Bates County, Mo., v. Wills

• Decision Date: 01 February 1917
• Docket Number: 4650.
• Citation: 239 F. 785
• Parties: BATES COUNTY, MO., v. WILLS et al.
• Court: U.S. Court of Appeals — Eighth Circuit

239 F. 785

BATES COUNTY, MO., v. WILLS et al.

No. 4650.

United States Court of Appeals, Eighth Circuit.

February 1, 1917

Frank Hagerman, of Kansas City, Mo. (Thomas J. Smith, of Butler Mo., on the brief), for plaintiff in error.

John F Green, of St. Louis, Mo. (William Mumford, of Pittsfield Ill., Frank M. Lowe, of Kansas City, Mo., and Frederick N Judson, of St. Louis, Mo., on the brief), for defendants in error.

Before SANBORN, ADAMS, and CARLAND, Circuit Judges.

PER CURIAM.

A. B Wills, W. V. Wills, and Emmett S. Wills, the plaintiffs below, brought an action against Bates county, Mo., to recover the amount which they alleged that that county owed them for excavating a part of the third section of a certain drainage ditch in that county under a contract between the county and Timothy Foohey & Sons, dated May 2, 1906, which, so far as it concerned the third section of the ditch, Foohey & Sons had assigned to the plaintiffs. In the course of the performance of the contract the plaintiffs encountered stone which they claimed that they were not required to remove under its terms, but the county denied this claim and on August 6, 1908, the plaintiffs and the county made an agreement that the plaintiffs should proceed to remove from the ditch all the material which they conceded they were required to take out under the contract without prejudice to the rights and claims of either party. Under this agreement the plaintiffs removed a large amount of material, but the county declined to pay them for its removal on the ground, among other things, that the original contract provided that the engineer should make estimates of the work done monthly and that 90 per cent. of his estimates should be paid when made respectively, but that no payment should be made until such estimates were made, and that the engineer had never made any estimates of the work done by the plaintiffs under the second agreement subsequent to August 6, 1908. Thereupon, on April 3, 1909, the plaintiffs commenced this action for $58,000, which they alleged that the county owed them for their work in excavating this ditch, and by an amendment to their complaint made before the last trial they alleged in substance that the engineer by a failure to exercise his honest judgment, or by fraud, or such gross mistake as implied bad faith, withheld the estimates of their work to which they were entitled. The county denied liability and the averments of the complaint charging it, upon various grounds, and also pleaded a counterclaim of $40,000 on account of excavation it alleged that it was compelled to make to complete the ditch and on account of expenses it incurred and damages it sustained by reason of the plaintiffs' failure to complete it. At the close of the trial the jury found for the plaintiffs in the sum of $42,609.08, and for the county on its counterclaim in the sum of $11,610.70. A judgment was thereupon rendered against the county for $30,998.31. This case has been twice tried, and a more exhaustive account of its earlier course may be found in the opinion of this court on a review of the first trial in Bates County v. Wills et al., 190 F. 522, 111 C.C.A. 354.

Counsel for the county originally maintained that the county was in no manner liable on the contract, that the agreement was that of the drainage district, and that the drainage district alone was liable upon it. But upon consideration this court was of the opinion that the contract was that of the county, that it differed from the general contracts of the county only in the fact that the funds to pay for its performance were to be collected by the county from the property in the drainage district for which the drain was excavated, while those to pay for the performance of its general contracts were to be collected by the county from all the property in the county. 190 F. 526, 111 C.C.A. 354. It is now contended that, although when this contract was made and when this action was brought the county was liable upon the contract and was the only proper defendant to this action, yet the county has been relieved from its contractual relation, or at least from its liability on the contract, and rendered exempt from action and judgment thereon, and the reorganized district has become the only party liable and the only proper defendant here, because the drainage district in which the ditch here in question was excavated was permitted to and did reorganize under the act of the Legislature of Missouri of March 24, 1913. Laws of Missouri 1913, pp. 232 to 267, Secs. 52, 56, 57, 58. See, also, Laws of Missouri 1913, pp. 271, 281, Sec. 2, and the act to repeal certain sections of article 4, c. 41, of the Revised Statutes of Missouri 1909, approved March 27, 1913, Sec. 2, p. 281,

