National Foundry & Pipe Works v. Oconto City Water Supply Co.

Decision Date01 February 1902
Docket Number673.
Citation113 F. 793
CourtU.S. Court of Appeals — Seventh Circuit

George H. Noyes, for appellant.

George G. Green and W. H. Webster, for appellees.

Before WOODS and GROSSCUP, Circuit Judges, and BUNN, District Judge.

BUNN District Judge.

This is a suit in equity to compel redemption of a waterworks plant in the city Of oconto, Wis., from sale under several mortgages foreclosed in the state court by the appellees Andrews & Whitcomb, purchased and bid in by them upon sale under the foreclosure for some $64,000, moneys loaned and advanced by them and used in the erection and construction of the plant, and afterwards sold by Andrews & Whitcomb to the appellee, the Oconto City Water Supply Company, and since owned, occupied, and operated by said company. The subject has been in litigation for several years both in this court and the state courts, and the matters involved in this suit if not stare decisis or res adjudicata, in view of the decisions already made in the state and federal courts, there is in the judgment of the court, upon a careful study of these cases and of the record, but little ground for the appellant to stand upon. Almost any person or party less heroic in contested and stubborn litigation, and not so skilled in shifting attitudes and raising new points, would have been reasonably satisfied, in view of the decision of this court in a former suit involving the same subject and title, and reported as Andrews v. Pipe Works, 22 C.C.A. 110, 76 F. 166, 46 U.S.App. 281; City of Oconto v National Foundry & Pipe Works, Id.; Chapman Valve Mfg. Co. v. Oconto Water Co., 89 Wis. 264, 60 N.W 1004, 46 Am.St.Rep. 830; and National Foundry & Pipe Works v. Oconto City Water Supply Co., 105 Wis. 48, 81 N.W. 125,-- to have given up the struggle without further effort at litigation. The opinion of the district judge who heard this case, which is printed in the record, seems to be entirely satisfactory, and places the decision dismissing the bill upon solid ground. The facts are not fully stated in that opinion, but they have been so many times stated in the cases referred to, both in the state and federal courts, and the history of the litigation so fully given, that it seems almost a needless labor to go over the work again. But perhaps a brief statement will be prudent, if not necessary to the proper understanding of the questions involved.

The foundation of the appellant's claim against the property in the various forms in which it has been successively made is the furnishing to the Oconto Water Company, a corporation organized to construct a system of waterworks in the city of Oconto, a quantity of pipe sold to the water company between September 8 and November 24, 1890, amounting to the sum of $25,637.32, and used by that company in the construction of the plant. On September 13, 1890, the water company mortgaged its plant and franchises to Andrews & Whitcomb, citizens of Maine, who advanced and loaned to the company money to the amount of $64,000, and which was used in the construction of the plant. On January 30, 1891, the appellant began suit in the court below against the Oconto Water Company, to enforce a mechanic's lien on the company's water plant, and on October 3, 1892, obtained a decree for such lien in the sum of $24,250.04. It also obtained a judgment at law in the same court for the amount of its claim. On June 17, 1891, Andrews & Whitcomb commenced an action in the state court to enforce their mortgages, and obtained a judgment of foreclosure and sale in due form of law on August 13, 1891; and under this judgment a sale of the property and franchises was made to the mortgagees, Andrews & Whitcomb, which sale was duly confirmed by the court, and a deed and conveyance of the plant and franchises and all the property appurtenant thereto or connected therewith was made to Andrews & Whitcomb. After the title was thus vested in Andrews & Whitcomb, on July 12, 1892, they transferred the property to the Oconto Water Supply Company, a corporation organized for the purpose of purchasing the same and operating the plant to supply the city and the citizens thereof with water. On july 11, 1892, appellant commenced a creditors' suit in the United States circuit court for the Eastern district of Wisconsin supplemental to and in aid of its judgment at law, one of the purposes of which was to obtain a decree of priority of its lien claim upon the plant and property over the title of Andrews & Whitcomb under the mortgage foreclosure proceedings and deed of conveyance. In this action the rights of the parties to that suit, including the right of the appellant to a lien under the mechanic's lien laws of Wisconsin, as against Andrews & Whitcomb, were presented for adjudication. The claim on the part of Andrews & Whitcomb was that they were not bound by the lien judgment, because not made parties to the suit to enforce it, and that the waterworks were not subject to the laws of Wisconsin respecting mechanics' and material men's liens. On the part of the Appellant, the National Foundry & Pipe Works, the validity of the mortgages under which Andrews & Whitcomb claimed title was attacked, and it was claimed that its lien was a first claim against the water company's property, and should be so adjudged. The decree of the circuit court gave the appellant all it asked, and made its claim a first lien, and ordered a sale of the plant and franchises of the water company to satisfy the lien. The case was appealed to this court. Before a hearing could be had here, however, the supreme court of Wisconsin, in Chapman Valve Mfg. Co. v. Oconto Water Co., 89 Wis. 264, 60 N.W. 1004, 46 Am.St.Rep. 830, had, upon full consideration, decided that a water plant provided by a city, by contract with a private corporation, for the protection and convenience of its citizens, is not, under the laws of Wisconsin, subject to lien claims under chapter 143, Rev. St. 1878. The circuit court had entered a decree in the suit sustaining the lien judgment, and adjudging that it was binding upon Andrews & Whitcomb as privies of the water company; the theory being based on the fact that they were owners of the stock of the water company when the indebtedness accrued for which the lien was claimed. This decree as to Andrews & Whitcomb was reversed by this court, and the bill dismissed. See 22 C.C.A. 110, 76 F. 166, 46 U.S.App. 284. The issues in that case were much broader than in the case at bar,-- broad enough, probably to have included the issue made here upon the right of the appellant to redeem from the sale under the mortgage foreclosure, if such a claim had been made and such relief asked for. But in that case appellant did not ask to redeem as though it were a junior incumbrancer, but asked for a decree adjudging the title and right of the property to be in the appellant, without money and without price, unless its claim was paid. The contention was that its rights in the property were superior and paramount to those of Andrews & Whitcomb. This issue was adjudged against the appellant; this court holding that under the decisions of the state court the appellant never had any lien upon the property, and that the judgment adjudging a lien was erroneous, although it was res adjudicata as to the parties to that suit, in which the lien was adjudged. In that opinion this court, by Woods, circuit Judge, says.

