Kuehl v. City of Edmonds

On Rehearing.

Ellis, J.

In 1909, the city of Edmonds, a city of the third class, provided by ordinance for the improvement of Dayton street. An assessment roll was made assessing the property benefited for the full cost of the improvement, amounting to $8,317.33. At the suit of Peabody and others, the superior court enjoined the collection of the assessment for any greater amount than $4,375.75. The city appealed, and in Peabody v. Edmonds, 68 Wash. 610, 123 Pac. 1018, *197we found that the estimated cost of the improvement was $6,025.75. Following the case of Chehalis v. Cory, 54 Wash. 190, 102 Pac. 1027, 104 Pac. 768, we held that an assessment only to the extent of that estimate was valid. Shortly thereafter an assessment to that amount was levied. Sometime later, a reassessment, or supplemental assessment, was made under the act of 1911, which in the meantime had been enacted. This included the balance of the principal of the cost of the improvement, amounting to $2,292.33, and interest on all the warrants issued, amounting to $2,161.34, making a total of $4,453.67, which is the amount of the new roll. From this supplemental assessment, certain interested property owners, appealed to the superior court. That coui’t held that the council had no power to make a reassessment or supplemental assessment, and further, that our former decision in Peabody v. Edmonds, supra, was res judicata of the amount which could be lawfully assessed against the property. There, was no showing that the council acted fraudulently or was in any way guilty of bad faith in the premises. There was no showing that the property in the district was not benefited in the full amount of the original and supplemental assessments, nor that the property of the appellants was assessed in excess of its proportion of the actual benefits conferred by the improvement. The city appealed. That decision was affirmed by Department One of this court in Kuehl v. Edmonds, 85 Wash. 307, 148 Pac. 19. A rehearing having been granted, the case was reheard by the court En Banc.

On mature reconsideration, we are forced to the conclusion that the Department decision is erroneous, in that throughout it apparently proceeds upon the assumption that, by the act of 1911, the legislature for the first time authorized a reassessment for the actual cost of the improvement up to the full amount of the special benefits to the property assessed, notwithstanding the original assessment had been held void in whole or in part for lack'of a sufficient preliminary esti*198mate; whereas § 6 of the law of 1893, Laws 1893, p. 229 (2 Rem. & Bal. Code, § 7899), which was in full force when the improvement here in question was made and when the judgment setting aside the first assessment was entered, contained substantially the same provisions as those of §§42 and 43 of the act of 1911. As a matter of fact, the body of the law relating to reassessments was not materially changed, but was reenacted by the act of 1911. Compare the statute of 1893, as amended in 1909, Laws 1909, p. 128 (2 Rem. & Bal. Code, §§ 7893, 7894, 7895 and 7899) with §§ 42 and 43 of the statute of 1911, Laws 1911, pp. 468, 469 (3 Rem. & Bal. Code, §§ 7892-42 and 7892-43). The provisions relating to reassessments, being carried forward and reenacted in substance in the statute of 1911, are not to be construed as a new enactment, but as a continuing law from the first enactment in 1893. This is not only true as matter of construction independent of statutory declaration to that effect (Pierce County ex rel. Maloney v. Spike, 19 Wash. 652, 54 Pac. 44), but it is so declared in § 70 of the statute of 1911, in express terms as follows:

“Any acts or parts of acts herein repealed, which are reenacted in form or in substance in this act shall not be construed as new enactments but as continuations and amendments of such acts or parts of acts.
“All rights of action under existing laws which this act in any way supersedes or repeals, if the same at the time of talcing effect of this act shall not have been commenced, shall proceed under the provisions of this act. All actions and proceedings, which may be pending in court under existing laws which this act in any way supersedes or repeals, shall proceed without being in any manner affected by the passage of this act. All proceedings commenced by any city' or town before the taking effect of this act, relating to the making of any local improvement, shall proceed without being in any manner affected by the passage of this act, except as provided in section 7892-24.” 3 Rem. & Bal. Code, § 7892-70.

When this section is read in its entirety, the statement in the Department opinion that “the limit of the power under *199the act of 1911 is to make all necessary assessments, reassessments or supplemental assessments within the limit of the sum fixed by the law governing the improvement at its inception,” loses all point. This is manifest from the simple fact that the law, at the time of the inception of the improvement, fixed no limit to the power to reassess other than the actual cost of the improvement apportioned according to special benefits.

