16 N.W.2d 83 | Mich. | 1944
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *574
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *575 This is a bill in chancery filed by the township of Royal Oak against the city of Berkley for an accounting of their respective personal property rights arising from the incorporation of the city of Berkley out of an unincorporated part of the township. The city by answer denies any indebtedness and by cross bill also asks for an accounting. The case was heard on proofs regarding certain disputed issues, the facts being stipulated as to other issues, and decree was entered for a substantial amount in favor of the city. The city appeals, claiming the court erred as a matter of law in some of its computations and conclusions. After issue was joined most of the matters in controversy were settled by stipulation filed in the case as follows:
"It is hereby stipulated and agreed that on April 4, 1932, defendant, city of Berkley, was incorporated from a portion of the territory formerly included within plaintiff township, at which time the assessed valuation of the territory detached represented 17.72856 per cent. of the total assessed valuation of plaintiff township.
"It is further stipulated and agreed that the following statement of assets and liabilities of plaintiff township, prepared by defendant, sets forth the book value of the assets and liabilities of plaintiff township and is accepted by the parties hereto as the basis for a division of the assets and liabilities of plaintiff township, subject to such modifications as may be made thereto when the legal question hereinafter set forth shall have been decided by the court: *577
"Assets
"Cash on hand ............................................... $ 80,178.61 "Collections S.A. Rolls 1 to 3 inclusive and 21 ............. 826.96 "Accounts receivable county treasurer ....................... 38,366.97 "Tax collections (general fund) ............................. 156,150.26 "Accounts receivable — Ferndale ....................... 112,678.81 "Accounts receivable — Royal Oak ...................... 20,122.64 "Accounts receivable — Pleasant Ridge ................. 9,138.44 "Physical assets ............................................ 4,443.68 ___________ "Total assets ............................................ $421,906.37
"Liabilities
"Dog license account ........................................ $ 1,115.15 "School taxes collected by township ......................... 11,989.05 "State and county taxes ..................................... 12,324.67 -------------------------------------------------------------------------- "Advances by county treasurer ............. $20,000.00 "(All types of taxes) "Temporary loans ....... 140,000.00 __________ "(Pledging all types of taxes and used in all different funds)
"Total .................................... $160,000.00 "Cash expenditures over cash receipts special assessment districts ... 33,552.87 "Cash expenditures over cash receipts fire and road district funds .... 94,312.58 _________ "Total .................................... 127,865.45 __________ "Net liability general fund only ............................ 32,134.55 _________ -------------------------------------------------------------------------- "Total liabilities ......................................... $57,563.42 "Total assets ............................. $421,906.37 "Total liabilities ........................ 57,563.42 ___________ "Net ................................... $364,342.95
"17.72856% of net — $64,592.75
"The parties hereto are not in agreement as to that portion of the foregoing statement as to `liabilities,' included within the lines as above set forth, and it is mutually agreed that testimony thereon shall be presented by the respective parties and the court shall determine the questions presented as a matter of law. *578
"It is stipulated and agreed that testimony will be submitted by the respective parties concerning Berkley's right to participate in certain uncollected taxes and money received from the `so-called' scavenger sales, together with testimony concerning the right of Berkley to receive interest on any amount which may be found to be owing to it.
"It is further stipulated and agreed that all questions concerning the liability of defendant, city of Berkley, on special assessment bonds issued by plaintiff township prior to the date of incorporation of said city, shall be reserved for further consideration of the court in another cause now pending, and, the decree to be entered herein shall provide that, if necessary, a supplemental decree shall be entered herein after the decision of said question."
The township produced testimony by a certified public accountant employed as its auditor continuously since 1935. The defendant produced the testimony of the accountant who had audited its books since 1932. Comprehensive audits were received as exhibits. Nothing of interest would be accomplished by including in this opinion the details of the extensive computations which appear in the record. The accounting was heard by the circuit judge on the proofs as narrowed down by the stipulation. The questions before us for decision concern the four items totaling $127,865.45 in that portion of the stipulation hereinbefore quoted appearing between the heavy lines. The accuracy of the other figures adduced is not in issue.
No serious question arises over the first two items in the disputed area of the stipulation. They represent money borrowed by the township and are a liability of the township for which the city must stand its proportionate share. The applicable part of the statute governing these items provides:
"The indebtedness and liabilities of every city, village and township, a part of which shall be annexed to a city shall be assumed by the city to which the same is annexed in the same proportion which the assessed valuation of the taxable property in the *579 territory annexed bears to the assessed valuation of the taxable property in the entire city, village or township from which such territory is taken." 1 Comp. Laws 1929, § 2250, as amended by Act No. 233, Pub. Acts 1931 (Comp. Laws Supp. 1940, § 2250, Stat. Ann. § 5.2093).
The chief dispute arises over the last two items between the heavy lines of the stipulation covering claimed cash expenditures by the township over cash receipts from certain special assessment district funds. The computations in the stipulation were made by the city, and these two disputed items as they appear in the stipulation include money due to the township from the special assessment districts but which has never been received by the township because of the noncollection of special assessment taxes. The city's computation of these disputed items also includes money in bank in special assessment district accounts which has not been turned over to the township. The township claims that these items should not have been included in figuring the township property on hand, that they should not be included in computing the township's liability to the city unless and until they are collected. The court held with the township, that these moneys could not be charged against the township as cash on hand at the time the city was incorporated, because the township had not yet received them. The court further held — and the decree so provides — that the city should be entitled to its share of these moneys only if and when they were collected by the township. The city argues for reversal of this ruling.
