City of Fergus Falls v. Fergus Falls Water Co.

• Decision Date: 02 January 1896
• Docket Number: 688.
• Citation: 72 F. 873
• Parties: CITY OF FERGUS FALLS v. FERGUS FALLS WATER CO.
• Court: U.S. Court of Appeals — Eighth Circuit

72 F. 873

CITY OF FERGUS FALLS v. FERGUS FALLS WATER CO.

No. 688.

United States Court of Appeals, Eighth Circuit.

January 2, 1896

In Error to the Circuit Court of the United States for the District of Minnesota.

1. FEDERAL COURTS-- JURISDICTION-- SUITS ARISING UNDER CONSTITUTION.

The F F. Water Company brought an action against the city of F. F. upon a contract. It alleged in its complaint that the city made a contract to pay to it certain water rents for supplying the city with water; that it had complied with the contract and furnished the water; that the city had paid the rents until its city council passed a resolution that the contract was annulled and canceled, and that it would pay no more rents thereunder; that from the date of the passage of that resolution the city had refused to pay the rents; and that the resolution was a law impairing the obligation of the contract. Held, that the latter allegation was mere surplusage, and did not make the action one arising under the constitution of the United States, within the jurisdiction of the federal courts. Sanborn, Circuit Judge, dissenting.

2. FEDERAL COURTS--

Held, second, that even if the averments of the complaint had brought the case within the jurisdiction of the court, the suit should have been dismissed when it appeared upon the trial, as it clearly did, that the suit did not arise under the constitution, and that no federal question was involved, but only the question whether the city had authority, under the laws of Minnesota, to enter into the contract in suit.

This action was commenced in the United States circuit court for the Sixth division of the district of Minnesota by the defendant in error, the Fergus Falls Water Company, a corporation chartered under the laws of the state of Minnesota, against the city of Fergus Falls, a municipal corporation of that state, to recover moneys alleged to be due upon a contract entered into between the city and the water company on the 19th day of April, 1883, whereby the water company agreed to supply the city with water for fire and other purposes for the term of 30 years, and the city, by an ordinance of its common council, agreed to pay therefor, for that term, the rates specified in the contract. The complaint sets out the contract which is the foundation of the action, and alleges, in the mode required by the rules of pleading, that the plaintiff has at all times furnished water to the city, and fully complied with the covenants of the contract on its part, and that the defendant refuses to pay the water rents due the plaintiff by the terms of the contract, and prays judgment for the amount claimed to be due. In addition to the statement of the plaintiff's cause of action, the complaint contains averments by which it is sought to make it appear that the action is one arising under the constitution of the United States, and therefore cognizable in the circuit court.

These allegations of the complaint are as follows: 'That on or about the 30th day of August, 1893, said defendant, by its council, duly passed a resolution wherein any whereby said defendant resolved and determined that 'the contract for water supply through fire hydrants, for fire protection, heretofore recognized as existing between' said plaintiff and defendant 'under the provisions of Ordinance No. 18 of said city, be and the same is hereby declared to be null and void and is hereby canceled.' And said defendant further determined in said resolution that said city would no longer take water from said plaintiff under the provisions of said ordinance; that since said time said defendant has refused to pay rent on said hydrants under said contract, or to recognize said contract as binding; that said resolution is a law impairing the obligation of said contract. ' The resolution of the council of the 30th of August, 1893, referred to in the foregoing extracts from the complaint, reads as follows: 'It is hereby resolved and determined that the contract for water supply through fire hydrants, for the protection, heretofore recognized as existing between the city of Fergus Falls and the Fergus Falls Water Company, under the provisions of Ordinance No. 18 of said city, be and the same is hereby declared to be null and void and is hereby canceled. And it is hereby determined that the city will no longer take water from the said water company under the provisions of said Ordinance No. 18. Adopted August 30, 1893. ' The defendant demurred to the complaint upon the ground that it did not appear from the allegations thereof that the circuit court had jurisdiction of the suit. The court overruled the demurrer, whereupon the defendant filed an answer, in which it 'denies that said defendant, by its charter (chapter 1, Sp. Laws Minn. 1883), or otherwise, was ever authorized to contract for a water supply for said city, and specially denies that said defendant, under said charter or otherwise, ever had the right, power, or authority to make or enter into the contract set out in said complaint, and under which plaintiff claims in this action, and denies that defendant ever entered into any contract with the plaintiff Carroll E. Gray, or any other person, for a water supply for said city. Defendant, further answering, admits that Ordinance 18, attached to said complaint, is a true copy of a pretended ordinance passed by the council of said city April 19, 1883, but denies that said council had any authority, right, or power whatever to pass or enact said ordinance, or to enter into the contract, or to grant the rights, powers, privileges, or franchises, set out in said pretended ordinance, and denies that said city council so passing said pretended ordinance had any authority to create against said city the debt or liability attempted to be created in and by said pretended ordinance. ' There was a trial to a jury, and a verdict and judgment for the plaintiff, and the defendant sued out this writ of error.

