CITY OF GLADSTONE v. THROOP, 71 F. 341

TAFT, Circuit Judge (after stating the facts). It is first necessary to determine which of the statutes of Michigan conferred and prescribed the powers of the village of Gladstone when the bonds here in question were issued. In 1857 the legislature of the state enacted a general law. providing for the organization and incorporation of villages by county boards of supervisors. This law was amended in 1859, in 1863, and in 1869, and as thus amended was incorporated in the Compiled Laws, and in Howell’s Annotated Statutes as

chapter 82. It was under this

chapter that the village of Gladstone was incorporated in 1887. The

chapter provided a mode by which, upon the petition of citizens living within the limits of the proposed village, any territory having not less than 300 inhab Slants might he organized and incorporated into a village, with the powers defined in the act, and with boundaries fixed in the petition and approved by the supervisors. Power is given in

section 2999 to the president and board of trustees to improve streets, and to provide for defraying the cost of the same by assessments upon the abutting property, “provided that no pavement of streets or highways shall be ordered or made until submitted to and approved by a majority of the legal voters of such village, expressed by ballot at a general village election or special election called for the purpose.” This power was conferred by the amendment of 1859. Ao authority is given by

chapter 82 to villages to borrow money or to issue bonds, and the bonds in suit were issued without lawful authority unless the provisions of

chapter 81 of the same statutes have application to villages incorporated under

chapter 82.

Chapter 81 is merely the compilation of

an act of the Michigan legislatura;, passed in 1875 and entitled “An act granting and defining the powers and duties of incorporated villages.” It provides, in its first section, “ibat all villages hereafter incorporated shall be subject to the provisions of this act.” As the village of Gladstone was incorporaied after 1875, the inference would seem clear that it was subject to the provisions of the act; but the argument is pressed that by its subsequent sections the act of 1875 can only apply to villages incorporated by special act. Thus

section 2 provides “that the boundaries of the village, the time and place for the first election therein, the time and manner of registering voters, and the manner of giving no rice of such election shall be provided for by the special act incorporating such village.” This language, it is insisted, excludes the application of, the

chapter to any villages but those incorporated by special act. But

section 5 of the act repeats the very general language of the first

section as follows: “All villages hereafter incorporated shall be bodies politic, and corporate under and by the corporate name assumed by or designated for them as hereinbefore provided and by such name may sue and be sued, contract and be contracted with, acquire and hold real and personal property for the purposes for which they were incorporated, have a common seal, and change its name at pleasure, and exercise all the powers in this act conferred.” We do not think that the words of

section 2 can be held to qualify the very sweeping language of the first and fifth sections. All that

section 2 was intended to declare was that the details mentioned therein were not to be fixed under this act, but under that act by which the particular village should he incorporated. Such details were fixed by the petition and approval of the board of supervisors in the case of villages incorporated under

chapter 82 or the act of 1857. It must be borne in mind that. Howell’s Annotated Statutes of Michigan, as well as the Compiled Laws of 1871, were mere official compilations or arrangements of laws which took their force from their original enactment. Stewart v. Riopelle, 48 Mich. 177, 12 N. W. 36. They are not revisions, in which all the parts are to be construed together as if passed together. The laws contained in them are to be treated exactly as if still in the books of Session Laws, and the later in date must prevail over that which is earlier, because it is the latest, and therefore the controlling, command of the legislature. . We must not be confused, then, by the fact that

chapter 82 and

chapter 81 are printed in the compilation as though both are in force; for if they contain inconsistent provisions concerning the same subject-matter, the earlier must be deemed pro tanto repealed. People v. Hobson, 48 Mich. 27, 11 N. W. 771. The confusing character of this legislation concerning villages finds some explanation in its history. The act of 1857, with its amendments, providing for incorporation by the supervisors, and defining the village powers, obviously proved to be inadequate, and in 1873 (Laws 1873, p. 368, Ho. 179)

an act was passed in which a somewhat more elaborate method of organizing villages by general laws was provided, and widely-extended powers were given to villages incorporated under the act, and ample opportunity was given to all villages theretofore organized to be reincorporated undér the new law, and to acquire the new powers therein conferred.

This act of 1873 was declared unconstitutional by the supreme court of Michigan, for the reason that its scheme for the incorporation of villages involved a legislative delegation to unofficial persons of the power to determine the boundaries and other important particulars of'the village organization. The act of 1875 seems to have been a reenactment, for the purpose of increasing the powers of all villages thereafter incorporated, under whatever law, of a large part of those chapters of the act of 1873 which described the powers of villages, without any attempt to provide a new mode of incorporation.

