Title Guarantee & Trust Co. v. City of Long Beach

LANGDON, J. This is a petition for a writ of mandate to compel the levy of a tax sufficient to pay a portion of a judgment against respondent city.

In 1928 bonds in the sum of $2,700,000 were voted by the electors of the city for certain harbor improvements. In 1929, a contract for certain of the work was let to C. J. Kubach Company, for the price of $838,034.09. The contractor notified the city of certain alleged defects in the plans and specifications, but was ordered to proceed with the work, and did so. Between May and July of 1930, a number of bulkheads constructed under the contract gave way. The contractor claimed that their failure was caused by defective plans and specifications, and ceased performance. In August, 1930, the city, after notice to the contractor, took over the work and completed it subsequently at a greater cost than the contract price.

[58]On November 14, 1930, C. J. Kubach Company filed with the city a claim under its contract for $213,970.22. The city refused payment, and suit was filed April 28, 1931. Judgment was given in favor of the contractor for $117,822.59, together with costs, the total amounting to $118,433.09. No appeal was taken by the city and the judgment became final. It was assigned by the contractor to Title Guarantee and Trust Company for collection. Execution was had on certain real property in 1933, and a net return of $34,707.52 was credited on the judgment. The balance is still unpaid.

On or about July 1, 1934, demand was served on the city that a sum sufficient to pay at least one-tenth of the judgment be included in the tax levy for the year 1934-35. In the meantime the city council was recalled. On August 31, 1934, the said demand was repeated. Under the provisions of section 257 of the city charter, the council had until the first Tuesday in September to fix the tax rate, and under the statute providing for payment of judgments against counties and municipalities (Stats. 1901, p. 794; 2 Deering’s Gen. Laws, 1931, Act 3918) at least ten per cent of the judgment should be included in the tax levy for the purpose of paying an aliquot part thereof. Without any notice or intimation to petitioners that their demand would be refused, the tax rate was fixed without making any provision for such payment.

Petitioners then sought a writ of mandate in this court to compel the amendment of the tax levy to include the said sum, and praying for general relief. A demurrer and an answer was filed by respondent city, but the essential facts, as above stated, are not in dispute.