Oakman v. City of Eveleth

• Decision Date: 24 April 1925
• Docket Number: No. 24672.,24672.
• Citation: 163 Minn. 100,203 N.W. 514
• Parties: OAKMAN v. CITY OF EVELETH et al.
• Court: Minnesota Supreme Court

203 N.W. 514

163 Minn. 100

OAKMAN v. CITY OF EVELETH et al.

No. 24672.

Supreme Court of Minnesota.

April 24, 1925.

Appeal from District Court, St. Louis County; Martin Hughes, Judge.

Suit by Theodore Oakman for mandamus to be directed to the City of Eveleth and others. After overruling defendants' demurrer to petition for alternative writ of mandamus, the court certified that questions presented were important and doubtful, and defendants appeal. Reversed.

J. McGilvery, of Eveleth, Boyle & Montague, of Virginia, John J. Fee, George H. Spear, and Fryberger, Fulton, Hoshour & Ziesmer, all of Duluth, for appellants.

Giblin & Manthey, of Eveleth, for respondent.

WILSON, C. J.

A petition, subscribed by the necessary number of electors in the city of Eveleth, proposed an ordinance asking that the same be passed or submitted forthwith to a vote of the people. The proposed ordinance provided for a compromise of certain claims of the city against nine former city officials and their sureties. Such claims are now involved in three actions, brought by a taxpayer, for the benefit of the city, and are now pending in this court, and involve about $135,000. The ordinance is to authorize a full satisfaction and discharge upon payment of $15,000. The city council did not pass the ordinance. It did not submit it to a vote of the people, although 25 days elapsed.

An alternative writ of mandamus was issued by the district court, upon relation of a taxpayer, requiring the council to proceed to call a special election for a vote of the people upon such ordinance, or show cause why they had not done so. Defendants demurred to the petition and writ on the ground that the facts therein stated did not constitute a cause of action. The trial court overruled the demurrer, but certified that the questions presented were important and doubtful. Defendants have appealed.

1. Mandamus will not be granted where it would not avail anything. Dunnell's Digest, § 5759. It is said that this proposed ordinance is invalid, and that therefore the writ should not issue; and it is claimed that, if the ordinance is passed, it will bind the city only, and that by its terms its availability is optional to the defendants. We will assume that the petition is made in good faith and that the petitioners have sufficient reason to know that the settlement would be made if the city would join therein. At least we cannot assume, on demurrer, that the initiative movement is seeking a result that would be futile.

2. The actions are being prosecuted by a taxpayer. The city failed to act. The appellant now questions the right of the city to step in and settle the matter involved in the taxpayer's lawsuits. The determination in such actions binds other taxpayers the same as it binds the plaintiff therein. Driscoll et al. v. Board of Co. Com. (Minn.) 201 N. W. 945, filed Jan. 23, 1925, and cases cited. No other taxpayer could interfere by commencing another suit in the same cause of action. Note 49, L. R. A. (N. S.) 108. Neither can the city come in and successfully ask to have the action dismissed. State ex rel. Morrison v. City of Muskogee, 70 Okl. 19, 172 P. 796. We think, however, that, where a city in good faith desires to compromise and settle pending litigation, and may do so, the paramount public welfare demands that such settlement may not be hindered or thwarted by a single taxpayer, even though he be courageous in the cause of public justice. The responsibility for action or nonaction in such matter must rest upon the public officials. If their action is not taken in good faith, the plaintiff will have a remedy.