But these statutes fail to convince of the soundness of this contention. The drainage district was originally organized under article 4 of chapter 41, which was repealed by the act of March 27, 1913, and since that act it has been reorganized under the act of March 24, 1913. The sections of the act of March 24, 1913, material to this question, provide that any drainage district in Missouri theretofore organized under any laws of that state may be reorganized under that act (section 52), that immediately after such reorganization the county clerk shall turn over to the secretary of the drainage district the papers and records belonging to the district and the county treasurer shall transfer the funds of the district to him (section 56), that no reorganization shall invalidate any indebtedness, liability, or contract of any nature incurred by a district under its former organization, but all such indebtedness, liability, or contract shall attach to and become the debt or liability of the new organization (section 57), and that when proceedings have been begun under the provisions of the sections repealed by the act of April 8, 1905 (Laws 1905, p. 190), they may be proceeded with and completed under the new act, that all liens, remedies, and processes for the collection of taxes provided for in the new act shall, so far as applicable, be available for the collection of taxes levied and bonds issued under the sections repealed, and when drainage districts have been incorporated under sections repealed, and the work of drainage has been commenced or completed in whole or in part, no rights or obligations incurred by district or individual shall be nullified, invalidated, or for naught held (section 58). The act of March 27, 1913, which repeals certain sections of article 4 of chapter 41 of the Revised Statutes of Missouri 1909, under which this drainage district was originally organized, provides that the repeal of sections specified in section 1 of that act and the re-enacting of other sections in lieu of the sections repealed, and the enacting of new sections in addition thereto, shall not have the effect of invalidating, suspending, or vitiating any drainage district heretofore organized, or any proceedings now pending in any of the courts of the state for the organization of any drainage district under article 4 of chapter 41, and that all contracts entered into, all liens established, and other obligations created, including warrants and bonds issued by drainage districts heretofore organized under the provisions of said article 4 of chapter 41, are hereby declared to be valid, and the county courts shall levy sufficient tax to pay all such forms of indebtedness. Section 2, Act of March 27, 1913, Laws of Missouri 1913, p. 281.

When these acts were passed, the county of Bates was liable to the plaintiffs under the contract here in suit, the plaintiffs had a right of action upon this contract, and this action had been brought against the county to enforce that liability. Unless there was some constitutional enactment in these laws which deprived the plaintiffs thereof, that liability and their right of action against the county thereon still exist. A careful reading of the entire acts has disclosed no such enactment. The portions of them which have been stated and the entire laws when read and considered in their entirety have convinced us that they did not take away or diminish that liability or the plaintiffs' right of action to enforce it, but that the Legislature of Missouri intended to, and did thereby, preserve the liability of the county to the plaintiffs upon this contract, the liability of the persons and property in the drainage district to pay the necessary taxes to discharge that liability, and the power and duty of the county to levy, collect, and pay over to the plaintiffs such necessary taxes for that purpose.

Counsel for the county, however, insist that it has become exempt from liability on this contract and has exhausted its power to levy and collect assessments upon the property in the drainage district to pay the amount it owes the plaintiffs because it has already expended all the moneys, some $370,000, which it derived from the sale of the issue of bonds equal in amount to the aggregate of the assessments to pay for the ditch which it levied on the property of the drainage district before the work was done or the damages for taking of property were fixed. A deliberate consideration of the arguments and authorities in support of this position has failed to convince that it is tenable: (1) Because the county is not prohibited from making, but is in our opinion empowered by the statutes of Missouri to make, the assessments necessary to pay for the ditch whether the funds derived from the sale of the issue of bonds have been exhausted or not. Revised Statutes of Missouri 1909, Secs 5579-5583, 5596, 5598, 5599, 5603; State ex rel. v. Bates, 235 Mo. 262, 283, 284, 285, 286, 138 S.W. 482; State ex rel. v. Holt County...