Gause v. City of Clarksville

| U.S. Circuit Court for the District of Eastern Missouri | Mar 9, 1880

Treat, J.

Most of the legal propositions involved in this case were heretofore decided on the demurrers to some of the counts. 8 Am. Law Reg. 497.

In the case of Wood v. The City of Louisiana, recognized as correct by Judge Dillon in Ms opinion on said demurrers, it was held that although a municipality issued bonds which it had no authority to issue, and no recovery could be had on the bonds as such, yet if the money derived therefrom was received for an authorized purpose and applied to that purpose, an action would lie as for money had and received, and that the bpnajide holder of said bonds could recover as assignee of the original demand. i

This doctrine receives some support from the views expressed in the case of Little Rock v. National Bank, 98 U.S. 308" court="SCOTUS" date_filed="1878-12-23" href="https://app.midpage.ai/document/little-rock-v-national-bank-89871?utm_source=webapp" opinion_id="89871">98 U. S. Rep. 308, and Shirk v. Pulaski County, 4 Dill. 209" court="None" date_filed="1877-04-15" href="https://app.midpage.ai/document/shirk-v-pulaski-county-9299956?utm_source=webapp" opinion_id="9299956">4 Dill. 209.

Accepting the doctrines thus stated, it was for the plaintiff to prove what amount the city actually received for wharf and for street improvement bonds, respectively. The evidence sbowsdthat these bonds sold at par, and that the proceeds thereof were paid into the city treasury, and expended for the specific purposes designated. There were ordinances of the city authorizing said improvements, and making the needed appropriations therefor, all of which were lawful, and the money raised therefor by the sale of said bonds faithfully applied. Hence, under the rulings heretofore made in this case, the plaintiff is entitled to recover the amounts so actually loaned, with unpaid interest due from date of demand, at the rate of 6 per cent.

The city bought a cemetary Jot, to pay for which it borrowed $1,500, and issued a bond for $1,650. As there was no power to issue a bond thdrefor, the recovery can be only for $1,500, with unpaid interest, at the rate of 6 per cent.

The foregoing items covep all the counts, from the first to the eleventh, inclusive, on (which, as held, there can be no recovery; but that the plaintiff would be remitted, to his count for money had and received.

The demands embraced in counts from 12 to 17, inclusive, are on bonds issued in payment for subscription to gravel roads, held by Judge Dillon to be a lawful exercise of municipal authority, from which view I dissented. As his ruling must prevail, the only question open under this head is as to two of said bonds, which the evidence shows were issued on renewal, not for part payment of said subscription alone, but for an additional sum also, then borrowed for general uses of the city. It has been contended that said bonds, though invalid, pro tanto, as to the amount in excess of what pertained to said subscription, should be held valid as to the amount included therein for which the city had authority to issue negotiable securities. If this were so, a suit on a specialty would necessarily require an examination into the various items of the consideration therefor, and thus, instead of proceeding as' on a specialty, with the legal presumption arising therefrom, cause the -single demand under one legal head to be split into an indefinite number of demands under various heads.

As to those two bonds of this last named series, therefore, the recovery must be had under the count for money had and received; while on the other bonds the recovery will be had as on specialties, according, to their tenor. The counts from 18 to 27, inclusive, are also on subscription bonds. To these bonds it is objected.that the required assent of the voters was not obtained, because, though numerically the needed vote was given, yet tht^ voters were not registered, nor did they take the oath prescribed by the state constitution of 1865. It was conceded, but if not, such is the fact, that the registration clause alluded ü¡o was not then in force. No doubt the prerequisite of the\oath for qualification to vote was then in operation. Whether such oath was duly administered or not to each voter is Voubtful, in the light of the testimony; and if not administered to all, how many voters failed to take it is still more uncertain. It seems that the vote was nearly unanimous in flavor of the proposition; so that, if the inquiry were to extend to each vote, it might appear that the required number of qualified voters did assent to the subscription.

The ascertainment of the precise facts in this regard is considered unimportant, inasmuch as the ordinance under which these bonds were issued recites that the needed election was duly had, etc. If a recital on the face of the bonds estops the municipality, as held in all similar cases on municipal bonds, the same rule should obtain when the recital is in the city ordinance; for the reason of the rule is the same in both instances.

Two of said bonds are dated after the registry act of the state was in force, and therefore are not valid, as bonds, on their face. An effort was made to show, by the evidence, that they were delivered before, and post-dated; but the court finds otherwise. Hence, the recovery on those two bonds must bo as for money had and received. As to the fourteenth count the facts are, substantially, that the original bond was lawfully issued, and that the holder of said bond agreed to surrender the same and accept a renewal bond therefor. Said original bond was returned to the city, and what purported to be a renewal bond was issued in lieu thereof, but the latter bond was void, because the city failed to comply with the requirements of the then existing law. Hence, the original bond, being unsatisfied, remains a valid bond, on which a right of action can be maintained, such original bond being produced by plaintiff as the holder thereof.

