Opinion
15666
July 25, 1944.
Before G. DEWEY OXNER, Judge, Spartanburg County, October, 1943. Affirmed.
Action by Martha E. Mason (C.M. and W.P. Mason, as her Administrators, substituted) suing in behalf of herself and all other taxpayers of the City of Spartanburg who may come in and contribute to the costs of this action, and for and in behalf of the City of Spartanburg, against I.T. Williams and the Fidelity Deposit Company of Maryland to recover damages allegedly resulting to the City and taxpayers by reason of the alleged failure of the City Clerk and Treasurer to send out required Notices and to issue Executions to the Tax Collector and proceed to collect or see that certain Paving Assessments were collected until after the abutting property liens therefor had expired. From a Judgment for the Defendants the Plaintiffs appeal.
The Circuit Order of Judge Oxner, adopted by the Court, follows:
Claiming to be a taxpayer of the City of Spartanburg, and to sue for herself, the city, and all its other taxpayers, Mrs. Martha E. Mason, on February 14, 1938, brought this action against I.T. Williams, city treasurer, and Fidelity Deposit Company of Maryland, surety on his bond, for damages in the amount of the penalty of the bond for its alleged breach by the treasurer's failure to collect certain paving assessments before the abutting property liens therefor expired. While the action was pending, the original plaintiff died, and her administrators were substituted.
The complaint (carrying as exhibits all legislative Acts and city ordinances claimed to govern the making and collection of paving assessments) predicated the treasurer's alleged duty to collect abutting property assessments upon a resolution of the city council of March 21, 1932, entitled "A Resolution Relating to the Collection of Abutting Property Assessment Tax," which, after reciting prevalent delinquency, resolved "that the city treasurer be and he is hereby instructed to notify each delinquent in writing the amount due and unpaid, and that if such account * * * is not paid within fifteen days from the date of this notice he shall proceed at once to collect same as provided by law."
The city treasurer denied that it was his duty to collect paving assessments, and plead affirmatively that the delay in levying executions for them resulted from the reliance, in good faith, by him and the city council upon the advice of the city attorney that paving assessment liens continued for ten years after ratification.
The surety company asserted this same defense, and, further, that the bond sued on was issued only after the city had represented that the treasurer was not responsible for failure to collect such taxes and assessments.
Plaintiff moved to strike out these defenses, and prevailed in the Circuit Court. On appeal, the Supreme Court reversed, restoring the stricken defenses, and holding specifically:
(1) That under Code Section 7604, the city council of Spartanburg, possessing all the legislative, executive and judicial powers of the city, including the power to appoint subordinate officers and assign their duties, is the city itself, and the treasurer their subordinate officer under their supervision, whose duties they might assign, modify, withdraw, or divide with another.
(2) That the resolution of March 21, 1932, is on its face ambiguous, and under his denial that it imposed on him the duty to collect paving assessments, the city treasurer should be allowed to show its meaning by parol testimony; and if the council did not thereby intend to authorize him to issue executions until further instructions from them he should be allowed to so show, commenting that "especially is this a reasonable view in the light of prevailing legislation and conditions in 1932, when moratorium statutes were being enacted throughout the nation."
(3) That the city council and its subordinate officers or employees were entitled to rely upon the opinion and advice of the city attorney as to the duration of paving assessment liens.
Other defenses were upheld, but since I have reached conclusions determinative of the case upon the foregoing, it is unnecessary to further discuss or refer to the others.
Jury trial was waived and the cause referred. It is now before me on defendants' exceptions to the report of the referee, who recommended judgment against them on substantially the same grounds and theory that led the Circuit Court to strike the defenses restored by the Supreme Court.
The exceptions are unnecessarily numerous and argumentative, many of them repeating in variant phraseology assignments of error covered by others. Since those charging error in not finding and holding that the delay in issuing paving assessment executions resulted from reliance on the erroneous advice of the city attorney as to the duration of the lien, and the intention of the city council to indulge the property owners to the limit of the life of the lien as defined by the city attorney's incorrect opinion, must be upheld. I shall not discuss in any detail, or expressly pass upon other exceptions which may also have merit.
A careful reading of the referee's report discloses that he followed plaintiff's counsel into the error of failing to accept and follow the law of the case as clearly defined by the Supreme Court. Our only inquiry must be whether any of the defenses held sufficient by that Court are sustained by the evidence.
