 11, 1950. Rehearing Denied, January 8, 1951.
Consolidated appeals of two actions in equity to cancel special sewer tax bills issued against plaintiffs' lands. University City had the charter power to create the sewer district and issue the tax bills. Plaintiffs had proper notice. Inclusion of plaintiffs' lands in the sewer district was not fraud, and plaintiffs are estopped to attack such inclusion after the sewer has been constructed and the tax bills issued. The petitions were properly dismissed.
1. MUNICIPAL CORPORATIONS: Taxation: Power of University City to Issue Sewer District Tax Bills. University City has adopted a charter pursuant to constitutional authority under which it had the right to establish a sewer district and issue tax bills covering special assessments on benefited property.
2. MUNICIPAL CORPORATIONS: Taxation: Fraud: Inclusion of Plaintiffs' Lands in Sewer District: Allegations of Fraud Not Sustained. Plaintiffs have failed to sustain their allegations that their lands were fraudulently included in the sewer district.
3. MUNICIPAL CORPORATIONS: Taxation: Notice: Constitutional Law: Inclusion of Plaintiffs' Lands in Sewer District: Notice to Plaintiffs Sufficient. There was an adequate constructive notice of a public hearing before the city council which afforded due process.
4. MUNICIPAL CORPORATIONS: Taxation: Equity: Estoppel: Inclusion of Plaintiffs' Lands in Sewer District: Failure of Plaintiffs to Object: Estoppel After Improvements Completed. Plaintiffs failed to appear at the public hearing before the city council with objections against the inclusion of their lands in the sewer district and are estopped in equity to attack the tax bills issued after the work has been completed. The petitions were properly dismissed.
Appeal from Circuit Court of St. Louis County; Hon. Raymond E. LaDriere, Judge.
AFFIRMED.
Herbert W. Ziercher and Edwin Tzinberg for appellant.
(1) The court erred in sustaining separate motions of respondents to dismiss appellant's petition for the reason that amended petition did state claims upon which relief could be granted in that the City of University City had no power to form the sewer district and issue special tax bills. Morrow v. Kansas City, 186 Mo. 675; Art. X, Sec. 1, 1945 Missouri Constitution; Meier v. St. Louis, 180 Mo. 391; Kansas City v. J.I. Case Threshing Co., 87 S.W.2d 195; Kansas City v. Frogge, 176 S.W.2d 498; Sec. 19, Art. VI, 1945 Missouri Constitution; Farrar v. St. Louis, 80 Mo. 379; Barber Asphalt Paving Co. v. French, 158 Mo. 535. (2) The court erred in failing to rule that the tax proceedings could be collaterally attacked since the city lacked authority to issue the special tax bills in question. Heman v. Ring, 85 Mo. App. 231; Exter v. Kramer, 291 S.W. 469. (3) The court erred in failing to rule that the matters of whether appellant was taxed in a confiscatory manner and disproportionately in relation to the benefits it derived and whether it suffered inequities constituted questions of fact. 44 C.J. 661; Schneider Granite Co. v. Gast Realty Inv. Co., 240 U.S. 55, 36 S.Ct. 254, 60 L.Ed. 523; Hauck v. Little River Drain. Dist., 239 U.S. 254, 36 S.Ct. 56; Sec. 10, Art. I, 1945 Missouri Constitution.
John A. Nolan and Arnold J. Willman for respondent Investment Service, Inc.
(1) The Charter of the City of University City, adopted by vote of its people in obedience to the express grant by the provisions of the Missouri Constitution 1945, has, with respect to all purely municipal or local matters, including special assessments for local sewer improvements, all the force and effect of an act of the legislature. City of St. Louis v. Fischer, 167 Mo. 654; Prior v. Construction Co., 170 Mo. 439; Fruin-Bambrick v. St. Louis Shovel Co., 211 Mo. 524; Meier v. St. Louis, 180 Mo. 391. (2) The establishment of sewer districts, defining their boundaries and the construction of sewers therein and the assessment of the costs thereof, and the issuance of special tax bills, is purely and solely a local municipal function, in a constitutionally chartered city and was not required to be done in accordance with any general statute relating to fourth class cities. In re East Bottoms D. L. Dist., 305 Mo. 377; Baks v. Comstock Realty Co., 306 Mo. l.c. 332; Brunn v. Kansas City, 216 Mo. 108; U.S. v. Certain Lands, 69 F. 565. (3) The action of the common council in laying out and defining the boundaries of the sewer district, under the Charter of University City, was a legislative act and as such not subject to collateral attack. Prior v. Const. Co., 170 Mo. l.c. 448; McGhee v. Walsh, 249 Mo. l.c. 283. (4) It was not necessary that sewers be actually constructed throughout the entire sewer district, in order to render valid the special taxes assessed for the sewers actually constructed. McGhee v. Walsh, 249 Mo. l.c. 284. (5) When the municipal authorities follow the prescribed formalities required by the Charter in laying out the district, constructing the sewers, and assessing the cost, the owner cannot contend in court that his property was not in fact benefited as to the amount assessed. Prior v. Construction Co., 170 Mo. 439; Meier v. St. Louis, 180 Mo. 391; Houck v. Drainage Dist., 248 Mo. 373. (6) Special assessments are referable to the taxing power but are clearly distinguishable, because levied on theory of benefits received, and because not subject to constitutional provisions relating to uniformity or limitation of amount of assessment. Morey Eng. Co. v. Ice Rink Co., 242 Mo. 241; Barber Asphalt Co. v. Joseph, 183 Mo. 451; Fruin-Bambrick v. St. Louis Shovel Co., 211 Mo. 524.