While it is plain that these claims of the township against the special assessment districts are in a sense personal property of the township, the critical issue is whether the township must at this time be held to account for these items as cash, or may the *580 settlement be deferred until these items become cash instead of "accounts receivable." This involves a construction of the applicable part of the statute governing the question. It provides:
"Whenever a new city shall be incorporated, the personalproperty of the township from which it is taken shall be divided and its liabilities assumed between such city and the portion of the township remaining after such incorporation, in the same ratio as herein provided in case of the annexation of a part of a township to a city." 1 Comp. Laws 1929, § 2250, as amended by Act No. 233, Pub. Acts 1931 (Comp. Laws Supp. 1940, § 2250, Stat. Ann. § 5.2093).
Prior to this 1931 amendment the statute provided only for a division of the real estate. Township of Springwells v. WayneCounty Treasurer,
It is conceded that the township had advanced funds to both the road repair and fire department special assessment districts before defendant city was incorporated. The city claims that the township was "obligated" to reassess this deficiency in the special assessment districts and to "apply the next money collected" to the repayment of the moneys thus advanced. As to that, the question of the duty to reassess is not an issue in this case. In fact, counsel for the township concede that the city would "undoubtedly * * * have a right to mandamus or any other available remedy to compel the township to act." Counsel for the city contend: "that the deficiency caused by the advancements of township general funds to road repair local improvement districts was required by law to be reassessed subsequent to 1932, and that therefore Berkley is entitled to insist on such reassessment and to be reimbursed out of such collections, or to be paid in full therefor if the townshipneglects to reassess."
It is conceded that the city is entitled to insist on such reassessment, and we concur with the holding of the lower court that the city is entitled to its pro rata share of the money when and as collected. We do not agree that the city is now entitled "to be paid in full * * * if the township neglects to reassess."
According to the record, some of these special assessment districts are no longer in existence, and a portion of the taxable property in other such districts has become the property of the State for non-payment *582 of taxes. Any money to be derived from a reassessment of these delinquent special assessments cannot at the present time be classed as cash of the township on hand for pro rata accounting to the city. To the extent that these items are "bad debts," perhaps worthless items owing to the township, the township cannot be required to include the same in its present accounting. We agree with the trial court that the city is entitled to its share only if and when the same are collected by the township.
The appellant city claims it is entitled to interest on general tax collections, and on interest-bearing funds collectible by the township since the date of the city's incorporation. As we have said, the city is entitled to share pro rata in the collections, made by the township since the date of incorporation, from accounts receivable against the special assessment districts in the disputed area of the stipulation. Included in such money received by the township there doubtless will be interest or penalties collected by the assessment district from the taxpayers. This may be included as a part of the money received by the township as payment on its "account receivable," although collected by the district as interest. The township must be held to account to the city for its pro rata share of all the money received from special assessments or reassessments if and when collected until its account is paid in full. The right of the city to participate in the same, if and when collected, is not foreclosed by the stipulation. But this does not mean that the township receives interest on itsaccounts receivable. Nor does it mean that the township must account to the city for interest on its accounts receivable. If it receives none, it cannot be required to account for it. The city claims it is entitled to interest on accounts receivable by the township from delinquent general taxes, and from "accounts *583 receivable" from Ferndale, Royal Oak and Pleasant Ridge. But these taxes and "accounts receivable" were listed in the stipulation and charged against the township for pro rata division, as assets, property on hand, in 1932. They are not charged as deferred accounts receivable and for that reason the city is not entitled to claim interest received by the township subsequent to 1932 on these items which are outside of the disputed area in the stipulation.
The stipulation reserves to the city the right to claim participation in certain uncollected taxes, money received from scavenger sales of real estate, and "interest on any amount which may be found to be owing to it," as stated above. The right of the city to participate in uncollected taxes from special assessments or reassessments covered in the disputed area of the stipulation, but only if and when collected, is upheld. The right as to other taxes is foreclosed by the stipulation. The lower court held that the city could participate in moneys received by the township from scavenger sales for taxes due prior to its incorporation, and this should have been specifically provided for in the decree.
The city asks for interest on any amount which may be found to be owing to it. The statute referred to, supra, governing the rights of these parties as to division of property and assumption of liabilities, does not support the city's claim of interest on the amount found owing. With certain exceptions (see Mitchell
v. Reolds Farms Co.,
About seven months after decree was entered in the court below, and while the appeal was pending in this court, appellant filed a motion here to remand for further testimony. This motion was denied without prejudice to our ordering a remand for further testimony if we found the need to appear. This motion is now renewed in the record before us. The effect of ordering a remand for the taking of such testimony would in large part be to set aside the stipulation on which the case was heard and decree entered, and to inject new issues into the case. We see no need for further testimony on the issues in the case, or to change the issues which have been settled between the parties by the stipulation filed.
The decree is modified to incorporate a provision as to division of receipts from scavenger sales in accordance herewith; otherwise it is affirmed. No costs are awarded, the questions involved being of a public nature.
NORTH, C.J., and STARR, WIEST, BUTZEL, BUSHNELL, SHARPE, and REID, JJ., concurred.
