115 F. 37 | 9th Cir. | 1902
after stating the case as above, delivered the opinion of the court.
The question of the right of the plaintiff in error to prosecute the suit against the defendant in error, as and for the purposes set forth in the bill depends upon the principles involved in the discussion of the cases of Jordan v. Cass Co., 3 Dill. 185, Fed. Cas. No. 7,517; Cass Co. v. Johnston, 95 U. S. 360, 24 L. Ed. 416; and Davenport v. Dodge Co., 105 U. S. 237, 26 L. Ed. 1018. In Jordan v. Cass Co. the bonds had been issued by the county court of the county in the name of the county, but on behalf of a township. Although the suit was brought against the county, it was not contended that the bonds were the proper debt or obligation of the county, or that payment could be enforced against the property of the county or against the taxpayers thereof in the county at large. The bonds recited that they were authorized by a two-thirds vote of the township. The question was whether the bondholder could for any purpose maintain an action on the bonds against the county in whose name the bonds were made. The court said of the bonds:
“It is clear that they imposed no obligation on the county, and equally clear that the real or ultimate liability is on the taxable property within the township. But how, and against whom, is this liability to be enforced and made available?”
The court then referred to the fact that the legislature had provided the mode of raising the means for paying the bonds by the collection of taxes, and that it had enjoined upon the county court the duty of levying such tax, which duty, the court remarked, might be enforced by mandamus; but, since the federal court had no original jurisdiction in mandamus, the plaintiff could have no remedy in
“It seems clear when the legislature directed the bonds to issue in the name of the county that it meant to give the bonds additional legal value;” and added, “There must have been a purpose in requiring the bonds to be issued in the name of the county,” and said further, “It seems to us that the provision that the bonds shall be issued in the name of the county implies a liability on the part of the county to be sued so far as is necessary to give effect to the rights of the holders of the bonds, consistently with the provisions of the constitution.”
In Cass Co. v. Johnston, the bonds were issued under the same act as in the case last cited. The supreme court, speaking by Chief Justice Waite, said:
“It is finally objected that, as the bonds are in fact the bonds of the township, no. action can be maintained upon them against the county. Without undertaking to decide what would be the appropriate form of proceeding to enforce the obligation in the state courts, it is sufficient to say that in the courts of the United States, we are entirely satisfied with the conclusions reached by the court below, and that a judgment may be rendered against the county, to be enforced, if necessary, by mandamus against the county court or the judges thereof, to compel a levy and collection of a tax in accordance with the provisions of the law under which the bonds were issued. The reasoning of the learned circuit judge in Jordan v. Cass Co., 3 Dill. 185, Fed. Cas. No. 7,517, is, to our minds, perfectly conclusive upon this subject.”
In Davenport v. Dodge Co. the bonds had been issued under an act of the legislature of Nebraska, authorizing counties, cities, towns, and precincts to borrow money on their bonds, or to issue bonds to aid the construction of works of internal improvement in the state. The bonds recited that a certain precinct in the county of Dodge was indebted to the bearer, but they were signed by the county commissioners. The court said:
“When county bonds are issued under the statute in question, it is expressly provided that they shall constitute a debt against the county, to be paid by the levy and collection of taxes on all the taxable property within the county. If aid is voted by a precinct, bonds also are to be issued, differing only from county bonds in that they are to be paid from taxes levied upon property within a precinct.”
After referring to the fact that a precinct could not become the obligor of precinct bonds, the court further said:
“We think it follows that the county, which does have a corporate existence, and can contract and be contracted with, and upon whose officers-is imposed the duty not only of issuing the bonds, but of providing for the payment of them, is the political entity bound by the obligation and charged with the debt created thereby. * * * We think, therefore, that the special bonds which the county commissioners are to issue for the precincts are, in legal effect, the special bonds of the county, payable out of a special fund to be raised in a special way.”