However, it may not be amiss to point out that, notwithstanding plaintiff's original contention in pleading and argument that it was the treasurer's duty to collect paving assessments, her counsel in argument before me conceded that there is nothing in the record to show any such duty, acquiescing in the referee's holding to that effect, and contending now only that it was the treasurer's duty to issue executions within thirty days after delinquency.
While the overwhelming weight of the evidence shows that, during Williams' tenure as treasurer, it was never his duty to issue paving executions until expressly so instructed by the city council and that standing instructions had been given to issue no execution until just before the expiration of nine years and thirty days after ratification, it may not be amiss to further point out that the period for which recovery is sought is from July, 1930, to October, 1933; that the assessments involved were ratified in 1927 and 1928; that they were approximately two years delinquent when he came into office; and had there been a duty on the treasurer, prior to the 1930 depression, to issue executions thirty days after delinquency, it was a duty resting not on him, but on his predecessor.
Moreover, since issuing an execution neither creates nor preserves any lien, and since it is conceded, as well as conclusively proved, that it was not the city treasurer's duty to levy, and since the testimony of practically all the members of the city council was to the effect that no levy was to be made, of what avail the issuance of an execution when no levy was to follow? How can we assume damages resulting from failure to issue an execution which was not to be levied? How can we reason that the mere issuance of an execution, with no following levy, would induce some property owners to pay assessments which would otherwise not be paid? To so hold would be to permit damages highly speculative to be recovered on grounds wholly conjectural.
Ignoring the holding of the Supreme Court that parol testimony was admissible to explain the intention of the city council in the resolution of March 21, 1932, the referee undertook to interpret that resolution without the aid of the very clear and positive testimony showing that it was not intended to authorize the treasurer to issue executions without further instructions, and held that the members of the city council "had no right then, or now, to ask the courts to hold that when these resolutions were adopted, they were merely trying to pull a bluff."
The testimony, almost if not quite undisputed, by its whole trend and greater weight, corroborated by attendant circumstances, and the universal tendency to delay collection of debts by forced sales of property during the appalling depression then prevailing, compels my conclusion that it was the undoubted and unanimous intention of the city council that no paving assessment executions should be levied, or sales made thereunder; and that the resolution of March 21, 1932, was not intended to authorize the treasurer to issue executions.
Mr. Ben Hill Brown was mayor of Spartanburg from 1925 to 1937, inclusive, and his testimony is clear, strong and convincing, and not contradicted in any way. He was head of the financial department. In 1931, he employed Mr. Rothrock, not as special tax collector, but expressly to do what he could toward collecting paving assessments. In addition to calling on the debtors, it was Rothrock's job to get up information on delinquent assessments and apply to the treasurer for an execution when the liens were about to expire, assuming the lien to endure for nine years and thirty days from ratification of assessment. Both Rothrock and the former mayor so testified; and, further, that he was working directly under the mayor, who went over the delinquent assessments with him almost daily. There is no testimony that he applied for any execution that Williams didn't issue. On the contrary, it is clear that both understood with certainty that no executions were to be issued until the nine-year-and-thirty-day period were about to expire. The former mayor testified that both were under instructions not to issue executions until then; they were to make strenuous efforts to collect but to go no further until about the time of the expiration of the statute; that they (the city council) were trying to impress upon the people that they wanted the money; that they thought they had ten years and were going to wait ten years if they had to.
Rothrock and Williams are equally positive and clear that the instructions were not to levy, and the mayor testified that the instructions were intended to include withholding issue of executions, because of the added costs incident to that. That there was no intention to execute or levy is strongly suggested by the employment of an outside man to call on the debtors, without carrying an execution along.
The council members other than the former mayor who testified for plaintiff were equally positive that no one was to be sold out.
I find and hold that it is clearly established that the city treasurer and the city council relied on the opinion of the city attorney that the paving assessment lien lasted for nine years and thirty days; and that, during this period of depression, the city council did not intend that executions should be issued, and gave express instructions that they should not be, until this limitation was about to expire. Obviously, Williams being a subordinate officer "subject to the council," cannot, under these circumstances, be held liable for not doing what they expressly directed him not to do. It follows that neither can his surety be held liable.