It may be objected that the statute of 1893 did not provide for a supplemental assessment. True, it did not eo nomine, but it did provide for a reassessment whenever an original assessment had been declared void “in whole or in part,” which comes to the same thing. Laws 1893, p. 234, § 3 (2 Rem. & Bal. Code, § 7893).

The Department opinion argues that:

“The basic principle underlying the Cory case and our former decision in this case is that, where the legislature has granted a general power or a power with limitation, a city, in the exercise of that power, may so conduct itself as to work an estoppel, and the relative rights of the property owner and the city will be fixed and determined by reference to the law as it existed at the time.”

This is true, but the estoppel only extends to the original assessment, since the law as it existed at that time, while it required a preliminary estimate of the cost and a hearing thereon pursuant to notice as a prerequisite to a valid original assessment (2 Rem. & Bal. Code, § 7705), also declared in § 7899, the section relating to reassessments, that:

“The fact that the contract has been let or that such improvement shall have been made and completed in whole or in part shall not prevent such assessment from being made, nor shall the omission, failure or neglect of any officer or officers to comply with the provisions of the charter or laws governing such city or town, as to petition, notice, resolution to improve, estimate, survey, diagram, manner of letting contract or execution of work, or any other matter whatsoever connected with the improvement and the first assessment thereof, *200operate to invalidate or in any way effect [affect] the making of the new assessment or reassessment as provided for by this chapter, charging the property benefited with the expense thereof: Provided, that such new assessment shall be for an amount which shall not exceed the actual cost and value of the improvement, together with any interest that shall have lawfully accrued thereon, and that such amount be equitably apportioned upon the property benefited thereby, according to the provisions of the charter or laws of such city or town. It being the true intent and meaning .of this chapter to make the cost and expense of all local improvements payable by the real estate benefited by such improvement by making a reassessment therefor, notwithstanding that the proceedings of the common council or board of public works or any of its officers may be found irregular or defective, whether jurisdictional or otherwise; when such reassessment is completed all sums paid on the former attempted assessment shall be credited to the property on account of which the same was paid.”

This section was just as much a part of the law as it existed at the time the improvement was made, entering into the transaction and fixing the rights of the parties, as was § 7705 providing for the estimate. It is an unequivocal declaration that the insufficiency of the estimate is no bar to a reassessment to pay for the improvement, “charging the property benefited with the expense thereof” not exceeding “the actual cost and value of the improvement” and interest. That there might be no mistake as to this intention, the section concludes with the emphatic declaration of an intent to authorize such reassessment even when the proceedings of the council or officers “may be found irregular or defective, whether jurisdictional or otherwise.” These same provisions, without a material change and almost in haec verba, are reenacted in § 43 of the statute of 1911 (3 Rem. & Bal. Code, § 7892-43), under which the reassessment here in question was made.

The Department opinion, still overlooking the identity of § 43 of the act of 1911, so far as material to the point in*201volved, with § 6 of the statute of 1893 (2 Rem. & Bal. Code, § 7899), or failing to note the controlling significance of that fact, says:

“We may assume, as a matter of law and practice in all cases of this kind, that the sum estimated is a fair amount to be allowed for the improvement; that it is the limit of power and is binding upon the city. If it is not so, the legal effect of the statute of 1911 is to permit the council of cities of the third class, where improvements have been made under the former law, to assess the cost without reference to the law under which the improvement was made, and thus destroy the right of the individual property owner to protest or to be heard in remonstrance.”

We can assume none of these things on a reassessment made by the city in the exercise of the expressly conferred power to reassess for the “actual cost and value of the improvement.” To so assume, as a matter of law, would be to ignore the law as written and rewritten by the legislature as a continuing law since 1893. To so assume, as a matter of practice, would be to ignore the fact that, at the time of the reassessment, the actual cost had been determined by actual construction of the improvement to be greater than the estimate. To assume that the estimate is “the limit of power binding upon the city” in a reassessment would be to strike from the law as it has existed practically unchanged since 1893 the specific declaration as found in § 43 of the statute of 1911:

“Nor shall the omission, failure or neglect of any officer or officers to comply with the provisions of law . . . as to . . . estimate . . . operate to invalidate or in any way affect the making of any assessment authorized in the preceding section,” etc. 3 Rem. & Bal. Code, § 7892-43.