In the hasty adaptation of the sections of the act of 1873 to the purposes of the act of 1875, words are permitted to remain in the various sections of the latter act that really have no place there, because that to which they referred in the former act is omitted in the latter. Thus, in

section 5 of the act of 1875, already quoted, the corporate names of the villages are referred to as “assumed by or designated for them as hereinbefore provided.” How no previous provision for such an assumption or designation can be found in the apt of 1875, but a reference to the act of 1873 shows that

section 5 was taken bodily from the act of 1873, where can be found antecedent words to satisfy its meaning. But, however difficult to reconcile completely the words of certain sections of this act because of these peculiarities in its legislative growth, we have no doubt whatever that it was the intention of the Michigan legislature, both in passing the act of 1873, and in subsequently passing that of 1875, to enact a municipal code applicable to all villages subsequently incorporated, whether incorporated by special act or under the mode provided by the act of 1857.

For the government of villages thereafter incorporated the act of 1875 must supersede that of 1857 in every respect where the two cover the same ground. The act of 1875, unlike that of 1857 and that of 1873, did not attempt to deal with incorporating villages by general law. Therefore the provisions of the act of 1857 as to incorporation remained unaffected by that of 1875, but in other respects the act of 1857 in relation to villages organized after 1875 must be regarded as superseded.

The act of 1857 in all its parts must still remain on the statute book to govern villages incorporated before 1875, to which the act of 1875 had no application, and thus the one or two amendments to the act of 1857 which have been passed since 1875 have relation only to that class of villages. It is well settled in Michigan,'as elsewhere, that where a subsequent statute covers the whole ground occupied by an earlier statute, it repeals by implication the former statute, .even where there is no repugnance. Shannon v. People, 5 Mich. 71; Breitung v. Lindauer. 87 Mich. 217; Dewey v.

Manufacturing Co., 42 Mich. 399, 4 N. W. 179; Feige v. Railroad Co., 62 Mich. 1, 28 N. W. 685; U. S. v. Claflin, 97 U. S. 546; Murdock v. Memphis, 20 Wall. 599; U. S. v. Tyncu. 11 Wall. 88. Under the act of 1875, c. 7, §§ 17-19, and

chapter 8, g 3 (How. Ann. St. §§ 2863-2865, 2904), the board of trustees or council of the village is given power to pave streets and assess tin* cost thereof on abutting property without a vote of the people. These provisions, though not repugnant to

section 2999 of

chapter 82, requiring a vote of the people to authorize paving streets, take its place, and remove the necessity for any such popular vote in all villages organized afier the act of 1875 and subject to its provisions. We have only to inquire, therefore, whether these bonds were issued in accordance with the requirements of the act of 1875, or

chapter 81 of Howell’s Annotated Statutes.

Section 2863 provides that the village council shall have authority io grade, pave, curb, and otherwise improve streets.

Section 2864 provides that the expense of such improvement may be defrayed by foot-front assessment, or in part from such assessment and in. part from the general or special street fund of the village, and that the lots assessed by front feet shall constitute an assessment district.

Section 2864 provides that the village, out of the general highway fund, shall pay for si reel intersections and the frontage of village property as a private owner.

Section 2904 provides that when 1he council shall determine to make an improvement, to be paid in whole or in part by assessment, it shall so declare by resolution, slating the improvement, the proportions to be paid, respectively, by special assessment and by general taxation, and (be lands or district to be assessed.

Section 2913 provides that if any assessment should prove insufficient to pay for the improvement the council might impose additional assessment within the limitaiions prescribed for assessments.

Section 2926 provides that the council may raise, by special assessment upon lands in special assessment districts, for the purpose of defraying the expense of paving and improving streets, charged upon the lands in proportion to frontage, such sums as they shall deem necessary to defray the costs of the improvements, but not to exceed in any one year 5 per cent, of the assessed value of the property in the district chargeable with the expense.

Section 2953 provides that the council by a two-thirds vote may borrow, in anticipation of ¿he collection of special assessments actually made for any local improvement, such sum, not exceeding the assessment, as may be necessary for the prosecution or completion of the improvement; and the assessment, when collected, shall be applied in payment of the loan.

Section 2957 provides that, for any loans lawfully made, the bonds of the village may be issued, and that each bond shall show upon its face the class of indebtedness to which it belongs, and from what fund it is payable. It is evident from this review of the statutes that the village council had authority, without a vote of the people, to order an improvement of Delta avenue, to assess its cost upon the abutting property holders, to borrow money in anticipation of the collection of valid' assessments, and to issue bonds to evidence such a loan.

There are certain steps enjoined in the levying of these assessments, and it is insisted by counsel for the plaintiff in error that they were not taken, that the assessment was accordingly invalid, and that the bonds were therefore void.

Thus it is pointed out that under the statutes a special improvement, to be paid for by assessment, can only be ordered by a two-thirds vote of all the trustees elect, and that the ayes and -nays must be spread on the journal; that no preliminary resolution was passed fixing the improvement and assessment district; that the assessment was never confirmed by a two-thirds vote; that the issuance of the bonds was had at a special meeting, called without proper statutory notice, when some trustees were absent.

