Carnegie Nat. Bank v. City of Wolf Point

Decision Date14 May 1940
Docket NumberNo. 9248.,9248.
Citation110 F.2d 569
CourtU.S. Court of Appeals — Ninth Circuit

Arlie M. Foor, of Wolf Point, Mont., and Robert N. Erskine, of Chicago, Ill., for appellants.

Frank M. Catlin, of Wolf Point, Mont., and H. C. Hall and Edw. C. Alexander, both of Great Falls, Mont., for appellee City of Wolf Point.

Before GARRECHT, STEPHENS, and HEALY, Circuit Judges.

GARRECHT, Circuit Judge.

The question involved in this case is whether the District Court abused its discretion in dismissing the case for want of prosecution. Welch v. Ruggles-Coles Eng. Co., 2 Cir., 19 F.2d 288, 289; Carnegie Steel Co. v. Colorado Fuel & Iron Co., 8 Cir., 14 F.2d 1, 4; Facer Forged Steel C. W. & L. W. Co. v. Carnegie Steel Co., 3 Cir., 295 F. 134, 135. Orderly disposition of the appeal requires that we outline, as briefly as possible, the events leading up to this order of the court below.

On or about March 10, 1919, the city council of the City of Wolf Point, Montana, authorized and confirmed the issuance of bonds in the amount of $37,966.53, for the purpose of making certain improvements within an area designated as Special Improvement District No. 12, comprising 400 lots within said city. Said bonds were issued by the City of Wolf Point, numbered 1 to 75, inclusive, of the face amount of $500 each, bearing interest at the rate of 6% per annum, maturing January 1, 1929. The same resolution levied a special assessment against all property lying within the boundaries of said district in the sum of $37,966.53, and each lot therein bore a certain fixed amount of the total sum; the sums so assessed against each lot or parcel were divided into ten equal installments, with interest at the rate of 6% per annum until paid; the installments and interest were designated as an assessment fund irrevocably pledged to and for the payment of the bonds. Bonds numbered 1 to 25, inclusive, were issued and dated October 9, 1918; bonds numbered 26 to 54, inclusive, November 20, 1918; and bonds numbered 55 to 75, inclusive, May 26, 1919. All of the said bonds matured January 1, 1929, and all of them have been paid except bonds numbered 42 to 75, inclusive, amounting to the total sum of $17,000. On May 24, 1929, bonds numbered 42 to 49, inclusive, were called for payment; on July 13, 1929, bonds numbered 50 to 52, inclusive, were called for payment; and on January 18, 1930, bond No. 53 was called for payment. The bonds numbered 42 to 53, inclusive, although called, were not paid because interest after maturity was demanded.

Between November 30, 1921, and May 31, 1922, there were diverted by the city sums of money belonging to the District, and placed in other funds, the total of which amounted to $3,729.54. This money was returned to the fund May 6, 1929.

Some of the installments on the individual assessments were not paid and the installments became delinquent. Many of the lots upon which the assessments had become delinquent were taken over by the county under tax deed, and of these, some were sold; from these facts the master, taking into consideration, also, the status of the delinquent parcels upon which tax deed had not issued, found that there would not be realized a sufficient sum to ever discharge the bonds outstanding in full.

On May 22, 1930, the Hanchett Bond Company brought suit against the City of Wolf Point, Montana, alleging the jurisdictional facts; that it was the owner of bonds numbered 45 to 58, inclusive, and No. 75, of the issue described above; and that certain bonds had not been paid. In addition, it alleged the names of the holders of the remaining bonds outstanding. The plaintiff asked that an accounting be had of all the moneys collected by the defendant City for Improvement District No. 12; that payment of the bonds by the City of Wolf Point be decreed; that the defendant City be compelled to pay into the assessment fund all money due and owing thereto; that the rights of the bondholders be determined; and for other and further relief. The other bondholders were listed in the complaint as defendants. The City of Wolf Point, Montana, filed a separate answer which alleged that it had received $48,873.15 for application towards the payment of the bonds and interest, and admitted that there remained on hand the sum of $6,273.34. The answer also admitted uncollected and delinquent assessments amounting to $7,890.08. The other defendants, with the exception of one D. W. Schreiber, filed a joint answer. A default judgment apparently was entered against Schreiber, which was later vacated upon motion of Minnie Luebbe, the successor in interest. All parties, except the City of Wolf Point, stood in virtually the same position, save that they differed as to the order in which the bonds were payable.

The matter was submitted to a special master, who took testimony, made a report, findings of fact, conclusions of law, and recommendations. The master recommended that the court find the ownership of the outstanding bonds and the amounts owing to each of the owners, and listed these names and numbers; that interest at the rate of 8% per annum from January 1, 1929, be paid the owners of the outstanding bonds on the face amount held by them; that moneys received by the City of Wolf Point belonging to the improvement district be prorated among the bondholders; that a judgment against the City be granted in the sum of $11,032.24, which the City had on hand, and the money prorated; that the court grant the bondholders judgment for interest on certain sums illegally removed from the District No. 12 fund, from date of withdrawal to date of repayment to said fund; that if any part of the judgment remain unpaid and the City collect or receive sums of money belonging to said district which should be applied to the payment thereof, and fail or refuse so to do, an order to show cause may be issued upon petition of a judgment creditor or creditors. On January 10, 1933, the present appellant, Carnegie National Bank, was substituted in the place and stead of the original plaintiff, Hanchett Bond Company.

May 2, 1933, District Judge Pray filed a memorandum opinion substantially adopting the report of the special master, D.C., 4 F.Supp. 385. The master had recommended that interest on the unpaid bonds be computed at the rate of 8% per annum from January 1, 1929, but the court's decision held that the bonds bore the interest rate of 6% per annum from the date thereof, whether before or after maturity, and that the City of Wolf Point could not stop the running of that interest by the expedient of calling the bonds and refusing payment.

The next entry in the record is under date of January 10, 1939, when District Judge Baldwin entered an order requiring the parties to show cause why the action should not be dismissed, and fixing January 21, 1939, as the return day. On this latter date counsel for the bondholders presented an answer to the order to show cause and objections to dismissal of the case, obtained leave to submit proposed findings of fact and conclusions of law, and the matter was taken under advisement by Judge Baldwin. The proposed findings and conclusions were lodged in the clerk's office February 10, 1939, and on the same day the said District Judge filed an order of dismissal for want of prosecution. Both Carnegie National Bank, the plaintiff, and Hazel Graham Glessner, as executrix of the estate of James G. Glessner, a nominal defendant, appeal from that order. They join in designating the record on appeal and the Statement of Points relied upon, and, on stipulation, the appeals were consolidated for briefing and hearing. We have treated the appeals as a single case.

Section 9317, Revised Codes of Montana, provides:

"An action may be dismissed or a judgment of nonsuit entered in the following cases:

* * * * *

"6. By the court, when, after verdict or final submission, the party entitled to judgment neglects to demand and have the same entered for more than six months; * * *."

The cases under this subdivision of the section seem to hold that the word "may" in the first clause of the section is mandatory in a case which falls squarely within its terms (State ex rel. Stiefel v. District Court, 37 Mont. 298, 304, 96 P. 337; Kasun v. Todevich, 71 Mont. 315, 321, 229 P. 714), but that if the judgment is entered before the motion, the judgment is valid. It is further held that the word "neglects" does not mean merely "fai...

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