The preceding section (Id., § 7892-42), is the section authorizing a reassessment “based upon the actual cost of such improvement at the time of its completion.” It would ignore the fact that the statute of 1893, p. 229, § 6 (Rem. & Bal. Code, § 7899) contains the same declaration, as follows:

*202“Nor shall the omission, failure or neglect of any officer or officers to comply with the provisions of the charter or laws . . . as to . . . estimate . . . operate to invalidate or in any way effect [affect] the making of the new assessment or reassessment as provided for by this chapter,” etc.

The same chapter authorizes a new assessment or reassessment for the improvement “based upon the actual value of the same at the time of its completion.” (Rem. & Bal. Code, § 7894). It is true that, as to original assessments made by cities of the third class under the provisions of §§ 7705 and 7706, which accorded no notice or hearing to the property owner at any time throughout the entire original proceeding before the council except the notice publishing the resolution containing the estimate, we have assumed that the sum estimated was the limit of the power estopping the city to assess for more in that proceeding. This for the .simple reason that the published notice of hearing on the estimate was in such original assessment proceeding the only hearing accorded to the property owner. Chehalis v. Cory, 54 Wash. 190, 102 Pac. 1027, 104 Pac. 768; Chehalis v. Cory, 64 Wash. 367, 116 Pac. 875; Collins v. Ellensburg, 68 Wash. 212, 122 Pac. 1010; Peabody v. Edmonds, 68 Wash. 610, 123 Pac. 1018. In none of those cases were we speaking of anything save the original assessment. That this is the only sound basis of those decisions is pointed out in Inner-Circle Property Co. v. Seattle, 69 Wash. 508, 511, 125 Pac. 970, where, touching the Cory case, which is the prototype of the other two, we said:

“A reading .of that decision will show, however, that the conclusions there reached by the court were because of the special provisions of the statute relating to local improvement assessments in cities of the third class, Rem. & Bal. Code, §§ 7705, 7706, requiring such estimate to be made, notice thereof to be given to the property owners, and an opportunity for them to protest against the making of the proposed improvement, before it could be finally ordered by the council, and prohibiting the council from ordering such *203improvement over the protest of the property owners except upon certain conditions. No other hearing was afforded the property owners before the council as to the making of the improvement nor as to the regularity and correctness of the assessment levied by the council. The only recourse of the property owners under that statute was by an original action in the courts against the assessment, or in resisting the lien of the assessment when it is sought to be foreclosed in the courts.”

Obviously the lack of a sufficient estimate and notice of hearing thereon in the Cory case, the Collins case and the Peabody case, is so far from precluding the right of the city to entertain proceedings to reassess in such cases for the actual cost after giving notice of a hearing upon the one vital question of benefits, that it furnished the very ground and necessity for such reassessment, under the specific terms of the statute, as then and now existing. This is far also from saying, as said in the Department opinion, that to sustain the reassessment “is to say that the property owners have no rights that cannot be destroyed by the legislature.” On the contrary, it is to say that they have the right to a hearing at some time in the course of the proceedings before the council. If that right is not accorded as to the full amount of the cost of the work by reason of an insufficient estimate at the only hearing given in the original proceeding, then the property owner can only be assessed in that proceeding his proportion of the estimate distributed according to benefits. In order to charge him with any part of the actual cost of the improvement above the estimate, a reassessment is necessary so that he may not be deprived of his right to a hearing on the one vital question of the proportional benefits to his property. It is because his right to a hearing cannot be destroyed or ignored that a reassessment or supplemental assessment based on notice and a hearing is essential. It was distinctly so declared in State ex rel. Barber Asphalt Paving Co. v. Seattle, 42 Wash. 370, 85 Pac. 11, holding not only that the city has the right to reassess, but that the con*204tractor who, in pursuance of a proceeding initiated without notice to the objecting property owners, has constructed the improvement and conferred the benefits can, by mandamus, compel a reassessment on the property benefited to pay the cost. There the property owners in an outer zone of sixty feet were reassessed to help pay for an improvement the original notice of the assessment for which did not include their property or advise them that they would be required to bear any part of the cost. The first assessment was held void as to their property because made without notice. The reassessment on the same property for the same improvement, in Johnson v. Seattle, 53 Wash. 564, 102 Pac. 448, was sustained because made with notice and a hearing on the question of benefits. On no sound principle can that case be distinguished from this, either in morals or in law. The following language in the Johnson case exactly expresses the situation here:

“The cases brought under the old assessment above referred to are not res adjudícala, for the reason that the old assessment is superseded by the reassessment. Those cases had reference to the old assessment, and were res adjudícala as to the questions raised therein; but they are not so as to the reassessment, further than a payment under the old assessment becomes by the ordinance a payment pro tanto under the reassessment. The assessment is identical with the red figures in the old assessment, and appears to be a fair assessment for benefits received by the property in the district. It is not claimed that the property improved has not received benefits to the amount of the reassessment.”

In this respect there is no difference between assessments and reassessments by cities of the first class and cities of a lower grade. In the absence of an adjudication of the actual amount of special benefits to specific property assessed, the prior judgment is res judicata, in proceedings to reassess, of nothing save the invalidity of the first assessment roll. East Hoquiam Co. v. Hoquiam, 90 Wash. 210, 155 Pac. 754; Ryan v. Sumner, 17 Wash. 228, 49 Pac. 487; Waldron *205v. Snohomish, 41 Wash. 566, 83 Pac. 1106; Frederick v. Seattle, 13 Wash. 428, 43 Pac. 364; Cline v. Seattle, 13 Wash. 444, 43 Pac. 367; Inner-Circle Property Co. v. Seattle, 69 Wash. 508, 125 Pac. 970; Allen v. Bellingham, 77 Wash. 469, 137 Pac. 1016; State ex rel. Hindley v. Superior Court, 82 Wash. 37, 143 Pac. 455; 2 Page and Jones, Taxation by Assessment, § 991. There is nothing in §§ 7705 and 7706, under which the original assessment was made, declaring or implying that the original estimate shall he assumed to be the limit of benefits in a proceeding to reassess. On the other hand, as we have seen, the reassessment law, as found both in the act of 1893 and in the act of 1911, makes the failure of the preliminary estimate a specific ground for reassessment. Indeed, the failure or insufficiency of the. initial estimate is typical of the cases in which the power to levy a reassessment or supplemental assessment is most frequently invoked.

“Cases of this sort arise most frequently where the original assessment is based upon a preliminary estimate, and is levied before the improvement is completed, or before the cost thereof is determined as a finality. In rarer instances, the exercise of the power is sought where, owing to some mistake, the cost of the improvement has been computed erroneously, and the assessment has been levied for too small an amount to meet the cost of the improvement.” 2 Page and Jones, Taxation by Assessment, § 932.

The Department opinion, being based upon a misconception of the law touching reassessments as it existed when the improvement was made, reaches a palpably erroneous conclusion.

But there is another fundamental error in the Department opinion making it unsound, even if the power to reassess for “the actual cost and value of the improvement at the time of its completion” had been first conferred upon the city by the statute of 1911. That error lies in the assumption that the legislature, by requiring a preliminary estimate of the *206cost of the work and a notice and hearing thereon in the old law (Rem. & Bal. Code, § 7705), made that estimate a final limitation upon its own inherent constitutional power to authorize, by subsequent enactment, a reassessment or supplemental assessment for the actual cost and value apportioned according to benefits upon the property specially benefited. The limitation imposed by the estimate and notice was a limitation estopping the city alone, and m that proceeding based on that notice alone, to assess beyond the amount of the estimate. That was all that was held in the Cory case, in the Collins case and Peabody v. Edmonds, supra, because that was all there was before the court in those cases. That the legislature has the power to authorize a reassessment even where the city council had never acquired any jurisdiction to levy the original assessment or to order the work done, was held by this court in Frederick v. Seattle, supra, where it is said:

“The retrospective power of the legislature over subjects of assessments and taxation where past proceedings have proved defective or irregular by reason of the want of power in local boards to act, or by reason of non-compliance with existing provisions of law, is well established by the authorities. One of the leading cases on this question is that of Mills v. Charleton, 29 Wis. 400 (9 Am. Rep. 578), where it was decided that the reassessment of a tax under a new grant of authority is not a re-opening of the judgment by which the former assessment was declared invalid and proceedings thereunder restrained; and that it did not conflict with the general rule that a statute which operates to annul or set aside the final judgment of a court of competent jurisdiction and to disturb or defeat vested rights is void; the distinction being that the general rule had reference to matters of mere private right.”

