Appeal, No. 23, Jan. T., 1952, from judgment of Court of Common Pleas of Berks County, Nov. T., 1944, No. 69, in case of C. R. Miller v. City of Reading. Judgment reversed.
Charles H. Weidner, with him Stevens & Lee, for appellant.
C. Wilson Austin, City Solicitor, for appellee.
Before Drew, C.j., Stern, Stearne, Bell, Chidsey and Musmanno, JJ.
OPINION BY MR. JUSTICE HORACE STERN
We adopt the plaintiff-appellant's statement of the question involved as follows: "In an action of assumpsit to recover the principal and interest on a municipal improvement bond which purports to be payable solely out of assessments limited to certain properties, where the parties expressly stipulate in a case stated that by reason of the city's negligent failure to collect the assessments the full amount of the bond became due and payable as of a certain date, is not the plaintiff holder of the bond entitled to interest from such date at the legal rate of 6% rather than at the rate of 5% specified in the bond?"
In their case stated the parties agreed that the City of Reading, during the years from 1928 to 1935, issued certain improvement bonds bearing interest at the rate of 5% per annum payable semi-annually. Each of the bonds provided that "This bond, principal and interest, is based solely and rests alone for its security and is payable only out of the assessments made and levied upon the properties benefited by the local improvement (street improvement) for which this bond is issued and from no other fund. It is expressly understood that the City of Reading is to be liable only for the amount collected on the said assessments and as fast as collected and as soon as there is sufficient money in the hands of the City Treasurer, from said assessments, in excess of interest due on outstanding bonds, he shall call in the bonds for payment in the order in which they are issued,...." The City of Reading admitted, in the case stated, that, while it paid the interest on
the bonds from the dates of issue until certain specified defaults which occurred in the year 1943, it never paid any interest thereafter, and that on those "respective dates of default the full principal amount of each of said bonds became due and payable." It also admitted that it "negligently failed and neglected to collect the assessments provided for in said bonds and breached its implied covenant to pursue all reasonable measures as provided by law to collect said assessments securing said obligations, and thereby became liable for the payment of the principal of said bonds and the interest due thereon from the respective dates of dafault as aforesaid." Plaintiff, owner of 44 of the bonds, each in the face amount of $1,000, demanded payment of the principal sum of $44,000 with interest thereon at the rate of 6% per annum from said respective dates of default. According to the case stated the City, on August 1, 1949, offered to redeem plaintiff's bonds in their face amount with interest at the rate of 5% per annum from the respective dates of default of the bonds, but refused to pay either principal or any part of the interest unless plaintiff accepted principal and interest on the basis of 5% per annum. It was stipulated that if the court should be of opinion that plaintiff was entitled to 6% interest on the principal amounts of his bonds from their respective default dates then judgment should be entered in his favor based on a calculation of interest at that rate, but if the court decided that plaintiff was entitled only to 5% interest on the principal amounts then judgment should be entered in his favor based on a calculation in interest at that rate from the respective default dates of the bonds to August 1, 1949, when tender was made to plaintiff by the City on that basis.
The court below held that plaintiff was entitled only to the 5% interest rate, and, on May 2, 1951, entered judgment accordingly in the sum of $57,971.03. By
agreement of the parties that amount was thereupon paid by the City to plaintiff without prejudice to the latter's claim for additional interest which the City agreed to pay in case it was decided on appeal to this court that plaintiff was entitled ...