Lumbermen's Trust Co. v. Town of Ryegate

• Decision Date: 15 August 1932
• Docket Number: No. 6564.,6564.
• Citation: 61 F.2d 14
• Parties: LUMBERMEN'S TRUST CO. v. TOWN OF RYEGATE.
• Court: U.S. Court of Appeals — Ninth Circuit

61 F.2d 14 (1932)

LUMBERMEN'S TRUST CO. v. TOWN OF RYEGATE.^*

No. 6564.

Circuit Court of Appeals, Ninth Circuit.

August 15, 1932.

Samuel V. Stewart, John G. Brown, and Stewart & Brown, all of Helena, Mont., and Geo. B. Guthrie and Wilson & Reilly, all of Portland, Or., for appellant.

W. M. Johnston, H. J. Coleman, W. J. Jameson, Jr., and Johnston, Coleman & Jameson, all of Billings, Mont., for appellee.

Before WILBUR and SAWTELLE, Circuit Judges, and ST. SURE, District Judge.

WILBUR, Circuit Judge.

The Security Bridge Company entered into a contract with the town of Ryegate, Mont., the appellee, for the construction of a waterworks system in said town, and agreed to accept, and did accept, in part payment therefor, bonds of special improvement district No. 4 of the town of Ryegate, Mont., of the par value of $45,602.42. These bonds were purchased by the appellant. The bonds not having been paid when due, appellant brought this action alleging such nonpayment and refusal on the part of the appellant to pay the same, and prayed judgment for the par value of the bonds with interest at 6 per cent. as therein provided. The appellee states that the action is one for money had and received, and there are allegations in the complaint tending to substantiate this view. The trial court defined the action as one in assumpsit "on an implied contract for the balance due on the construction of a water supply system." There are allegations in the complaint which tend to substantiate this view. The appellant, on the other hand, claims that it is entitled to judgment upon any one of several theories. It also contends that on this appeal the action should be dealt with as one in equity, and that upon the facts the judgment in favor of the city should be reversed and a judgment ordered for the whole or part of the amount for which suit was brought in accordance with such theory of the law and the facts as may be adopted by this court. Montana has adopted the system of code pleading abolishing common-law forms of action, Rev. Codes Mont. 1921, § 9126; Daniels v. Andes Ins. Co., 2 Mont. 79; and a plaintiff is entitled to such relief as the law affords upon the facts stated in his complaint, Rev. Codes Mont. 1921, §§ 9125, 9126, 9129; Daniels v. Andes Ins. Co., supra; Higgins v. Germaine, 1 Mont. 230; Pomeroy's Code Remedies (5th Ed.) §§ 327, 347.

The case was tried by the court without a jury in accordance with written stipulation. The issues were framed by the complaint, answer, and reply. Many of the allegations in the pleadings were admitted. The parties entered into and filed at the trial a stipulation of the facts but expressly reserved the right to introduce evidence on all issues not covered by the stipulation and did in fact offer evidence set forth in the bill of exceptions comprising about 100 pages of the transcript. As the power of this court on appeal to review the facts depends upon whether or not the appeal is from a judgment at law or a decree in equity, we cannot at this juncture state the facts as admitted and agreed and as disclosed by the evidence without confusing the questions properly before us for determination upon the record.

At the outset we may state that the action is clearly one at law and that our powers on appeal are those powers of review applicable to an action at law. In an action at law where the parties waive a jury the power of this court to review or consider the facts on appeal is extremely limited. Where there is an agreed set of facts, the power is more ample. We therefore approach the questions involved on this appeal from the standpoint of the complaint and the issues framed thereon, and in so doing will state them as briefly as possible.

