Ransom v. City of Pierre, 1,305.

• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)
• Citation: 101 F. 665
• Decision Date: 16 April 1900
• Parties: Ransom v. CITY OF PIERRE.
• Docket Number: 1,305.

101 F. 665

Ransom
v.
CITY OF PIERRE.

No. 1,305.

United States Court of Appeals, Eighth Circuit.

April 16, 1900

[101 F. 666]

This case is before this court for decision upon the following facts and circumstances: The action is founded upon 500 coupons clipped from 100 bonds which were issued by the city of Pierre, S.D., on October 1, 1891, to refund its then outstanding indebtedness. One hundred of the coupons in suit matured October 1, 1896, April 1, 1897, and October 1, 1897, respectively. On September 28, 1896, James J. Ransom, the plaintiff in error, who was also the plaintiff below, began an action by mandamus in the circuit court for the Sixth judicial circuit of the state of South Dakota against Corwin D. Mead, as city treasurer of the city of Pierre, to compel him to apply the sum of $8,431.10, then in his hands as city treasurer, to the payment of those of the aforesaid coupons which matured October 1, 1895, and April 1, 1896, being those that were then overdue. This money in the treasurer's hands had been collected, as it seems, by taxation to pay said coupons. The treasurer, in his official capacity, pleaded to the information for the writ that the coupons which he was asked to pay were void for the reason that the bonds from which they had been detached had been issued by the city of Pierre without authority of law, at a time when its indebtedness exceeded the amount of indebtedness that it was authorized to contract under the constitution of the state, and that said coupons and the bonds from which they were detached were for that reason utterly void. There was a trial upon the issues so tendered in the mandamus proceeding, and a finding by the court that the coupons were illegal and void, as alleged, and a judgment that the mandamus proceedings be dismissed at the plaintiff's cost. From this judgment, rendered on June 29, 1897, Ransom, the plaintiff in error, perfected an appeal to the supreme court of South Dakota on September 24, 1897, giving a supersedeas bond. The suit at bar was commenced in the circuit court of the United States for the Southern division of the district of South Dakota on February 23, 1898, while the appeal in the before-mentioned suit was pending and undetermined. In its answer to the suit at bar the city of Pierre pleaded, among other defenses, the judgment theretofore rendered in favor of its city treasurer on June 27, 1887, by the circuit court for the Sixth judicial circuit of the state of South Dakota, as a bar to a recovery. This defense was sustained by the trial court, and a judgment was accordingly rendered dismissing the complaint. The plaintiff below thereupon removed the record to this court by a writ of error. When the [101 F. 667] trial in the case at bar took place, the mandamus proceeding above mentioned was still pending and undetermined in the supreme court of South Dakota, and it was so pending and undetermined when the case was argued in this court.

Robert W. Stewart (Henry R. Horner, on the brief), for plaintiff in error.

Ivan W. Goodner, for defendant in error.

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

THAYER, Circuit Judge, after stating the case as above, .

This cause having been decided below in favor of the defendant city on the ground that the judgment of the circuit court for the Sixth judicial circuit of the state of South Dakota in the mandamus suit brought by James J. Ransom, the present plaintiff in error, against Corwin D. Mead, the city treasurer of the city of Pierre, conclusively established that the coupons in suit were issued without authority of law, and were, therefore, void, the principal question that was discussed on the argument was whether the judgment of the state court in the mandamus suit could be pleaded and received in evidence in the present action as a former adjudication. It is true that counsel for the city endeavored to support the judgment below on the additional ground that the coupons in suit must be regarded as void irrespective of the former adjudication, because at the time the bonds were issued the city had already exceeded the limit of valid indebtedness; but the trial court overruled the latter contention, and its action in that respect was strictly in accordance with two decisions of this court where the various points urged by the city in support of the latter defense were fully considered and decided adversely to its contention. Board of Education of City of Huron v. National Life Ins. Co., 36 C.C.A. 278, 94 F. 324; City of Huron v. Second Ward Sav. Bank, 57 U.S.App. 593, 30 C.C.A. 38, 86 F. 272. We discover no reasons for altering in any respect the views heretofore expressed by this court in the cases last cited, and accordingly agree with the learned trial judge that but for the rendition of the judgment in the mandamus proceeding the plaintiff would have been entitled to a verdict for the full amount of the coupons in suit. Since this case was argued, and while it has been under advisement, the supreme court of South Dakota has decided the mandamus case against the city treasurer of the city of Pierre, and we have been furnished with a certified copy of its decision, which was promulgated on March 2, 1900, but is not as yet officially reported. Insurance Co. v. Mead, 82 N.W. 78. An examination of that decision, which contains a careful review of all the questions involved in the controversy between the city and the bondholder, shows that the supreme court of the state has decided the following propositions: First, that the city of Pierre, under its charter, did have the power to issue bonds for the purpose of funding its outstanding indebtedness, which appears to have been one of the mooted points in the mandamus suit; second, that, although the territorial limits of the city of Pierre and the school district embracing the city were coextensive, yet the debts of the latter cannot be added to those [101 F. 668] of the former for the purpose of ascertaining if the city indebtedness exceeded the legal limit,-- the two corporations, the city and the school district, being separate legal entities; third, that the bonds issued being for the sum of $150,000, and 5 per cent. of the assessed value of city property being $161,144.40, the bonds did not show on their face that the debt occasioned thereby would exceed the legal limit of city indebtedness; fourth, that the issuance of bonds for the purpose of taking up and retiring an outstanding indebtedness does not in the state of South Dakota create a new or additional debt, within the meaning of the statutory or constitutional inhibitions of that state against creating an indebtedness in excess of 5 per cent. of the assessed valuation of municipal property, and that this is true whether such bonds be exchanged directly for outstanding obligations, or whether the bonds be sold, and the proceeds used to retire such obligations; and, lastly, that upon the facts disclosed by the record before the supreme court of the state the bonds in controversy were valid obligations of the city. The...