I think it may be said in addition that the course adopted by the city council was in line with the most enlightened public policy and official prudence. Every consideration suggested indulgence. The loss from uncollected paving assessments was directly due to the error of the city attorney in defining the duration of the assessment lien, and not to neglect on the part of the city council or city treasurer.
Over defendants' objection (preserved by proper exceptions) the referee allowed the complaint amended by alleging a resolution of the city council of March 5, 1928, substantially similar to that of March 21, 1932, and, tentatively ruling it and evidence relating to it inadmissible, seems later to have allowed both to materially influence his views. The propriety of the amendment and the competency and relevancy of this resolution and testimony concerning it are highly questionable; but, waiving that, it cannot help plaintiff's cause. Because, if admitted to show custom, the undisputed testimony shows that no execution was issued under that resolution; consequently Williams, who was then assistant treasurer, was justified by the "custom" invoked in deeming the resolution of March 21, 1932, not to require issue of executions. And if admitted to show continuity of duty, it showed the duty to rest not on Williams, but on his predecessor.
Receding from the original position that it was the city treasurer's duty to collect paving assessments and ceding to predicate liability on failure to issue executions (which the undisputed testimony shows would not have been levied), plaintiff's counsel finally insisted in argument before me that, in any event, it was his duty to send out notices under the resolution or March 21, 1932, and that he failed to do this. Waiving the difficulty presented by the speculative character of any damages that might result from failure to mail notices, and that they must ultimately rest on pure conjecture, I find that plaintiff has not carried the burden of proof necessary to establish the failure to mail the notices. Williams testifies positively that he mailed them, and the circumstances relied to combat this are not inconsistent with his having done so.
As I have already said, being unable to resist the conclusion from the whole evidence that the city council was anxious in indulge the paving assessment debtors to the limit of the abutting property lien therefor, and with the treasurer, justifiably and in good faith relied and acted upon the opinion of the city attorney that this lien lasted for nine years and thirty days from assessment ratification; and that the city council did not intend or mean by its resolution of March 21, 1932, to authorize the treasurer to issue executions until further instructions, and in no event until the assessment liens were about to become nine years and thirty days old, and this being a valid and complete bar to the plaintiff's action, I am content to rest my decision of the case on these fully established defenses, and deem it unnecessary to discuss or pass upon the exceptions charging error to the referee in failing to sustain other defenses, though urged with much force and earnestness.
The record contains an order of Judge Sease, disqualifying himself in this case, and it came before me on the customary affidavit vesting jurisdiction in me as Judge of an adjoining circuit.
It is therefore ordered and adjudged that the defendants have made good the defenses hereinabove sustained, and that the complaint be dismissed with costs, and judgment entered for the defendants.
Messrs. DePass DePass, of Spartanburg, S.C. Counsel for Appellants, cite: As to City Clerk's Duty to Obey State Law Specifically Adopted by City Counsel: Code of S.C. 1942, Sec. 7470; 194 S.C. 290, at 300, 9 S.E.2d 537; 54 S.C. 554, at 574; 185 S.C. 398, 194 S.E., 124. As to City Clerk's Failure to Obey City Ordinance: 195 S.C. at p. 47 As to Premium on Clerk's Official Bond Being Increased Because of Added Liability: 89 N.C. 44; 142 A., 525, 58 A.L.R., 1213. As to Clerk's Liability for His Negligence in Not Having City Attorney to Construe Correct Statute: 199 S.C. 96, 18 S.E.2d 612; 121 A., 639, 142 Ind., 616. As to Citizen Being Estopped to Collect Bond Because of Official's Negligence: 169 S.C. 373, 168 S.E., 852; 60 S.C. 465, 38 S.E., 629; 68 S.C. 26, 46 S.E., 539. As to Distinction Between "Tax" and "Paving Assessment": 171 S.C. 294; 104 S.C. 167, 88 S.E., 372; 9 C.J., 148.
Messrs. Daniel Russell, of Spartanburg, S.C. Counsel for Respondents, cite: As to Review of Trial Court's Findings of Fact in Law Case: 175 S.C. 421; 174 S.C. 24, 176 S.E., 880, Syllabus; 5 S.C. 189, Syllabus. As to "Assessments" Being "Taxes": 103 S.C. at p. 189.