David Baron for respondent William A. Riley Paving Construction Company, Inc.
(1) University City is organized under the provisions of the 1945 Constitution of the State of Missouri, Article VI, Section 19, and Sections 7241.101 and 7241.102, R.S.A. Missouri, the first of which sections provides that any city having a population of more than ten thousand may frame and adopt a charter for its own government by complying with Sections 19 and 20, Article VI, of the Constitution of Missouri. (2) Section 6215a, R.S.A. Missouri, provides that all cities adopting a charter for their own government under the provisions of Section 19, Article VI, of the 1945 Constitution or which frame and adopt a charter for their own government under the provisions of Section 16 or 20 of Article IX of the 1875 Constitution, are declared to be constitutional charter cities and all laws now existing or which may hereafter be enacted relating or making reference to cities under constitutional charter or constitutional charter cities shall be deemed to and shall apply and be valid in relation only to cities of this state defined and declared in this section to be cities under constitutional charter. (3) Section 6215b provides that all cities and towns of Missouri operating under charters granted directly and specially by the General Assembly prior to the adoption of the 1875 Constitution are defined and declared to be cities and towns under special charter and all laws now existing or which may hereafter be enacted relating or making reference to cities or towns under special charter or special charter cities or towns shall be deemed to and shall apply and be valid in relation only to cities and towns of this State defined and declared by this section to be cities and towns under special charter. (4) The permission to frame a charter implies the power to adopt a complete and harmonious system of local municipal government including the right to establish sewer districts, provide for the construction of sewers therein and the payment therefor by special assessment against the property embraced in the sewer district. A charter is the organic law of a city in this state whether it emanates from the General Assembly or is framed and adopted by the people of the municipality by authority of the Constitution. Kansas City v. Marsh Oil Co., 140 Mo. 458; Tremayne v. St. Louis, 6 S.W.2d 935; Haeussler Inv. Co. v. Bates, 306 Mo. 392, 267 S.W. 632, affirmed 271 U.S. 647, 46 S.Ct. 487, 70 L.Ed. 1131. (5) A charter adopted pursuant to a constitutional provision has all the force and effect of a charter which emanates from the General Assembly. City of St. Louis v. Fischer, 167 Mo. 654. (6) The provisions of Article X, Section 1 of the Constitution of Missouri of 1945 in regard to taxation which is similar to Article X, Section 1 of the 1875 Missouri Constitution are applicable only to taxation in the ordinary acceptation of the term and are not applicable to special assessments for local improvements such as assessments for sewers. Meier v. St. Louis, 180 Mo. 391. (7) Plaintiff having remained inactive and allowed the city to let a contract for the construction of the sewers, and the contractor having expended its money in constructing the sewers in accordance with the contract, plaintiff cannot escape the legal burden which has been placed upon its land as a result of the improvement. St. Louis Malleable Casting Co. v. Prendergast Const. Co., 288 Mo. 197, 231 S.W. 989, affirmed 260 U.S. 469; Granite Bituminous Paving Co. v. Fleming, 251 Mo. 210; White v. Davidson, 181 U.S. 371, 45 L.Ed. 900. (8) Plaintiff is presumed to have notice of the passage of the ordinances and the provisions thereof and of the charter. Parsons v. District of Columbia, 170 U.S. 45. (9) An attempt to enjoin the collection of a special tax bill is a collateral attack on the tax proceedings. In a collateral attack on the validity of special tax bills, no question of oppression, fraud or arbitrary action of the municipal assembly can be raised. McGhee v. Walsh, 249 Mo. 266; Heman v. Schulte, 166 Mo. 409. (10) The fact that plaintiff's lots may be situated on ground higher than the adjacent land has no material significance. The question of whether the plaintiff's lots would or would not be benefited by the construction of the sewer is a legislative and not a judicial question and the judgment of the Municipal Assembly is conclusive. Prior v. Construction Co., 170 Mo. 439. (11) Lands may be taxed for local improvements although they receive no direct benefits. The assessment against any tract embraced in a sewer district is not limited to payment of its increased value. Roberts v. Richland Irrigation District, 289 U.S. 71, 77 L.Ed. 1039. (12) Even if these suits were direct attacks that