City of Eau Claire v. Payson

Decision Date09 April 1901
Docket Number728.
Citation107 F. 552
PartiesCITY OF EAU CLAIRE v. PAYSON et al.
CourtU.S. Court of Appeals — Seventh Circuit

James Wickham and B. W. Jones, for appellant.

John M Olin and Harry L. Butler, for appellees trustee and bondholders.

Wm Ruger, for appellee receiver.

F. M Miner, for appellee Eau Claire Waterworks Co.

This suit was brought by the trustee in a deed of trust executed by the Eau Claire Waterworks Company to secure a series of bonds, and by holders of the bonds, for the purpose of obtaining a decree of foreclosure. Besides the water company the city of Eau Claire was made a defendant, and relief asked against it on the ground that by the ordinance under which the waterworks were constructed the city became bound to levy a special annual tax for the payment of hydrant rentals, the proceeds of the tax to be set apart as a 'fire hydrant fund,' applicable exclusively, as provided in the ordinance and in the trust deed, to the payment of interest upon the bonds. The bill alleges that 'hydrant rentals, amounting to twenty-four thousand and fifty-four dollars' (three semiannual installments), 'have heretofore been collected by the defendant city, by special tax therefor, and are now on hand in the treasury of the defendant city as a special fund for the payment of said interest,' and prays that the trust deed may be declared a lien thereon, that the city be decreed to pay the same to the trustee, and further asks the appointment of a receiver, with the usual power over all the property, rights, and franchises of the water company, and of the moneys which are or shall become owing by the city for hydrant rentals or otherwise. A copy of the ordinance referred to is set out, and the following provisions thereof have been emphasized in the briefs and oral argument:

'Sec. 6. * * * And a sufficient tax shall be levied and collected annually upon all the taxable property on the assessment roll of the city of Eau Claire, to meet the payments under this ordinance when and as they will respectively mature during the existence of any contract for hydrant rentals, which tax shall be irrepealable; and in case the city of Eau Claire shall be authorized (and such authority was given by the act of February 18, 1885) to levy a special tax for such purchase (purpose), such tax shall be annually levied and the proceeds thereof shall be kept as a separate fund, known as 'Fire Hydrant Fund,' and shall be irrevocably and exclusively devoted to the payment of hydrant rentals under this ordinance, and shall not be otherwise employed. * * * '

The ordinance also contained provisions imposing obligations upon the water company in respect to the character, construction, capacity, maintenance, and extension of its plant, requiring it, among other things, to supply the city and its inhabitants with 'good and wholesome water, suitable for domestic, manufacture and fire purposes,' and to have a filtering apparatus 'so constructed, operated and maintained as to furnish at all times suitable water for domestic use. ' Upon the filing of the bill and service of process, the waterworks company at once appeared and answered, and thereupon the court appointed the appellee W. H. Willard receiver, and directed him to take immediate possession of all the property of the company, to conduct the company's business, to continue the operations of the plant, to institute and prosecute all suits, actions, and proceedings necessary in his judgment for the protection of the property and the trust vested in him, to defend suits and actions, and out of the money coming into his hands 'in the operation of said properties' to pay, in their order, current expenses, taxes, and assessments, sums due employes, officers, or attorneys for services rendered during the past six months, and for supplies furnished during that period, and, with the sanction of the court, amounts necessary to protect the property from sale under leases, pledges, mortgages, or contracts; 'and the money belonging to said company, not used as hereinbefore provided, shall be held by said receiver until he is authorized to dispose of the same under the order or decree of this court.'

This appointment was made on July 2, 1900. On the ensuing 23d, upon the verified petition of the receiver,-- not filed, apparently, until two days later,-- the court ordered the city of Eau Claire to show cause, if any it had, on or before August 3, 1900, why an order should not be made in accordance with the prayer of the petition, and that the city serve upon the solicitor of the petitioner, five days before the day of the hearing, 'any and all papers or documents of every kind and description' which the city desired to use at the hearing. The petition of the receiver, in substance, reiterated the averments of the bill, and prayed an order requiring the city and its treasurer to attorn to the petitioner, and forthwith pay to him the rentals due to the amount of $24,054, and a further sum of $400 alleged to be due. On the day appointed for the hearing the city entered a written appearance by its solicitor 'for the purpose of objecting to the relief prayed for in the order to show cause,' and submitted 'affidavits for such purpose only, and to show that the relief prayed for should not be granted, and not for the purpose of submitting on this motion, or in this action, for determination, the question of what amount, if any, is due from the city of Eau Claire to the Eau Claire Waterworks Company, the trustee or receiver, the said city objecting that said question cannot be determined on this motion or in this action, and it does not desire in any manner to waive its said objection.' The affidavits of the city clerk and other officers, read at the hearing on behalf of the city, besides denying performance of the contract by the waterworks company, show that whatever taxes had been levied and collected for the payment of water rental had been included in a general levy for city purposes, and 'that no special tax was levied or assessed by said city of Eau Claire for the year 1898, the year 1899, or the year 1900, or at any other time, to deponent's knowledge, as a special or separate tax for the payment of hydrant rentals, either under the name of the 'Fire Hydrant Fund,' or under any other name whatever; that there is no fund in the hands of the city treasurer of said city known as the 'Fire Hydrant Fund'; there is no separate fund in his hands collected or kept for the purpose of paying hydrant rentals; that all moneys heretofore paid to the Eau Claire Waterworks Company, for hydrant rentals, while deponent has been city clerk of said city, and prior to that time, as far as deponent knows or can ascertain, have been paid out of the general fund of said city on verified claims of said Eau Claire Waterworks Company, presented to the common council of said city from time to time, and allowed by the council in the manner that other claims are presented against, and allowed by, said city.'

The court having heard the affidavits and the arguments of counsel, and, as the entry reads, 'it satisfactorily...

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8 cases
  • United States v. 243.22 Acres of Land, 349.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • June 26, 1942
    ...714; Rector v. United States, 8 Cir., 20 F.2d 845, 860, 861; Marian Coal Co. v. Peale, 3 Cir., 204 F. 161, 163, 164; City of Eau Claire v. Payson, 7 Cir., 107 F. 552. The decisions as to the appealability of judgments of condemnation seem, at first glance, to preclude our retaining jurisdic......
  • Rector v. United States
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • May 28, 1927
    ...A. 2), an order authorizing receiver's certificates and making them prior to mortgage and to earlier certificates. In City of Eau Claire v. Payson, 107 F. 552 (C. C. A. 7), an order requiring city to pay a sum of money to a receiver and making no provision for its return in any case. The co......
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    • September 22, 1948
    ...sense, but have been given a liberal and reasonable construction. Forgay v. Conrad, 6 How. 201, 203, 12 L.Ed. 404; City of Eau Claire v. Payson, 7 Cir., 107 F. 552, 557." In Cobbledick v. United States, 309 U.S. 323, 328, 60 S.Ct. 540, 84 L.Ed. 783, the opinion by Mr. Justice Frankfurter co......
  • American Waterworks & Guarantee Co. v. Home Water Co.
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    • United States District Courts. 8th Circuit. United States State District Court of Eastern District of Arkansas
    • March 26, 1902
    ......Smith, for complainant. . . W. J. Terry, W. L. Terry, and Morris M. Cohn, for city of Little. Rock. [115 F. 172] . . The. complainant, the American Waterworks & ...v. Memphis Water. Co., 107 U.S. 205, 2 Sup.Ct. 279, 27 L.Ed. 484; City. of Eau Claire v. Payson, 46 C.C.A. 466, 107 F. 552; on. rehearing, 48 C.C.A. 608, 109 F. 676. In New York ......
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