See, also, State ex rel. Hemen v. Ballard, 16 Wash. 418, 47 Pac. 970. Such is the view generally entertained by the courts. 2 Page and Jones, Taxation by Assessment, § 959.

“The rule applicable to cases of this description is substantially the following: If the thing wanting or which *207failed to be done, and which constitutes the defect in the proceedings, is something the necessity for which the legislature might have dispensed with by prior statute, then it is not beyond the power of the legislature to dispense with it by subsequent statute.” Cooley, Constitutional Limitations (7th ed.), p. 531.

See, also, 4 Dillon, Municipal Corporations (5th ed.), § 1469; Seattle v. Kelleher, 195 U. S. 351; Owings v. Olympia, 88 Wash. 289, 152 Pac. 1019.

In every view of the matter, we are convinced that the attempt under the prior law to assess for the full cost of an improvement, abortive, either wholly or in part, by reason of an insufficient estimate, did not exhaust the power expressly conferred by the legislature upon the city to reassess to pay the actual cost of the improvement and interest if within the actual special benefits conferred upon the property assessed.

It has been argued, in substance, that, if the reassessment for the actual cost of the improvement apportioned according to benefits to the property assessed be sustained in this case, the property owner will be robbed of his judgment in the original case and has no rights which the legislature is bound to respect. But the power conferred upon the legislature by the constitution (art. 7, § 9), and exercised by the legislature in the law authorizing such a reassessment, existing now and when the improvement was made, cannot be phrased away in such fashion. If the system of local assessments on the property benefited to pay the actual cost of local improvements is wrong in theory, it is for the people to correct that wrong by amending the constitution, or for the legislature to repeal the laws plainly conferring the power on the city. It is not for the courts, by any process of judicial attrition through strained construction, to seek to wear away the power granted in plain terms. But the property owner is robbed of nothing. His judgment in the first assessment has insured him a hearing on the question *208of proportional benefits, which is the only constitutional right he ever had in the premises. If his property has been benefited by the improvement, he is robbed of nothing when that property is assessed to pay its proportional share of the cost within that benefit. The benefits conferred furnish the moral basis, hence the only natural limit to the right of reassessment for the cost of the improvement. East Hoquiam Co. v. Hoquiam, supra; Seattle v. Kelleher, supra.

We deem it a matter of no importance that the law governing original assessments, as amended by the act of 1911, now requires no preliminary estimate; a hearing before the council on the question of benefits being now accorded instead of the former hearing on the estimate. But the hearing on benefits in case of a reassessment has always been accorded ever since the passage of the act of 1893. If the new law as to original assessments dispensing with the estimate is valid as furnishing due process of law, then also is the law affording • the same hearing on the reassessment. Johnson v. Seattle, supra. When the new reassessment law and the old reassessment law are considered together, the one as a substantial reenactment of the other, the question here presented becomes a simple one. We have discussed it thus at length because of the confusion occasioned by some of our own utterances.

Some question is made as to the right to include in the new assessment interest on the first $6,025 of warrants issued for this improvement, from the date of their issuance to the date when the first assessment for that amount began to bear interest. The inclusion of interest in the reassessment was proper. Philadelphia Mortgage & Trust Co. v. New Whatcom, 19 Wash. 225, 52 Pac. 1063; Northwestern and. Pacific Hypotheek Bank v. Spokane, 18 Wash. 456, 51 Pac. 1070; Lewis v. Seattle, 28 Wash. 639, 69 Pac. 393; Johnson v. Seattle, supra. We can conceive of no reason why the particular item of interest referred to should not fall within the rule.

*209The Department opinion is overruled, the judgment of the trial court is reversed, and the cause is remanded with direction to confirm the new roll.

Morris, C. J., Holcomb, Main, Mount, and Parker, JJ., concur.