Counsel for Appellants, in Reply, cite: As to Review of Facts by Supreme Court on Appeal in Chancery Case: 3 S.C. 531; 64 S.C. 27, 41 S.E., 835; 96 S.C. 290, 80 S.E., 470; 122 S.C. 461, 113 S.E., 791. As to Liability of City Treasurer and His Surety: 109 A.L.R., 489.
July 25, 1944.
This is the second time this case has been before this Court, and the present appeal is by the plaintiff from the order for final judgment of the Court of Common Pleas for Spartanburg County in favor of the defendants, dated October 16, 1943, handed down by Honorable G. Dewey Oxner, then Judge of the Thirteenth Circuit.
This is a taxpayer's action for the benefit of the City of Spartanburg and was instituted on February 14, 1938, against T. Williams, as city clerk and treasurer, and Fidelity Deposit Company of Maryland, as surety on his bond, to recover damages in the full principal amount thereof, to wit, $20,000.00, alleged to have resulted to the city and its taxpayers by reason of the alleged failure of the city clerk and treasurer "to send out required notices and to issue executions to the tax collector and to proceed to collect or see that certain paving assessments were collected until after the abutting property liens therefor had expired."
The amended complaint alleges, among other things, that the defendant Williams was the duly elected city clerk and treasurer of the City of Spartanburg, and served as such for a period commencing July 7, 1930, and ending October 20, 1933, and that the defendant Fidelity Deposit Company of Maryland was the surety upon the official bond of Mr. Williams, dated May 13, 1931, and continuing in full force and effect until October 20, 1933; the condition thereof being in the usual terms, to wit, that the officer should (quoting) "well and truly perform the duties of said officer, as now or hereafter required by law, during the whole period he may continue in said office."
It is further alleged that on March 21, 1932, the city council of the City of Spartanburg adopted a resolution or ordinance requiring the defendant Williams, as City clerk and treasurer, "to notify the owners of property of delinquent paving assessments and within fifteen days thereafter to proceed at once to collect same as provided by law"; but that the city clerk and treasurer failed to carry out the provisions of this resolution or ordinance or the requirements of the statutes of the State; and that as a result of such nonfeasance and misfeasance the lien of the city for certain paving assessments, duly assessed, had expired, causing a loss to the city in the total amount thereof, to wit, $28,854.66.
All of these paving assessments are shown to have been severally ratified on various dates during 1927 or 1928, and hence the liens thereof expired five years and thirty days after ratification, that is to say, some time during the year 1932 or the year 1933.
The defendants answered the amended complaint separately, admitting certain allegations thereof, including the execution of the official bond, but denying that the defendant Williams was in anywise responsible for any failure to collect the paving assessments in question, or that there is any liability on the part of either of the defendants.
There is also an affirmative defense set up in each of the answers to the effect that any delay in the collection of assessments resulted from reliance in good faith upon the advice of the city attorney (the legal adviser of the city under the statutory law of the State) that such paving assessment liens endured for a period of ten years from the time the assessments were ratified; and that bona fide reliance upon this advice of counsel on a strictly legal matter is a complete bar to the action.
The answer of the surety company set up as a further affirmative defense that the City of Spartanburg through its mayor, acting under the authority of its council, in order to induce this defendant to execute the bond, duly represented that its principal, the city clerk and treasurer, "was not responsible for failure to collect delinquent taxes, paving assessments, license fees, etc," and that but for this material representation the bond would not have been executed.
It should also be stated that the answers raise an issue as to the proper construction of the somewhat ambiguous resolution of the city council dated March 21, 1932, to which reference was above made.
Upon the service of these answers the plaintiff moved to strike out the affirmative defenses, and the motion was granted by the Circuit Court, whereupon the defendants appealed to this Court, as will be seen by reference to the case of Mason v. Williams et al., 194 S.C. 290, 9 S.E.2d 537. The prevailing opinion was delivered by Mr. Justice Baker (now Chief Justice), and the order of the lower Court striking out the affirmative defenses was reversed, and these defenses were thus reinstated. And it may be observed that this opinion is an adjudication in relation to the legal principles determinative of the present appeal.