were being made prior to the time the contract for the construction of the sewers was let, the facts alleged in plaintiff's petition do not constitute fraud within the meaning of the rules hereinbefore enunciated. The inclusion of certain tracts of land which may not be benefited from the taxing district does not constitute fraud. A reading of the cases indicates that what would be necessary would be the allegation and proof that there was bribery involved in the fixing of the district or that the sewer when constructed could be of no possible benefit to any considerable portion of the land in the district. St. Louis Malleable Construction Co. v. Prendergast Const. Co., 288 Mo. 197, 231 S.W. 989, affirmed 260 U.S. 469; Prior v. Construction Co., 170 Mo. 439; Roberts v. Richland Irrigation Dist., 289 U.S. 71, 77 L.Ed. 1039. (13) Plaintiff's arguments that the city's right to provide for public improvements and the payment therefor is limited to the slum clearance provision of Section 21 of Article VI of the 1945 Constitution is fallacious.
Two actions in equity to cancel special tax bills in aggregate amount $22,023.40, to enjoin the enforcement thereof, and for a decree that the tax bills do not constitute liens on the described lands. The trial court sustained defendants' separate motions to dismiss on the stated ground the petitions failed to state claims upon which relief could be granted, and, plaintiffs having declined to further plead, the court ordered dismissals "with prejudice." Plaintiffs have appealed. The two causes have been consolidated herein for review.
Plaintiffs, owners of the described properties, in their petitions described the parties, plaintiffs and defendants, and pleaded the various ordinances establishing a sewer district (No. 89) within the City of University City and providing for the construction of a dual system of district sewers in the district; and for the advertisement and letting of the contract for the construction of the sewers, the acceptance of the improvement upon the completion of the construction, and the issuance of special tax bills in payment for the work.
Plaintiffs stated that the City of University City, of population in excess of 10,000, is a "constitutional charter city," the charter having been adopted pursuant to the authority provided in Section 19, Article VI of the Constitution of Missouri of 1945, Mo. R.S.A. Const. Art. VI, § 19; and that "no enabling legislation has been passed by the Legislature of Missouri implementing the 1945 Constitution of Missouri permitting constitutional charter cities to establish sewer districts and to issue special tax bills for sewer purposes and that the formation of Sewer District No. 89 and the aforesaid special tax bills are null and void."
Plaintiffs further alleged that the properties of plaintiffs are bounded on the west by the west corporate line of University City, are west of Woodson Road in the City, and are of higher elevation than the remaining property lying to the eastward in the district; (plaintiff, Giers Improvement Corporation, alleged that the southern two thirds of its property lies contiguous to, and in the same watershed as the formerly established Sewer District No. 74; that the sewers in Sewer District No. 74 are ample for disposal of all drainage water or other sewage emanating from such two-thirds portion of such plaintiff's property; and that none of the property of that plaintiff is improved); that the property of plaintiffs "was fraudulently included" in District 89 so as to provide additional revenue for the construction of sewers east of Woodson Road, and no sewer of any character was constructed west of said road; the plaintiffs further (and severally) alleged "said special tax is illegal, void and fraudulent for the reasons hereinabove stated, and that in addition thereto the same is confiscatory in that the 'purported improvement' for which said tax bills were issued does not increase the value of the property of plaintiff, and that same is equal to or greater in the aggregate than the value of plaintiff's property within said Sewer District. That if said tax bills are adjudicated to be valid, then the property of plaintiff will be confiscated without due process of law and without the payment of consideration therefor to the plaintiff"; and that plaintiffs and each of them "verily believes and alleges the fact to be that their aforesaid property was illegally and fraudulently included within the confines of the aforesaid Sewer District by the City of University City, Missouri, with the intent and for the purpose of providing additional and necessary revenue and with the full knowledge that plaintiff's property would thereby be appropriated for such purpose without consideration to plaintiff."
