Board of Com'rs v. Geer

108 F. 478 | 8th Cir. | 1901

ADAMS, District Judge,

after stating tbe case as above, delivered tbe opinion of tbe court.

Tbe judgment of this court on tbe first writ of error is tbe law of this case, from which, under well-settled authority, we could not, if we would, depart. Balch v. Haas, 36 U. S. App. 693, 20 C. C. A. 151, 73 Fed. 974; Haley v. Kilpatrick (C. C. A.) 104 Fed. 647 and cases cited. We cannot, therefore, now reconsider any question which was necessarily involved in and determined at the former hearing of this case. An examination of the record on file in this court shows that the two most prominent assignments of error argued at the first hearing were:

“That the court erred in overruling plaintiff’s demurrer to the defendant’s sixth and seventh defenses, and each of them, and in sustaining defendant’s demurrer to the plaintiff’s replication to said sixth and seventh defenses, and each of them.”

The seventh defense and the replication then under consideration are the same as those hereinbefore set out and now under consideration. This court said, in its opinion rendered on the former hearing (Geer v. Board, 97 Fed. 435, 441, 38 C. C. A. 250, 256), as follows:

“The seventh defense was that there never were any judgments in payment or satisfaction of which the bonds were issued. This is a good defense against the bonds in the hands of the original creditor, who accepted them in exchange for the indebtedness of the county to him, upon which he had obtained no judgments. The plaintiff replied to this defense, however, that he had acquired the bonds and coupons for value, before maturity, without notice of any defect" in them, and that he paid the consideration for his purchase in reliance upon the recital, which was contained in each bond, that it was issued, by virtue of the act of 1889, ‘in satisfaction at par of judgments and accrued interest thereon which have been rendered in the courts of record in this state against Ouray county aforesaid.’ ”

The trial court had overruled a demurrer to the seventh defense as pleaded, and had thereby pronounced it a good defense. This rul-. ing, being distinctly challenged by the plaintiff, was approved by this court in the language already quoted. The replication was practically a confession and avoidance. It says, in effect, even if there were in fact no judgments in satisfaction of which the bonds in question were issued, the plaintiff purchased the bonds in good faith, with no knowledge oí any such infirmity and in reliance upon defendant’s recital, found in the bond, that such judgments had in fact been rendered. The legal sufficiency of this replication was distinctly presented for our determination at the former hearing of the case, and the court then said:

“The demurrer to the replication to the seventh defense should have been overruled.”

This replication was, by the language just quoted, distinctly held to be good in law, and in the language hereinbefore quoted from the opinion was held to have been specifically invoked by the plaintiff to overcome the otherwise “good defense” set up in the amended answer. In the light of the record and opinion in the former case, we conclude unanimously that the pleadings adopted by the parties to this suit, as heretofore coustrued by this court, presented a triable issue as lo whether, even if there were no underlying judgments to support the bonds in question, the plaintiff purchased them without knowledge of such defect and in reliance upon the recital to the contrary found in the bond. This conclusion renders it unnecessary and improper to enter into any original consideration of the pleadings.

As this case must be remanded for a new trial, we will indicate for the guidance of the trial court the conclusion reached on the second assignment of error, relating to the allowance of interest on the face value of the coupons sued on. Section .2252, Mills’ Ann. St. Colo., so far as applicable to this case, is as follows:

“Creditors shall be allowed to receive interest, when the,re is no agreement as to the rate thereof, at the rate of eight per cent, per annum for all moneys after they become due on any bond, bill, promissory note, or other instrument of writing. * * *”

It may he conceded that no interest would be recoverable on these coupons without statutory authority to that end, hut we cannot appreciate the distinction sought to he made between the municipal coupons in question and coupons taken from bonds or obligations of individuals. The bonds and coupons now in question were issued by the municipality in the exercise of its contractual powers. It had incurred an indebtedness, and, needing money to pay the same, proceeded to borrow it. In the exercise of powers of this character, as distinguished from governmental powers, the municipality is not entitled to invoke for its protection any immunity pertaining to it as a sovereign or governing bodv. In the case of Illinois Trust & Sav. Bank v. City of Arkansas City, 40 U. S. App. 257, 22 C. C. A. 171, 76 Fed. 271, this court drew a sharp distinction, supported by abundant authority, between the principles affecting a municipality in its business functions and those affecting it in its legislative or governmental functions. It is there said:

“It may exercise the business powers conferred upon It in the same way, and in their exercise it is governed by the same rules that govern a private individual or corporation.”

The act of April 17, 1899, authorized the county to issue its bonds, ■with coupons annexed representing interest maturing at certain periods. These coupons, when executed as required by the act, became separate and distinct obligations of the county, and contained all essential features of a promissory note or other commercial paper, and, when severed from the bonds, became independent claims. Clark v. City of Iowa City, 20 Wall. 583, 22 L. Ed. 427; U. S. Mortg. Co. v. Sperry, 138 U. S. 313, 11 Sup. Ct. 321, 34. L. Ed. 969. Conformably to the principles just announced, the general statutes in force at the time the bonds and coupons were issued (section 2252, supra) became in our opinion applicable to these coupons. They were “promissory notes” or “other [like] instruments of writing” within the meaning of that statute, and bore interest from their maturity as therein provided. This conclusion is supported by the following-authorities: Gelpcke v. Dubuque, 1 Wall. 175, 17 L. Ed. 520; Clark v. City of Iowa City, supra; Walnut v. Wade, 103 U. S. 683, 26 L. Ed. 526; Koshkonong v. Burton, 104 U. S. 668, 26 L. Ed. 886; Scotland Co. v. Hill, 132 U. S. 107, 10 Sup. Ct. 26, 33 L. Ed. 261; Mortg. Co. v. Sperry, supra; City of Cairo v. Zane, 149 U. S. 122, 13 Sup. Ct. 803, 37 L. Ed. 673, and cases cited; Hughes Co. v. Livingston (C. C. A.) 104 Fed. 306; Simonton, Mun. Bonds, § 101.

The judgment is reversed, and the cause remanded for a new trial.