'The question of primary importance, it is evident, is whether the liens decreed in favor of the complainant and one of the interveners were authorized by the provisions of section 3314, Sanb. & B. Ann. St. Wis. As between two of the parties to the record, the question has been decided by this court in the affirmative. Oconto Water Co. v. National Foundry &amp Pipe Works, 7 C.C.A. 603, 59 F. 19, 18 U.S.App. 380. But in another and later case, in which the Chapman Valve Company, also a party to this appeal, was the complainant, the supreme court of Wisconsin, in a carefully considered opinion, affirmed the contrary ruling of the circuit court for Oconto county. Chapman Valve Mfg. Co. v. Oconto Water Co., 89 Wis. 264, 274, 60 N.W. 1004, 46 Am.St.Rep. 830. The ruling of this court was based upon the opinion delivered in the circuit court by Judge Jenkins, who, it will be observed, deduced his conclusion from the analogies of previous decisions of the supreme court of Wisconsin, none of which involved the precise question. That opinion and its affirmance by this court are referred to in the later opinion of the Wisconsin court, which declared itself 'constrained to a different judgment by the force of its former decisions and by the logic of the situation,' and added that the view taken was deemed to be 'in accord with the weight of authority and the better reason.' That decision, being the first direct ruling of the supreme court of the state upon the exact question under consideration, must be regarded as establishing a construction of the statute which the federal courts will follow without further inquiry. Burgess v. Seligman, 107 U.S. 20, 2 Sup.Ct. 10, 27 L.Ed. 359; Stutsman Co. v. Wallace, 142 U.S. 293, 12 Sup.Ct. 227, 35 L.Ed. 1018; Bauserman v. Blunt, 147 U.S. 647, 13 Sup.Ct. 466, 37 L.Ed. 316; Lowndes v. Town of Huntington, 153 U.S. 1, 14 Sup.Ct. 758, 38 L.Ed. 615; Roberts v. Lewis, 153 U.S. 367, 14 Sup.Ct. 945, 38 L.Ed. 747; Folsom v. Ninety-Six Tp., 159 U.S. 611, 16 Sup.Ct. 174, 40 L.Ed. 278; Balkam v. Iron Co., 154 U.S. 177, 14 Sup.Ct. 1010, 38 L.Ed. 953. In Forsyth v. City of Hammond, 18 C.C.A. 175, 71 F. 443, 34 U.S.App. 552, to which reference has been made, this court declined to follow the latest ruling of the supreme court of the state from which ...

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