3. The power or authority of a municipality to settle and compromise pending litigation is challenged. Section 1, chapter 1, of the charter of Eveleth authorizes the city to sue and be sued. It would be a reflection upon justice to say that a city could sue and be sued, but that it must always carry the litigation to final judgment. The power to compromise grows out of and is incident to the power to sue and be sued. This power embraces the power to finish litigation, decide how far it shall be carried, and when and in what manner it may end. The litigation here involved includes one appeal to this court from a judgment in favor of the city and two other actions where the trial court has overruled demurrers to the complaints but certified the questions as doubtful. It needs no authority to support the assertion that these three suits are now pending in this court. The fact that judgment was entered in the lower court from which an appeal has been taken does not exclude them from the field of pending litigation. McQuillin on Munic. Corp. vol. 5, § 2479; Mills County v. R. R., 47 Iowa, 66; 107 U. S. 557, 2 S. Ct. 654, 27 L. Ed. 578. Litigation is pending in the lower court after judgment is entered until time for appeal has expired when its correctness is not conceded. Agnew v. Brall, 124 Ill. 312, 16 N. E. 230. Pending litigation is a proper subject of compromise by a municipality. It may be compromised at any time before final judgment has been entered. There are many authorities so holding. McQuillin on Municipal Corps. vol. 5, § 2479; note 19 L. R. A. (N. S.) 320; Farnham v. City of Lincoln, 75 Neb. 502, 106 N. W. 666; Agnew v. Brall, 124 Ill. 312, 16 N. E. 230; Orleans County v. Bowen, 4 Lans. (N. Y.) 24; Mills County v. R. R., 47 Iowa, 66; 107 U. S. 557, 2 S. Ct. 654, 27 L. Ed. 578; Clough v. Verrette, 79 N. H. 356, 109 A. 78; Smith v. Wilkinsburg, 172 Pa. 121, 33 A. 371; City of San Antonio v. St. Ry. Co., 22 Tex. Civ. App. 148, 54 S. W. 281; Washburn County v. Thompson, 99 Wis. 585, 75 N. W. 309; People v. Board of Supervisors, 27 Cal. 655; New Orleans v. R. R. Co., 109 U. S. 221, 3 S. Ct. 144, 27 L. Ed. 916; Hine v. Stephens, 33 Conn. 497, 89 Am. Dec. 217; Logansport v. Dykeman, 116 Ind. 15, 17 N. E. 587; McKennie v. Charlottesville, 110 Va. 70, 65 S. E. 503, 18 Ann. Cas. 1027; State v. Davis, 11 S. D. 111, 75 N. W. 897, 74 Am. St. Rep. 780; Petersburg v. Mappin, 14 Ill. 193, 56 Am. Dec. 501; Gering v. School Dist., 76 Neb. 219, 107 N. W. 250; R. R. Co. v. Anthony, 73 Mo. 431; Multnomah County v. Dekum, 51 Or. 83, 93 P. 821, 16 Ann. Cas. 933; Paret v. Bayonne, 39 N. J. Law, 559; Springfield v. Walker, 42 Ohio St. 543; Labette v. Elliott, 27 Kan. 606; Wells v. Putnam, 169 Mass. 226, 47 N. E. 1005; Buffalo v. Bettinger, 76 N. Y. 393; Dillon on Municipal Corps. § 821; Abbott on Municipal Corps. vol. 2, § 1160; Tiedeman on Municipal Corps. § 142; Beach on Public Corps., vol. 1, § 638; 28 Cyc. 1756.

Where a claim has been reduced to final judgment, and the debtor has sufficient assets so that it may be collected, the municipality has no power to compromise the judgment claim. To do that would be giving away the property of the taxpayers and this is beyond the powers of the municipality—if the municipal officers wish to do charity, they must use their own money. They cannot accept less than the full amount in discharge of such judgment because all controversies have been put to rest and there is no longer anything to compromise. McQuillin on Municipal Corps. vol. 5, § 2479; People v. Parker, 231 Ill. 478, 83 N. E. 282; People v. Holten, 287 Ill. 225, 122 N. E. 540; Standart v. Burtis, 46 Hun (N. Y.) 82; Farnsworth v. Wilbur, 49 Wash. 416, 95 P. 642, 19 L. R. A. (N. S.) 320; Butternut v. O'Malley, 50 Wis. 329, 7 N. W. 246; Township of Otsego Lake v. Kirsten, 72 Mich. 1, 40 N. W. 26, 16 Am. St. Rep. 524.

However, after the entry of final judgment municipal corporations have the power to compromise and accept less than the full amount of the judgment where the debtor is not able to pay the full amount and the municipality is not able to enforce full payment. Collins v. Welch, 58 Iowa, 72, 12 N. W. 121, 43 Am. Rep. 111; Hagler v. Kelly, 14 N. D. 218, 103 N. W. 629; Washburn County v. Thompson, 99 Wis. 585, 75 N. W. 309; McQuillin on Municipal Corps. vol. 5, § 2479. All compromises and settlements made by municipalities must rest in good faith. All the ordinary rules of business conduct by which prudent persons are governed are applicable to public municipalities in the settlement, adjustment, and compromise of their affairs under similar circumstances. We see no reason that should preclude a municipality from having authority to compromise its litigation either before or after judgment under the limitations stated.

4. The city of Eveleth has a home rule charter. Chapter 8 thereof specifies the powers of the city and of the council. Section 70 thereof includes seven subdivisions and specifies the general powers of the city. Section 71 thereof reads:

"The qualified voters of the city shall have the power, through the initiative and otherwise, as provided by this charter, to enact appropriate legislation, to carry out and enforce any of the above general powers of the city, or any of the specified powers of the council."

Then the specified powers of the council are stated in section 72 thereof, embracing 77 subdivisions, and subdivision 77 reads:

"To enact appropriate legislation and to do and perform any and all acts and things which may be necessary and proper to carry out the general powers of the city, or any of the provisions of this charter, and to exercise all powers not in conflict with the Constitution of the state, with this charter, or with the ordinances adopted by the people of the city; and the above enumeration of specific powers shall not be held in any way to curtail or restrict any power which the council might otherwise have under the common law."

Chapter 12 of the charter provides for the initiative, and subdivision 3 provides that, where the petition is signed by the requisite number of electors, the council shall either pass the ordinance within 20 days or within 25 days proceed to call a special election, at which the ordinance shall be submitted to a vote of the people.

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