In the pleaded Ordinance No. 3007 (accepting the completed improvement in Sewer District No. 89, levying a special assessment in payment, and authorizing the issuance of special tax bills therefor) it is recited that a public hearing was held April 7, 1948 (and continued to April 20th), and that a notice of the hearing had been theretofore published on March 19th, all pursuant to the directions of the original resolution of March 12th.
[358] We believe plaintiffs-appellants are mistaken in their pleadings, and in their contentions herein upon appeal that the City of University City had no power to establish the sewer district, construct a sewer, and issue tax bills in payment for the improvement. If we are right in this regard, the further contention of plaintiffs-appellants (that the entire proceeding is void and subject to collateral attack because the City had not been so empowered) must fail.
As alleged in plaintiffs' petitions the City of University City is a charter city, having framed and adopted a charter by vote of the people of the City, February 4, 1947, under the authority granted by Section 19 of Article VI of the Constitution of 1945, supra. The Section 19 had as its source Section 16, Article IX of the Constitution of Missouri of 1875, Mo. R.S.A. Const. Art. IX, § 16, and differs therefrom in the prescribed requisite minimum number of inhabitants of cities which may frame and adopt charters — "more than one hundred thousand inhabitants," Section 16, Article IX, Constitution of 1875, supra; "more than 10,000 inhabitants," Section 19, Article VI, Constitution of 1945, supra.
As was true of the city which had framed and adopted a charter under the provisions of Section 16, Article IX, Constitution of 1875, supra, so it must be true of the City of University City which has framed and adopted a charter pursuant to Section 19, Article VI of the Constitution of 1945, supra. The charter adopted presents a complete system of local self-government. Plaintiffs-appellants are correct in urging that the power to tax is a governmental function inherent in the State (more precisely stated, "inherent in the sovereign people of the State"), exercised by the legislature subject to constitutional limitation. But there are matters governmental in character, including taxation, over which a city may exercise authority delegated to it. In the case of a city organized under general law the delegation is by statute. A city, the people of which have framed and adopted a charter under direct constitutional authority, may exercise such powers of local self-government, including taxation, as the people of the city have delegated to it by charter, subject to constitutional limitation. This is because the sovereign people of the State by their Constitution have set over, transferred or granted to the people of the city a part of the State legislative power. The part so granted is the legislative power to frame and adopt a charter for local self-government. Hence it is said charter provisions ("consistent with and subject to the Constitution and laws of the state") have the force and effect of enactments of the legislature. McGhee v. Walsh, 249 Mo. 266, 155 S.W. 445. See also Kansas City v. Frogge, 352 Mo. 233, 176 S.W.2d 498; Troost Ave. Cemetery Co. v. Kansas City, 348 Mo. 561, 154 S.W.2d 90; Kansas City v. J.I. Case Threshing Machine Co., 337 Mo. 913, 87 S.W.2d 195; Mullins v. Kansas City, 268 Mo. 444, 188 S.W. 193. In framing and adopting a charter, what did the people of the City of University City say the City could do?
Upon examination of Article XI of the Charter of the City of University City, of which charter we take judicial notice (Fleshner v. Kansas City, 348 Mo. 978, 156 S.W.2d 706), we observe that the City has been empowered to make public improvements, including sewers. It is provided that payment for the improvements may be made, in whole or in part, by special assessments on benefited property. Proceedings for public improvements are commenced by resolution of the council declaring the necessity of such improvements, the nature thereof and the method of payment therefor. When the improvements are to be paid for in special tax bills, the resolution must state the proposed method of making assessments to pay therefor. District sewers may be constructed in established sewer districts. If the cost of construction is to be paid for by assessments or tax bills, the entire amount of the assessment is to be levied "ratably by area" upon all the lots or parcels of ground in the district. Upon the adoption of the resolution, the council is required to fix a time for a public hearing at which all persons interested may be heard. After the hearing the council may [359] determine that it is or is not in the public interest that such improvement or any part thereof be made.
(It is not contended by plaintiffs-appellants that the charter power granted in Article XI is inconsistent with the Constitution or laws of the State, nor that the council did not follow the procedure, prescribed in the Article, thoughout the proceedings for the improvement in Sewer District No. 89.)
It was alleged that the value of plaintiffs' properties is not increased; that the tax assessed exceeds the value of their properties; and that the properties were "fraudulently" included within Sewer District No. 89 by the City with the intent and for the purpose of providing additional and necessary revenue for the construction of sewers east of Woodson Road and with knowledge that plaintiffs' properties would be appropriated without consideration to plaintiffs.