The opinion above referred to was filed on May 28, 1940, and thereafter, to wit, on June 28, 1940, by consent of counsel for the respective parties, the cause was referred to a special referee to take the testimony and report his findings of fact and conclusions of law. While the case was pending before the referee a motion was made by the plaintiff to further amend the complaint so as to allege in substance that the city council of Spartanburg passed a resolution on March 5, 1928, relating to the collection of certain past-due paving assessments, and that the city clerk and treasurer likewise failed and neglected to carry out the provisions thereof; and over the protest of the defendants this amendment was allowed by the referee.
The referee proceeded in due course to take the testimony adduced by the respective parties, amounting to a considerable volume, and thereafter rendered his report dated August 10, 1943, wherein he recommended that the plaintiff have judgment against the defendants for the sum of $20-000.00, with interest from the date of the commencement of the action, and costs. Upon exceptions duly taken to this report the cause came on to be heard before Judge Oxner, who handed down his order, dated October 16, 1943, overruling ruling the referee and adjudging that the complaint should be dismissed with costs, and judgment entered for the defendants; and the cause is now before us upon the exceptions having to this order in behalf of the plaintiff; defendants having also asked that the judgment be sustained upon an additional ground to which reference will hereinafter be made.
It should be stated here that the original plaintiff, Miss Martha E. Mason, having died intestate, her two administrators were by order of Court substituted in her stead; but in conformity with the heading the singular number as to plaintiff or appellant is used herein.
Counsel for the appellant properly reduced their numerous exceptions to five questions in their brief. The first three of these questions may be further shortened and combined into one so as to read: Did the city clerk fail to obey the State statutes, or the city ordinance of March 5, 1928, or the city ordinance of March 21, 1932, in connection with the failure to collect certain paving assessments whose liens thereafter expired?
In so far as this composite question or the three questions upon which it is based are concerned, the order of Judge Oxner (indicating an answer in the negative) is entirely satisfactory to us, for the reason that it contains an accurate statement of the pertinent facts, and the conclusion of the Court is soundly based upon the evidence in the light of the legal principles laid down by this Court in this very case. The order of the Circuit Court is therefore adopted as a component part of our opinion herein, to be reported herewith, and to which little, if anything, really needs to be added.
However, certain matters were mentioned in the oral argument at the bar of this Court and in the printed briefs to which some allusion may perhaps appropriately be made. We think, for example, that counsel for the appellant through inadvertence erroneously state that the instant cause was instituted on the equity side of the Court, or that it was so treated by the parties, for the action is manifestly one at law for the recovery of money only, and while it was referred by consent, its character was in no wise thereby changed. It follows that the findings of fact by the trial Judge are binding on this Court, as has been repeatedly so held. Gregory v. Cohen Sons, 50 S.C. 502, 511, 27 S.E., 920; Furst Thomas v. Whitmire, 135 S.C. 33, 133 S.E., 222. But even if the equity rule prevailed, we are in agreement with Judge Oxner that the acts as found by him are sustained by the decided weight or preponderance of the evidence.
This action had its origin in the policy of the Spartanburg City Council (binding upon the city clerk and treasurer) whereby great leniency was shown to delinquent paving assessment debtors in view of the then prevailing and truly appalling financial depression — a policy sound and reasonable, if the life of the liens had been as long as they were advised by their official legal adviser; the question not having then been judicially determined.
The views of the city attorney, a highly competent lawyer, as to the duration of the paving assessment liens in question were concurred in by other able counsel; and the complexity of the matter, due to the varying statutes and ordinances, will readily appear by reference to the subsequently decided cases of Cleveland v. City of Spartanburg, 185 S.C. 373, 194 S.E., 128, and Blake v. City of Spartanburg, 185 S.C. 398, 194 S.E., 124, 125, 114 A.L.R., 395, declaring these assessment liens to have expired at the end of five years and thirty days from the time such assessments were ratified by the city council, although the city contended that the liens should be held to run for the period of nine years and thirty days from ratification and hence were still in force. The Cleveland case was referred by this Court in its original jurisdiction to the late lamented Honorable W.C. Cothran, as Special Referee, and his excellent report was confirmed and adopted as the opinion of this Court, in which he makes the following statement which is quite pertinent to the matter now before us [ 185 S.C. 373, 194 S.E., 133]:
"Out of consideration for the property owners, the city authorities deferred commencing any legal steps just as long as they thought they could consistently do. They were advised to show all leniency possible to the property owners as the depression was at its worst and the city authorities had no desire to oppress any of the property owners. However, the city did not wish to lose its lien, and did begin its efforts to enforce the same within the statutory period as construed by several lawyers of ability who were consulted in regard thereto."