These objections to the validity of the assessments might be good if they had been made by those property owners who were assessed, but it is not shown that the assessments, or any of them, were defeated- on these grounds. So far as appears, the village collected the assessments levied, and it cannot now be heard to plead the illegality of the assessments which it has collected as a reason for not paying the bonds which it issued in advance of the collection of such assessments. Dill. Mun. Corp. § 459; Argenti v. San Francisco, 16 Cal. 255.

The evidence shows that the first $4,000 paid to the village by the purchaser of the bonds was used to pay the contractor; that then $17,000 of assessments was collected and paid the contractor; .and that the remaining $6,000, paid by the purchaser of the bonds, was not used to pay the contractor, but remained in the treasury until taken to pay the intersection bonds, which should have been paid by general levy.

It was plainly the duty of the council to have used $4,000 of the assessments to pay the first $4,000 of bonds, and to have retained the proceeds of the remaining $6,000 of bonds to take them up when they fell due. Clearly, the wrongful diversion of the assessments properly applicable to the bonds, and of the unexpended $6,000 also applicable to them, cannot enable the city to escape a liability lawfully assumed.

The evident purpose of the law was that the credit of the whole city might be pledged to pay bonds, the proceeds of which should be used to anticipate assessments levied on a particular district, and that the city could thereafter relieve itself by using the assessment returns to pay the bonds. If the city has failed to do this, when it had the power, the bondholders cannot he thereby prejudiced in the recovery of that which they advanced, in proper reliance upon the city’s liability.

The $6,000 of bonds which the city did not need assessments to pay, it used for another purpose to pay a lawful debt, which it ought to have paid by general taxation. Clearly, ex equo et bono, it owes this money to those from whom it came, and it cannot avoid its payment by any plea of want of power or regularity in obtaining it. Parkersburg v. Brown, 106 U. S. 487, 503, 1 Sup. Ct. 442, and cases there cited. It is said the bonds were illegal because in excess of 5 per cent, of the assessed value of the property in the district. There is no evidence what the assessed value of the district was.

It is in evidence that the total assessed value of the entire village was $379,-000, and 5 per cent, of that is $19,000. This leaves it entirely possible that that 5 per cent, of the abutting property on Delta avenue which constituted the assessment district much exceeded $10,000, and until it is otherwise shown to the contrary, it will be presumed, in support of the validity of the bonds, that this limitation was not exceeded. In any event, objection cannot be made by the village, after it lias collected more than $10,000 in assessments, that the bonds were issued in excess of legal authority.

The limitation applied to the assessments, not to the bonds, and was for the benefit of the abutters. If the abutters made no objection and paid the assessments, it is not for the city, when sued for bonds issued in lieu of assessments, to avoid their payment by a plea that was only for the abutters to urge, and which they waived. A very technical argument is made to show that the village had no power to borrow money in advance of collecting the assessment unless the improvement was uncompleted.

It is said that because here the work was done, 1he borrowing of money to pay the contractor at such a time could not be said to be for either the prosecution of the work or its completion, as required by statute. It seems to us that it was borrowed to comply with the contract of the village for the completion of the work, and so was within the spirit and meaning of the statute.

The resolution under which the bonds were issued directed their issue to pay the contractor, and did not expressly recite that they should be issued in anticipation of assessments, hut as there was no power to issue them except for this purpose, and as this was plainly what they were issued for, we cannot see why the village, and its successor, the city, should not be liable upon them as lawfully-issued bonds, even if the resolution giving them circulation was not drawn with legal accuracy.

A similar answer must he given to the defense that the bonds do not state upon their face the class of bonds to which they belong. Such a. defect might be quite material in considering the liability of: a city to a bona fide purchaser for value who relied on the apparent validity of the bond under the law to escape equitable defenses of the obligor, but here there is no defense to the debt which the bond evidences, and a technical compliance with the law in the form of the instrument becomes immaterial.

It is further objected that no recovery should be had for this debt, because the first purchaser of the bonds was the city treasurer, who was promised a commission of 5 per cent, for the sale, in the face of a statute which made it unlawful for any city or village officer to enter into a contract with the city or village, in which contract he was to receive from such city or village a valuable consideration. The commission promised in this case was never paid.

Conceding the contract to pay the commission to have been unlawful and void under the statute, the sale of the bonds was nevertheless clearly separable from that for the commission, and it would be the grossest injustice to hold the city freed from the obligation of the bonds in the hands of an assignee who had paid value for them without notice, because their delivery and sale had been accompanied by an unlawful collateral stipulation with the first purchaser, as to a commission, which was never fulfilled. . On the whole case, we think the judgment of the court below was right, and it is affirmed.