The inclusion in good faith of plaintiffs' properties for the purpose of raising additional and necessary revenue for the construction of the sewers was not fraud on the part of the city officers, even though such sewers were east of Woodson Road. If they honestly believed that plaintiffs' properties would be benefited by the improvement, the city officials did not act fraudulently. (Plaintiffs did not allege that the defendant contractor was a party to or had knowledge of the alleged fraud. Compare Jennings Heights Land Imp. Co. v. St. Louis, 257 Mo. 291, 165 S.W. 741.) However, in the "points relied on" and in the argument in their briefs, plaintiffs-appellants do not urge the allegation of actual fraud as a basis for their assignment of error of the trial court in dismissing the petitions. We infer plaintiffs-appellants do not rely upon and have abandoned the allegation of fraud as upholding the sufficiency of their petitions. Examine Supreme Court Rule 1.08(a), and compare Johnson v. Fogertey Building Co., Mo. App., 194 S.W.2d 924. Herein, plaintiffs-appellants urge the trial court "erred in failing to rule that the matters of whether appellant was taxed in a confiscatory manner and disproportionately in relation to the benefits it derived and whether it suffered inequities constituted questions of fact." Herein, the contentions of plaintiffs-appellants amount to no more than assertions that the inclusion of their properties in Sewer District No. 89 was inequitable, unreasonable and oppressive. Concerning these matters no timely question was raised by plaintiffs. McGhee v. Walsh, supra; Heman v. Schulte, 166 Mo. 409, 66 S.W. 163.
Now, the public necessity of the improvement, the inclusion of properties in the district, and the benefits to the included properties were legislative questions of fact to be determined by the council; and the questions having been determined, the determination was conclusive, absent fraud or oppression, and not subject to review by the courts. Badger Lumber Co. v. Mullins, 310 Mo. 602, 275 S.W. 957; McGhee v. Walsh, supra; Prior v. Buchler Cooney Const. Co., 170 Mo. 439, 71 S.W. 205. Inasmuch as there was notice, although but constructive, to plaintiffs of the public hearing and an opportunity to be heard before the council (the tribunal having the duty of ascertaining the facts leading up to the assessment procedure) there was also present due process of law required by constitutional provision. Wiget v. City of St. Louis, 337 Mo. 799, 85 S.W.2d 1038; McGhee v. Walsh, supra; St. Louis Malleable Casting Co. v. George C. Prendergast Const. Co., 288 Mo. 197, 231 S.W. 989; Meier v. St. Louis, 180 Mo. 391, 79 S.W. 955; Prior v. Buehler Cooney Const. Co., supra.
It seems plaintiffs did not appear at the public hearing and seek to be heard, although the purpose of the hearing was to entertain and determine objections with respect to the improvement and to afford the property owners of the district an opportunity to show, if they could, that their properties were improperly included in the district or would not be benefited; or that their properties were about to be made to [360] bear an unjust burden of the special tax being assessed; any of which objections could then have been eliminated before the expense of constructing the improvement had been incurred by a contractor in doing the work. But, on April 19-20, 1949, after the conclusion of the whole of the proceedings and after the work of construction had been completed and tax bills issued to the contractor who must have done the work reposing faith in the unchallenged record of the regular proceedings, plaintiffs instituted the instant actions seeking to invoke the powers of a court of equity in their behalf. Again see Jennings Heights Land Imp. Co. v. St. Louis, supra. Surely, it seems to us, they should have availed themselves of the opportunity to appear at the hearing before the city council held pursuant to the provisions of the City's charter. And, not having done so, they should be held by a court of equity to be estopped to now assert the objections that the improvement was of no benefit to their properties, or that their properties were improperly included in the district, or that the special tax was disproportionately and inequitably assessed, which bases of objections, if valid, plaintiffs might have had remedied by appearances and the introduction of evidence in support thereof at the public hearing before the city council. St. Louis Malleable Casting Co. v. George C. Prendergast Const. Co., supra; Jennings Heights Land Imp. Co. v. St. Louis, supra; McGhee v. Walsh, supra; Empire Securities Co. v. Matthews, 179 Cal. 239, 176 P. 160; and other cases cited in the Annotation, 9 A.L.R. 634, at pages 706-712. See also Wiget v. City of St. Louis, supra; and cases cited in the Annotation, 100 A.L.R. 1292, at pages 1297-1298.
The orders of dismissal should be affirmed.
It is so ordered. Lozier and Aschemeyer, CC., concur.
The foregoing opinion by VAN OSDOL, C., is adopted as the opinion of the court. All the judges concur.