The distinguished referee also expressed genuine regret that the city should suffer for having shown consideration for its citizens resulting in a valuable improvement to property "free of all expense, the expenses being borne by the city at large" and some other property owners who had paid their assessments. But we may observe that viewing the matter solely from an economic standpoint, the loss is not very appreciable, because the improvements were doubtless valuable to the city as a whole, upon which the entire burden now falls.
The fourth question involved in this appeal is stated by counsel for the appellant as follows: "Can the erroneous construction of the wrong act by the city attorney obtained negligently by the city clerk excuse the bonding company from liability on its bond?"
This question is based upon the fact that the original opinion as to the duration of the lien was given by the city attorney in a letter dated February 8, 1928, in which he referred to Section 4508 (Code 1922) as the pertinent section, and that some time in the following year, to wit, on January 28, 1929, he wrote another letter, relating, however, solely to the question of whether a fifteen per cent. penalty could be collected on a paving assessment. The theory of appellant seemingly is that the latter letter tends at least indirectly to show that Section 4508 referred to in the former letter is not the statute applicable to the City of Spartanburg, and that the city clerk and treasurer should have detected this, and that indeed he should have gone further and sought the advice of the city attorney as to the construction of the particular act, which this Court subsequently held was applicable. It seems to us that a mere statement of this contention is sufficient to show its unsoundness. If the city clerk and treasurer could be held to such a standard of care as to require him to have a discriminating knowledge and understanding of all the statutes relating to paving assessments, this would, we believe, extend the responsibility of an administrative officer far beyond reasonable limitations. Hence we do not think that any negligence could be charged to the city clerk and treasurer in this respect, or that any liability on his part or that of the bonding company could thus arise.
The fifth and last question involved herein as stated by counsel for the appellant is as follows: "Can the bonding company double the premium in bonding that an official `shall well and truly perform his duties as now or hereafter required by law' and then deny liability after the clerk fails to obey the city's resolution of March 5, 1928, and March 21, 1932, thereby allowing paving assessments to expire?"
This question may be considered in connection also with the respondents' additional ground for sustaining the judgment which was based upon a statement in writing made to the surety company by the mayor to the effect that the city clerk and treasurer was "not responsible for uncollected taxes." This statement was in effect construed in the affirmative defense based thereon as relating to the collection of "delinquent taxes, paving assessments, license fees, etc."; and as so alleged it was held by this Court upon the former appeal that such a representation to the bonding company would be a good defense.
It is true that techinically the word "taxes" does not mean "paving assessments," yet the statement of the mayor to the bonding company must have been understood by both parties as including paving assessments, for otherwise express exception would doubtless have been made. Indeed, it was said (and truly) in the case of Jackson v. Breeland, 103 S.C. 184, 88 S.E., 128, 130, that "in popular parlance, and even in legislative enactments, assessments are frequently called taxes." The sustaining ground seems tenable, although not necessary to the decision of this cause.
Recurring then to the fifth question, we think it erroneously assumes a failure on the part of the clerk to obey the resolutions mentioned, and we do not consider that doubling the premium of the bond, if this were actually done, would be sufficient to warrant liability. Indeed, we do not find anything in the record with reference to the amount of the premium on the bond involved in this action, except that in consideration of the sum of $200.00 the bond was continued in force for the period beginning October 20, 1932, and ending October 20, 1933. It is true that it is shown by the record that the bonding company had previously issued a bond for Mr. Williams, to wit, on May 28, 1927, the premium on which was $100.00, but this bond related to him as assistant clerk and treasurer, the position he held before he became clerk and treasurer, and is therefore wholly irrelevant. Besides, there is nothing before the Court even to suggest that an increase in the bond premium, if in fact there was such an increase, was due to any circumstance tending to enhance the risk.
We conclude that all the exceptions should be overruled and the judgment of the Circuit Court affirmed.
Affirmed.
MR. CHIEF JUSTICE BAKER, MESSRS. ASSOCIATE JUSTICES FISHBURNE and STUKES, and CIRCUIT JUDGE G DUNCAN BELLINGER, ACTING ASSOCIATE JUSTICE, concur.