There is a grave question of jurisdiction presented, relating to the plaintiff’s interest in this suit. It seems that the bonds sued on, and the rights resulting from the assignment thereof, were transferred to the plaintiff, a citizen of Texas, for the purpose of having Mm sue thereon in a United States court— evidence concerning which was received, subject to the ruling of the court as to its admissibility under the issues. By the practice act of Missouri, as uniformly ruled, the holder of negotiable paper, to whom the same is transferred merely for the purpose of collection, can maintain an action thereon in his own name. But it is urged that if such transfer, or the assignment of a demand, negotiable or non-negotiable, is for the purpose of having the same adjudicated in a United States court, there is a fraud on the jurisdiction of the latter court. Such a question should have been presented by a plea in abatement. This case furnishes an apt illustration. The time of counsel and court has been occupied for a long period on the merits of this controversy, when, if a plea in abatement had been interposed, a few hours might have sufficed for its determination. If the court, through issues made by pleas in abatement, or in bar, had ascertained that no jurisdiction exists, its judgment would be dismissed without passing on the merits. There are, however, no issues in this case under which evidence of the hind, to defeat the jurisdiction, can be received. There is no time at command to analyze the varied learning on the subject, and the decided cases to which the learned counsel have referred. A few are referred to in a note to this opinion. If practicable, a special finding would have been made as to each count;- but this opinion will clearly show the conclusions reached and the grounds on which the decision rests.

Note. — Conrad v. The Atlantic Ins. Co. 1 Pet. 450; De Wolf v. Raband, 1 Pet. 476" court="SCOTUS" date_filed="1828-03-17" href="https://app.midpage.ai/document/dwolf-v-rabaud-85593?utm_source=webapp" opinion_id="85593">1 Pet. 476; Sims v. Hundley, 6 How. 1" court="SCOTUS" date_filed="1847-12-21" href="https://app.midpage.ai/document/sims-v-hundley-86430?utm_source=webapp" opinion_id="86430">6 How. 1; Bailey v. Dozier, 6 How. 1" court="SCOTUS" date_filed="1847-12-21" href="https://app.midpage.ai/document/sims-v-hundley-86430?utm_source=webapp" opinion_id="86430">6 How. 1; Smith v. Kernschen, 7 How. 198" court="SCOTUS" date_filed="1849-01-16" href="https://app.midpage.ai/document/smith-v-kernochen-86472?utm_source=webapp" opinion_id="86472">7 How. 198. This covers the whole ground on the jurisdictional question.

Sheppard v. Graves, 14 How. 505" court="SCOTUS" date_filed="1853-02-23" href="https://app.midpage.ai/document/sheppard-v-graves-86801?utm_source=webapp" opinion_id="86801">14 How. 505 ; Jones v. League, 18 How. 76" court="SCOTUS" date_filed="1855-12-18" href="https://app.midpage.ai/document/jones-v-league-86976?utm_source=webapp" opinion_id="86976">18 How. 76. These cases discuss the question at great length, both as to pleadings and colora ble assignments.

Dred Scott v. Sandford, 19 How. 393" court="SCOTUS" date_filed="1857-03-18" href="https://app.midpage.ai/document/dred-scott-v-sandford-87116?utm_source=webapp" opinion_id="87116">19 How. 393. This case seems to haveheld, though by adivided court, that, whether the want of jurisdiction appeared, through aplea in abatement or in bar, the judgment of the court must be a dismissal, and not a judgment on the merits. In the case on trial there is no plea, either in abatament or in bar, under which the question can arise; or, in other words, there is no issue in which any evidence on the jurisdictional point could be admitted. Subsequently there was the case of Spencer v. Lapsley, 20 How. 264" court="SCOTUS" date_filed="1858-02-25" href="https://app.midpage.ai/document/spencer-v-lapsley-87155?utm_source=webapp" opinion_id="87155">20 How. 264, in which no reference was made to the Dred Scott case, but in which it was held that pleas in abatement and in bar, at the same time, were irregular.

Thompson v. Railroad Companies, 6 Wall. 134" court="SCOTUS" date_filed="1868-01-13" href="https://app.midpage.ai/document/thompson-v-railroad-companies-87897?utm_source=webapp" opinion_id="87897">6 Wall. 134, does not establish a different rule. That states proceedings in a court of equity — an old and familiar rule — and refers to the Ohio statute as to actions at law. In Missouri the real party in interest, or a trustee of an express w»ust, may sue.