The complaint alleges that December 30, 1919, the town counsel of the appellee passed a resolution of intention to create special improvement district No. 4; that notice thereof was published; that on February 11, 1920, a resolution was passed creating the district and ordering work described in the resolution of intention to be done; that the purpose of these resolutions was to install in the town a complete system of waterworks; that the Security Bridge Company bid for the construction of the waterworks system and entered into a written contract to perform said work; that it was intended and contemplated by the appellee that it should issue negotiable evidence of the debt in the form of special improvement district bonds to pay for the construction of said waterworks system; that thereafter bonds in the form provided by law (Rev. Codes Mont. 1921, § 5249) were issued and acquired by the plaintiff; and that defendant paid the interest maturing January 1, 1922, but refused to pay any further interest and declared its intention of never paying the principal sum and repudiated said debt. These allegations, it will be observed, are consistent with the theory now advanced by the appellant that the action is a suit upon the bond for the reason that in a federal court the appropriate method of enforcing the obligation of the bond in the absence of power to entertain an original proceeding in mandamus to compel the officers to perform their duty to levy taxes is a suit against the municipality for a judgment to be thereafter followed by appropriate process to compel the assessment and levy of taxes upon the property within the municipality liable for the tax. County of Cass v. Johnston, 95 U. S. 360, 24 L. Ed. 416, citing with approval Jordan v. Cass County, 3 Dill. 185, Fed. Cas. No. 7517; Davenport v. County of Dodge, 105 U. S. 237, 26 L. Ed. 1018; Mather v. City and County of San Francisco (C. C. A.) 115 F. 37. There is no specific allegation in the complaint that the bonds are either valid or invalid, and in view of the fact that such an allegation would be an allegation of a conclusion of law none was needed. The other allegations of the complaint, however, tend to confirm the view of the appellee that the action was intended to be an action for money had and received. In order to show privity between the appellant and the appellee it is alleged that the scheme was a municipal project to secure a complete water system for the town; that the Security Bridge Company, the contractor, was unable to finance the project without the sale of its bonds to pay for labor and material; that this was known to the town; that negotiations for the sale of bonds by the Security Bridge Company to the appellant were carried on with the knowledge of the town; that the officers of the town importuned the Security Bridge Company to accept said special improvement district bonds; that appellant as holder of the bonds "became possessed of all the rights, privileges and claims which the Security Bridge Company might have or hold or be entitled to under and by virtue of its contract with the defendant town and its faithful performance of the contract." Bonds were issued from time to time during the progress of the work for the portion of the work completed and accepted, and that the appellant by purchasing said bonds "did thus furnish all of the money that was used to build and furnish to the defendant town and its inhabitants the waterworks plant" in question. It is also alleged that the waterworks system was constructed, received, accepted, and has been and is now being used by the defendant town and its inhabitants and that they are receiving the income and benefits thus derived from "moneys of this plaintiff had and received and used by said defendant town and its officers for such public purposes, all of which moneys so had and used being evidenced by said bonds hereinbefore referred to."

Assuming for the moment, without deciding, that the appellant stands in the shoes of the contractor, its allegations in support of the claim for money had and received must be predicated upon the theory that the bonds are invalid and that therefore the money paid by the appellant to the town through the contractor was without consideration. The allegations, whereby appellant seeks to stand in the shoes of the contractor and to recover from the town for work and labor done by the contractor under his contract, must also be predicated upon the theory that the bonds paid to the contractor and received by him in full satisfaction for the work done, are invalid, and that therefore the town is liable for the value of the unpaid work and labor performed by the contractor. Appellant, however, vigorously contends on this appeal that the bonds are valid, and if not valid obligations for the entire amount they are at least valid obligations for the amount paid by the appellant to the contractor therefor, to wit, $38,762.04, and if not for this full amount for a lesser amount hereinafter more specifically considered. The appellee contends that the position of the appellant is a complete reversal of its attitude and theory in the court below and that the case cannot properly be considered upon appeal on a new theory. These contentions we will consider hereafter.

The first obstacle raised to a consideration of the facts by this court is based upon the proposition that although most of the facts were stipulated by the parties there was no motion by appellant for a judgment and no request for a ruling upon a principle of law, and consequently that the facts cannot be reviewed on this appeal. This position is well taken, were it not for the fact that an agreed set of facts somewhat changes the power and duty of the appellate court. That power and duty has been lately reviewed and stated in an opinion by District Judge Pollock speaking for the Circuit Court of Appeals of the Tenth Circuit, Kansas City Life Ins. Co. v. Shirk, 50 F.(2d) 1046, in which the authorities are collated and reviewed. See, also, Fleischmann Const. Co. v. U. S., 270 U. S. 349, 46 S. Ct. 284, 70 L. Ed. 624. Suffice it to say that where the agreed facts are the ultimate facts as distinguished from merely evidentiary facts,...