Jeffreys v. Point Richmond Canal & Land Co.

LANGDON, J.

Plaintiff sued as the purchaser for value of over two hundred street bonds issued by the city of Richmond in the year 1917 under the Street Improvement Act of 1911 (Stats. 1911, p. 730). Judgment went for the plaintiff for the amount prayed and also for the foreclosure of separate liens upon the lots involved. The defendant Mintzer Estate Company was the owner of a mortgage upon the property upon which the bonds were a prior lien, and said company is the only defendant who has appealed from the judgment.

The facts are undisputed. The appellant is the holder of two promissory notes from the owner of the lots involved, which were secured by a mortgage on the lots and which

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were taken in the year 1920, subsequent to the issue and delivery of all the bonds and at a time when the owner of the lots was in the hands of a receiver. Both notes were taken by the appellant to secure payment of a past due indebtedness and both the notes and the mortgage were taken at a time when the corporation debtor was insolvent.

No question is raised on this appeal affecting the validity of the proceedings under the Street Improvement Act by which the bonds were issued and no suggestion is made that the work, in payment for which the bonds were issued, was not properly done in accordance with the contract.

The action was brought in 1923. Between the date of the issuance of the bonds in 1917 and the commencement of the action the act under which the bonds were issued had been amended (Stats. 1921, p. 297), providing for foreclosure proceedings in court in the event of default in payment of principal or interest. Prior to this amendment, the Street Improvement Act provided two distinct remedies against the delinquent property owner—first, a summary sale of the property by the city treasurer on demand of the bondholder, and, second, a foreclosure of the lien of the assessment at the suit of the contractor. By the amendment to section 76 of the act made in 1921 it was expressly provided that “by way of a separate, distinct and cumulative remedy, the holder of any bond . . . may file and maintain a suit to foreclose the lien of the bond in the same manner provided in this act for the foreclosure of the lien of delinquent assessments.” The amendment also provided for a simple method of pleading and proof in such cases, for substituted service of process where the lot owner could not be found, for the foreclosure of the lien of the bond, and for attorney’s fees and costs. The right of redemption of the property after sale was preserved “as in other cases.”