City of Defiance v. McGonigale

Citation150 F. 689
Decision Date02 February 1907
Docket Number1,580.
PartiesCITY OF DEFIANCE v. McGONIGALE. [1]
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

John H Doyle and Henry B. Harris, for plaintiff in error.

Henry &amp Robert Newbegin, for defendant in error.

Before LURTON, Circuit Judge, and SWAN and EVANS, District Judges.

EVANS District Judge.

The plaintiff in error is a city of Ohio of the fourth grade of the second class, and by its council on August 17, 1887 passed an elaborate ordinance granting to Samuel R. Bullock & Co., their associates, successors, and assigns, the right and privilege of erecting, maintaining, and operating a system of waterworks in said city for a period of 30 years. For the purposes of this case it will suffice to set forth part of section 1 and all of section 3 of the ordinance, as follows:

'Section 1. That in consideration of the public benefit to be derived therefrom, the right and privilege is hereby granted for the period of thirty years from the time that this ordinance takes effect, unto Samuel R. Bullock & Co., their associates, successors and assigns, of erecting, maintaining and operating a system of waterworks in accordance with the terms and provisions of this ordinance and such other ordinances as may hereafter be passed from time to time by the said council of said city of Defiance, Ohio, and of using the streets, alleys and public squares and all other public places within the corporate limits of the city of Defiance, Ohio, as they now exist or may hereafter be extended and within such other territory as may now or hereafter be under its jurisdiction, for the purpose of laying pipes, mains and other conduits, and erecting hydrants and other apparatus for conducting and furnishing an adequate supply of good wholesome water to the city of Defiance and to its inhabitants for public and private use, and for making repairs and extension to the said system from time to time during the period of which this ordinance shall be in force.'
'Sec. 3. In consideration of the public benefit and of the protection to property resulting from the construction of said system of waterworks, the city council of said city of Defiance, Ohio, hereby rent of the said Samuel R. Bullock & Co., their associates, successors or assigns, one hundred and thirty double nozzle frost-proof fire hydrants for the aforesaid period of thirty years, at the annual rental of forty dollars per year for each hydrant, payable semiannually on the 1st day of January and July in each and every year. The rental of all hydrants in excess of said one hundred and thirty shall be at the annual rate of thirty-five dollars for each hydrant payable as aforesaid during the unexpired period of said term of thirty years. Water shall be used from the said hydrants for the extinguishment of fires and necessary fire practice and flushing sewers, provided that for fire practice and flushing sewers no more than two hydrants shall be opened at one time and only when considered necessary by the chief of fire department and superintendent of waterworks, and also for all sanitary purposes and the washing out of gutters and ditches in the streets of said city under the control of the city council and the superintendent in charge of the works.'

In due course the rights of Bullock & Co. were acquired by the Defiance Water Company, which promptly, and within the next 18 months, constructed its works at an expense of about $196,000, and, on the 1st day of March, 1889, began to supply the city with water for fire extinguishing and other necessary purposes, as provided for in the ordinance. More than the 130 hydrants were needed by the city, and from time to time others were supplied by the water company upon the city's request, and all accrued rentals were paid by the city until the semiannual rentals due January 1, 1898, matured. The city of Defiance, through its solicitor, as authorized by the laws of Ohio, on January 4, 1898, instituted an action in the court of common pleas of Defiance county to enjoin the collection of the rentals then due, upon the ground that the ordinance of August 17, 1887, was void, first, because it was never submitted to the qualified voters for ratification, and, second, because the ordinance made a contract for 30 years, when under the laws of Ohio, the city had no power or authority to make one of over 20 years' duration. Possibly there were other objections urged, but only those referred to are now material. That case was litigated in that court and also in the circuit court. Finally it was taken to the Supreme Court of the state, and further along we shall have occasion to more especially refer to what was there determined. However, from and after July 1, 1897, the city, for fire extinguishing and other essential purposes of its own, continued unhesitatingly to use the water supplied by the water company through its hydrants, but refused to pay for any part of it, except $756 thereof, which was paid January 1, 1898. Possibly largely resulting from this course of conduct on the part of the city the water company became unable to pay its debts. The Metropolitan Trust Company of New York having brought an action in equity in the Circuit Court of the United States for the Northern District of Ohio against the company, that court, on March 30, 1904, appointed the defendant in error its receiver, put him in charge of the company's property, and gave him authority, among other things, to institute suits for the collection of debts due it. McGonigale, the receiver thus appointed, alleging himself to be a citizen of the state of Kentucky, brought this action against the plaintiff in error, a citizen of Ohio, for the recovery of the hydrant rentals accruing under the contract between July 1, 1897, and January 1, 1904, less the credit of $756. The trial of the case resulted in a verdict in favor of the receiver for $51,815.80, together with interest upon each semiannual installment from the time it became due and until paid. The plaintiff in error seeks the reversal of that judgment.

1. At the conclusion of the testimony both parties moved the court for a directed verdict. The court overruled that of the defendant, but sustained the motion of the plaintiff, and directed a verdict in his favor for the whole amount claimed in his petition with interest, and a verdict was returned accordingly. In its opinion in Beuttell v. Magone, 157 U.S. 154, 15 Sup.Ct. 566, 39 L.Ed. 654, the Supreme Court said:

'As, however, both parties asked the court to instruct a verdict, both affirmed that there was no disputed question of fact which could operate to deflect or control the question of law. This was necessarily a request that the court find the facts, and the parties are therefore concluded by the finding made by the court, upon which the resulting instruction of law was given. The facts having been thus submitted to the court, we are limited in reviewing its action to the consideration of the correctness of the finding on the law, and must affirm if there be any evidence in support thereof.'

This court has frequently enforced this rule, and in disposing of the case before us we are limited to the consideration of the correctness of the result reached by the trial court in its determination of the legal questions involved, as there was evidence to support the findings of fact if the questions of law were correctly decided.

2. Several defenses were interposed by the defendant, only three of which need be noticed. It was objected that the appointment of McGonigale as receiver was void, because he was a citizen of Kentucky, and the statute of Ohio forbids the appointment of any one as receiver in any case in that state who was not a citizen and resident of Ohio. We are clearly of opinion that there is no force in this objection, because the statute of Ohio cannot control the action of a court of the United States in respect to such matters. The force and effect of the Ohio statute must be limited to the courts of that state, and doubtless that was all that was intended or contemplated by the state Legislature, as it is obviously beyond the power of such body to regulate the appointment of the officers or agents of the courts of the United States. It is not regarded as necessary to cite authorities upon this proposition.

3. The contention is much pressed that the ordinance of August 17, 1887, was void because it was not submitted to the qualified voters of the city for ratification under the act of January 29, 1885 (82 Ohio Laws, p. 11), which provides that:

'Any municipal corporation except cities of the first grade of the first class, shall have power to contract with any individual or individuals, or any other incorporated company, for supplying water for fire purposes, or for cisterns, reservoirs, streets, squares, and other public places within the corporate limits, or for the purpose of supplying the citizens of such municipal corporation with water for such time, and upon such terms as may be agreed upon. Provided, that no such contract shall be executed or binding upon any such municipal corporation until the same shall have been ratified by a vote of the electors thereof, at a special or general election, and such municipal corporation shall have the same power to protect any such water supply and prevent the pollution thereof as though such waterworks were owned by said municipal corporation.'

If this act embraced the controlling legislation, it might be said certainly to have required the submission of the ordinance to the qualified voters of the city for ratification; but we think it clear that the act just referred to was not in force as to the grade and class of cities to which Defiance then belonged. In our opinion the act of May 12,...

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