Frank R. Gaynor

The case involved property owners suing to enjoin the City of Glenwood from carrying out a street paving contract and assessing the costs against their abutting properties, arguing that the resulting city indebtedness would exceed Iowa's constitutional five-percent limit based on the value of taxable property. The trial court ruled for the city and dismissed the petitions, and the Iowa Supreme Court affirmed. The court held that the city's total outstanding debt, even after adding the unassessed portion of paving costs, remained below five percent of the assessed valuation of all taxable real and personal property within city limits as shown on the last tax list. It further reasoned that a preliminary engineer's cost estimate served only an advisory purpose and did not cap the final assessment or deprive the city of jurisdiction to proceed once the work was completed.

propertytaxesbusiness & regulatory

The case involved a supplier of sewer construction materials suing the principal contractor and its surety on a performance bond after the contractor failed to pay for materials used in a town sewer project. The trial court sustained a demurrer and dismissed the claim against the surety, but the Iowa Supreme Court reversed. The court held that the bond, read together with the underlying contract language requiring the contractor to pay for all materials, created a direct obligation enforceable by the supplier. It further concluded that the surety had waived any defense based on the supplier's failure to perfect a statutory claim against the town by filing a federal suit to protect itself from the supplier's claim and obtain an impoundment of contract funds.

business & regulatoryprocedure