Denver-Greeley Valley Irr. Dist. v. McNeil

• Decision Date: 06 January 1936
• Docket Number: No. 1273,1274.,1273
• Citation: 80 F.2d 929
• Parties: DENVER-GREELEY VALLEY IRR. DIST. et al. v. McNEIL et al. McNEIL et al. v. DENVER-GREELEY VALLEY IRR. DIST. et al.
• Court: U.S. Court of Appeals — Tenth Circuit

80 F.2d 929 (1936)

DENVER-GREELEY VALLEY IRR. DIST. et al. v. McNEIL et al.

McNEIL et al. v. DENVER-GREELEY VALLEY IRR. DIST. et al.

Nos. 1273, 1274.

Circuit Court of Appeals, Tenth Circuit.

January 6, 1936.

John P. Akolt, of Denver, Colo. (Elmer L. Brock, E. R. Campbell, Milton Smith, and Karl F. Crass, all of Denver, Colo., on the brief), for appellants Denver-Greeley Valley Irr. Dist. and others.

Albert L. Vogl, of Denver, Colo. (Carle Whitehead and Frank A. Wachob, both of Denver, Colo., on the brief), for appellees McNeil and others.

Before LEWIS, McDERMOTT, and BRATTON, Circuit Judges.

BRATTON, Circuit Judge.

This is an action at law to recover judgment on bonds and interest coupons issued by the Denver-Greeley Valley irrigation district in Colorado. The district issued its serial bonds of $500 each, aggregating $2,000,000, dated April 5, 1909, maturing serially in the years 1920 to 1929, both inclusive, and bearing interest from date at the rate of 6 per cent. per annum; the interest being evidenced by attached coupons. Levies were duly made upon the lands within the district for the purpose of paying the principal of the bonds as it matured, and the money derived therefrom would have been sufficient in amount for that purpose if the taxes had been paid in full. Like levies were made to pay the interest for the years 1910, 1911, and 1912 and 1920 to 1929, both inclusive; and the money derived therefrom would have been enough for that purpose if the assessments had been paid in full. No levies were made for the purpose of paying the interest which accrued during the years 1913 to 1919, both inclusive. Due to failure of certain landowners to pay their assessments, there were outstanding and unpaid bonds in the sum of $124,- 029.09 on September 1, 1930, and the district had only $1,103.84 which was applicable to their payment. In consequence of the failure to levy assessments for the purpose of paying interest coupons which matured in the years 1913 to 1919, inclusive, and failure of certain owners of land to pay their assessments during other years, there were outstanding and unpaid interest coupons in the sum of $1,017,022.50 on September 1, 1930, of which $840,000 matured in the years 1913 to 1919, and the district had only $944.59 which properly could be used in payment of such interest.

Plaintiff sought recovery on two bonds and interest coupons in the sum of $8,691.50. Both bonds and all of the coupons, except one for $15, matured more than six years prior to the institution of the suit. Judgment was prayed for the amount of the bonds, with interest from maturity at the rate of 6 per cent. per annum, and for the amount of the interest coupons, with interest from their respective maturity dates at the rate of 8 per cent. per annum. Fay and Plouff intervened, seeking to recover upon four bonds and interest coupons in the sum of $2,021.20. Three of the bonds and all of the coupons except two in the sum of $25.30 fell due more than six years prior to the date on which the petition in intervention was filed. Interveners likewise prayed judgment for the amount of the bonds, with interest from their respective maturity dates at the rate of 6 per cent. per annum, and for the amount of the coupons, with interest from the respective dates on which they matured at the rate of 8 per cent. per annum. Defendant denied liability for interest after maturity and pleaded the six-year statute of limitations.

The trial court denied the plea of limitation, rendered judgment for the face amount of the bonds and coupons, but without interest after maturity, and provided that the judgment should be enforced only in accordance with the statutes and decisions of the state relating to irrigation districts. The district appealed from that part of the judgment awarding recovery for the face of the obligations, and plaintiff and interveners perfected a cross-appeal from that part which denied recovery for interest after maturity.

The first question presented is whether the district can assert the statute of limitations, which provides that an action for debt founded upon contract shall be commenced within six years after the cause of action accrued. Section 6392, C.L.1921. The bonds in question were issued under the provisions of chapter 113, Laws of Colorado 1905, as amended by chapter 194, Laws of 1907. The original act provides that they shall bear interest not to exceed 6 per cent. per annum, payable semiannually, and that such interest shall be evidenced by attached coupons. Section 15. The bonds and interest shall be paid by revenue derived from an annual assessment upon the real estate within the district. Section 17. The board of directors of the district is required to determine on or before the 1st of September in each year the amount of money necessary to meet the maintenance, operating, and current expense during the ensuing year and to certify the sum to the county commissioners of the county in which the office of the district is located. Section 18. Upon receiving from the assessor the returns for the total assessment of the district and with the described certificate from the district, the county commissioners fix the rate and make a levy necessary in amount to provide the sum required for maintenance, operating, and current expense and to pay the principal and interest of the bonds as it becomes due, plus 15 per cent. to cover delinquencies. Section 20. The county treasurer is made ex officio treasurer of the district. It is his duty to collect the taxes thus levied, place all money received on account of principal and interest of bonds issued by the district in a separate account, from which he shall pay the principal and interest as it becomes due. Section 21 (as amended by Laws 1907, p. 490, § 3).

The Supreme Court of Colorado has construed these provisions of the statute several times, and that construction is binding here. Marine National Exchange Bank v. Kalt-Zimmers Manufacturing Co., 293 U.S. 357, 55 S.Ct. 226, 79 L.Ed. 427; Terry v. Midwest Refining Co. (C.C.A.) 64 F.(2d) 428; Ætna Life...