J. W. Mason (C. L. Hilton, M. D. Grover, and C. Wellington were with him on the brief), for plaintiff in error.

Frank W. Booth and Charles A. Willard, for defendant in error.

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

CALDWELL Circuit Judge (after stating the case as above), delivered the opinion of the court.

The defendant challenged the jurisdiction of the circuit court at every stage of the case, and that is the only question we find it necessary to consider. The jurisdiction is attempted to be maintained upon the ground that the case is one arising under the constitution of the United States. But clearly this is not so. The complaint shows the suit to be one to recover for water furnished by the plaintiff to the city under the contract set out in the complaint. In a word, it is a suit to recover for the breach of an alleged contract to pay for water. It does not differ in any respect from a suit to recover for water supplied to a private consumer. It is in no wise different from a suit brought by one individual or private corporation against another individual or private corporation to recover for fuel, merchandise, or other property alleged to have been sold and delivered by the one to the other under a contract to pay a stipulated price therefor. In all such cases the cause of action is not grounded on any right derived from the constitution of the United States, but arises out of the contract between the parties. The right to contract and the obligation of contracts antedate the constitution, and were not derived from it. An action, therefore, to recover upon the contract in suit, or to enforce its obligation, is not a suit arising under the constitution. But it is said that the complaint sets up that the defendant, by resolution of its council, declared the contract null and void, and that this resolution impairs the obligation of the contract, and is in contravention of the constitution of the United States. Conceding all this to be so, it does not serve to make the plaintiff's cause of action one arising under the constitution. Notwithstanding this averment, it is indisputable that the complaint shows the plaintiff's suit is based upon, and arises out of, the contract in suit, and not under the constitution. The plaintiff seeks, in its complaint, to inject a federal question into the case by suggesting that the defendant will interpose as a defense to the suit a resolution of its council which impaired the obligation of the contract, in contravention of the constitution. It is apparent that the only use the plaintiff proposes to make of the constitution is as a barrier to a defense which the plaintiff suggests the defendant may set up. The appeal to the constitution is made, not to support the plaintiff's cause of action, but by way of replication to an anticipated defense. The jurisdiction of the circuit court cannot be invoked by any such form of pleading in an action like this. In equity pleadings the complainant is allowed to anticipate and avoid a defense, and this is called the 'charging part of the bill.' Story, Eq. Pl. Sec. 31. But at law the plaintiff is never expected to state matters which should come more properly from the other side. It is sufficient for each party to make out his own case. 1 Chit.Pl. (Ed. 1867) 222. It is sufficient for the plaintiff to state his own cause of action, and he should not anticipate his adversary's defense, for the reason that the latter may never make the defense sought to be guarded against. Bliss, Code Pl. Sec. 200. In this case the defendant set up no such defense as the plaintiff pretended to anticipate and avoid. In Tennessee v. Union & Planters' Bank, 152 U.S. 454, 14 Sup.Ct. 654, the supreme court say that:

'By the settled law of this court, as appears from the decisions above

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