Turning now to the act under which the bonds in the present suit were issued, entitled “An act to authorize the widening of Dupont
The ground upon which the right to bring suit against the county in the three decisions we have referred to was maintained was not that the county was under obligation to pay the bonds, or was in any way liable for the debt which they represented, but upon the ground that the bonds were in form the bonds of the county, and a duty had been imposed upon the county with reference to the payment thereof. Although the debt was in each case primarily the debt of the township, the county stood in such relation to the township and to the bonds as to require the exercise of its official authority in the matter of levying, assessing, and collecting taxes, wherewith to pay the bonds. We think the present case comes clearly within the principle of those decisions. The provision in the act of the legislature that the city and county of San Francisco shall not be liable for the debt created by the bonds does not absolve it from responsibility to provide the means for the payment of the bonds in the manner pre•cribed by the act. The counties which were the defendants in the suits above mentioned were not liable in any way for the payment of the bonds or the debts thereby represented, yet they were under
It is said that the ruling of the circuit court is supported by the cases of Meath v. Phillips Co., 108 U. S. 553, 2 Sup. Ct. 869, 27 L. Ed. 819, and Liebman v. City and County of San Francisco (C. C.) 24 Fed. 705. In the first of these cases the bonds had been issued under an act of the state of Arkansas providing for the division of certain overflowed lands into levee districts for the purpose of reclaiming the lands, and for the taxation of such lands to pay the expenses incurred in that behalf. The business was to be managed by levee inspectors, and payment was to be made by their drafts on the levee treasurer, appointed by the county court of the county to receive and disburse according to law all funds raised from levee taxes in the county. The county court was to levy a tax upon the property benefited, to be collected like other taxes, and to be paid to the levee treasurer. The court referred to the decisions which we have just discussed, and distinguished the case then pending from those cases upon the ground that in the Case of the County of Cass the law provided in terms for the issue of bonds in the name of the county, and that the court had also held that the same was true in the Case of the County of Davenport; “consequently,” said the court, “there were in those cases obligations of the counties payable out of special funds. Here, however, there has been a manifest intention to bind the levee districts by the obligation incurred, and not to make the county in its political capacity responsible for the payment of the debts that were created for levee purposes under these laws.” The language so quoted points out the essential distinction between the case at bar and the Phillips Co. Case. The bonds in the present case are the bonds of the city, and are payable out of a special fund to be provided by the city. So, in the Eiebman Case, the question at issue was the liability of the city and county of San Francisco on the Montgomery avenue bonds, which were issued under an act of the legislature, the object of which was to open a public street in the city of San Francisco. The
“The so-called bonds to which the coupons in the controversy were attached ate not obligations of the city and county. They are not executed by it, or under its seal, or by its agents or officers, but by certain parties constituting the board of public works. * * * The so-called bonds, which are in fact only orders or promises of the board of public works that the treasurer will pay to the holder of the amounts designated, cannot be the foundation of any liability of the city and county.”
Referring to the Cases of County of Cass and County of Dodge, the learned justice remarked:
“In all of them the bonds were issued in the name, or were in law the obligations, of the municipality against which the judgment was prayed, though in some of them the funds for the payment of the judgment were to be collected by a special tax upon the property of a particular district.”
The concurring opinion of Sawyer, Circuit Judge, was based on the following considerations: That the act was not an amendment of the city charter, and conferred no authority whatever upon the corporation to do any act in its corporate capacity; that it imposed no duty upon the municipality relating to the opening of the street, or to the collection or the payment of the cost of the improvement; and that the bonds were not the bonds of the city and county. Of the County of Cass and County of Dodge Cases Judge Sawyer said:
“The bonds in the former ease were issued by the county in the name' of the county by express direction of the statute. In the latter ease the bonds were issued by the county commissioners, the governing body of the county, in pursuance of an express provision of the statute for a precinct indebtedness. * * * These cases are therefore entirely different from the ease under consideration.”
The learned judge proceeded to remark that the city and county in its corporate capacity “has no relation to those bonds, and no duties to perform in connection therewith. The duties to be performed, whatever they may be in connection with the bonds and coupons in suits by parties who are also officers of the city and county, are, in my judgment, to be performed by them, under the.
The demurrer of the defendant in error raises the point that the suit cannot be maintained against the city and county alone, but that the owners of the real estate which would be subject to taxation to raise funds to pay the bonds and coupons must be joined as codefendants. We do not think the complainant in such a bill is required to bring into the suit any other defendant than the obligor on the bonds. The cause of suit is against the maker of the instrument on which the suit is brought, not -against the taxpayers whose property may be taxed to pay the same. In a suit against a municipal corporation the inhabitants are not parties, and cannot be made parties, although their property may be taken to satisfy the judgment against the corporation. Lane v. Fourth School Dist., 10 Metc. 462; Chandler v. Railroad Com’rs, 141 Mass. 208, 5 N. E. 509.
The demurrer raises the further objection that the cause of action upon all but two of the coupons is barred by the statute of limitations. Section 9 of the act provides that the bonds shall be payable in 20 years, and that coupons for the semiannual interest shall be attached to each bond. The bonds bear date January 1, 1877. The present suit was commenced June 22, 1900. By the statute of limitations of California (section 337, Code Civ. Proc.) actions on such written instruments are barred after four years. All the coupons matured more than four years prior to the commencement of this suit, except the last two, which became due, respectively, July 1, 1896, and January 1, 1897. In Leffingwell v. Warren, 2 Black, 599, 17 L. Ed. 261, it was said:
“The courts of the United States, in the absence of legislation upon the subject by congress, recognize the statutes of the several states, and give them the same construction and effect which are given by the local tribunals.”
That doctrine has been affirmed in Green v. Neal’s Lessee, 6 Pet. 291, 8 L. Ed. 402; Harpending v. Dutch Church, 16 Pet. 455, 10 L. Ed. 1029; Davie v. Briggs, 97 U. S. 628, 24 L. Ed. 1086; and Amy v. Dubuque, 98 U. S. 470, 25 L. Ed. 228. In the case last cited it was also held that the statute of limitations of the state of Iowa begins to run against coupon interest warrants from the time when they respectively mature, although they remain attached to-the bond which represents the principal debt. In reaching that conclusion the court proceeded upon principles which apply generally to all cases of actions upon coupons, except where the question is controlled by some peculiar statutory provision or decision of a-
The decree will be reversed, and the cause remanded for further proceedings not inconsistent with the foregoing views.