Woods Bros. Const. Co. v. Yankton County, SD

Decision Date21 November 1931
Docket NumberNo. 9160.,9160.
Citation54 F.2d 304,81 ALR 300
PartiesWOODS BROS. CONST. CO., Inc., v. YANKTON COUNTY, S. D., et al.
CourtU.S. Court of Appeals — Eighth Circuit

John J. Hess, of Council Bluffs, Iowa (E. E. Wagner and Florence Ryan Foss, both of Mitchell, S. D., on the brief), for appellant.

Eldon W. Clark, of Yankton, S. D. (Lee H. Cope, of Yankton, S. D., on the brief), for appellees.

Before KENYON and GARDNER, Circuit Judges, and REEVES, District Judge.

KENYON, Circuit Judge.

This is an appeal from an order of the United States District Court of South Dakota of December 8, 1930, vacating a judgment entered in said court March 22, 1929, in favor of appellant in the sum of $23,700 in an action brought by appellant against appellees to recover compensation for certain work in a bank protection project along the Missouri river in Yankton county, S.D. The contract under which the work was done and the liability to appellant incurred was entered into between appellant and the board of county commissioners of Yankton county, S.D., said commission proceeding by virtue of chapter 193, Laws of 1921, which enlarged and amended section 8458 of the Revised Code of South Dakota of 1919 relating to drainage districts by making the same applicable to river protection afforded by dikes, retards, etc. The vacated judgment was a compromise one entered at the trial upon an agreed statement of facts, which was adopted by the court. In compliance with the judgment the board was proceeding to arrange a time for hearings on equalization benefits under the state statutes when the Supreme Court of South Dakota on May 7, 1929, in another, though similar, action held that chapter 193, Laws of 1921, was unconstitutional because the title of said act did not conform to article 3, section 21, of the State Constitution, which provided that no law should embrace more than one subject which must be expressed in its title. Woods Bros. Const. Co. v. Board of Com'rs, 55 S. D. 161, 225 N.W. 228, 230.

The reason the Supreme Court held chapter 193 of the Laws of 1921 unconstitutional was not because of lack of power in the Legislature to pass such an act, but because of the violation of the constitutional provision. The Supreme Court in its opinion said: "We do not believe any one would suppose that an act to amend section 8458 of the Revised Code, relating to drainage, would contain provisions authorizing the straightening of the Missouri river or the building of levees, dikes, or retards along the river, or that the amending of section 8458 would define the term drainage as including all of such works. We think the amendment is plainly unconstitutional, and that the county commissioners were without authority to let any such contract as that made the basis of this action, and that they cannot be compelled to approve the work or levy assessments to pay for it."

The board of county commissioners thereupon filed a motion for a modification of the judgment entered March 22, 1929, claiming that under the decision of the Supreme Court they had no authority to go ahead or carry out the judgment and mandate of the court. This was heard by the court on July 28, 1930, and December 8, 1930, the judgment entered on March 22, 1929, was vacated and set aside and the action dismissed upon the merits. The action was before this court heretofore on appeal from a decision of the District Court on December 16, 1926, sustaining a demurrer as to Yankton county and dismissing the action as to it. Woods Bros. Const. Co., Inc., v. Yankton County, S.D. (C.C. A.) 21 F.(2d) 267. This court held the county to be a proper party in view of the proceedings being in mandamus, and the rule of the federal court that mandamus therefrom issues only to aid the enforcement of a judgment. Thereafter Yankton county filed its answer and therein pleaded among other defenses the unconstitutionality of said chapter 193 of the Laws of 1921. The board of county commissioners in its answer pleaded likewise as to said statute.

The term at which the judgment was entered in favor of appellant for the $23,700 had expired a considerable time prior to the decision of the Supreme Court referred to, and the filing of the motion to vacate said judgment. The original judgment was entered in March, 1929. That term of court ended when the April term commenced on April 2, 1929. The motion to vacate was filed June 10, 1929. The order for judgment contains this reservation: "The court reserves full and complete jurisdiction of this cause and of all the parties thereto, for the purpose of making or entering any further orders or judgments that may be necessary for the protection of the plaintiff herein, and to compel the payment of its said judgment and to enforce performance of the same by the said Board of County Commissioners (and their successors in office), and other officers of the said county, in such manner as the court shall deem proper and necessary."

The requirements of the Code provisions as amended in 1921 had been complied with in letting the contract to appellant, the work was completed according to contract, the benefits were received by the district, and appellant has never been paid for its services.

Appellant's claim is that the District Court had no right or power to vacate said judgment after the term at which it had been entered had expired.

Appellees' contention is that the court had no jurisdiction to enter the original judgment, as under the subsequent decree of the Supreme Court in Woods Bros. Constr. Co. v. Board of Commissioners, supra, there was no jurisdiction of the subject-matter in said court at the time of entry of the judgment as the contract for the work was based on an unconstitutional statute, therefore was ultra vires and void, therefore the judgment was a nullity, and the court had inherent power to expunge it from its records and dismiss the suit.

The trial court held it had the right after the term had expired to vacate the judgment primarily on the theory that the same was a nullity by virtue of the decision of the Supreme Court of South Dakota as to the unconstitutionality of chapter 193, Laws of 1921, and secondly by virtue of the reservation hereinbefore set forth. Its views are made clear by the following quotations from its opinion1:

"It would therefore seem beyond controversy that this proceeding was founded upon a contract entered into under and by virtue of the provisions of this law that has since been held unconstitutional by the Supreme Court of South Dakota, and it further appears that this Court retained jurisdiction in the proceeding for the making of orders for the enforcement of judgment. * * *

"That this Court was without jurisdiction to try to determine any controversy between the parties hereto arising under said contract or under the pleadings in this action, because the Court had no jurisdiction of the subject-matter in the absence of a law under which the Board of County Commissioners could act."

We are unable to agree with the conclusions of the trial court. It seems clear to us that at the time the judgment was entered jurisdiction existed in the federal court so to do. There was diversity of citizenship, the amount in controversy was sufficient, a legal right was asserted by appellant, and denied by appellees. "Jurisdiction" has been defined in Reynolds v. Stockton, 140 U.S. 254, 268, 11 S. Ct. 773, 777, 35 L. Ed. 464, as "the right to adjudicate concerning the subject-matter in the given case." The test of jurisdiction is whether there was power to enter upon the inquiry. Surely there was a "case" or "controversy" here within the meaning of article 3 of the Constitution of the United States. The subject-matter which was in controversy was appellant's claim for compensation for services rendered to petitioners for the project and to the owners of the lands. The term "subject-matter necessary to confer jurisdiction" means in the federal courts that a "case" or "controversy" within the meaning of article 3 of the Constitution of the United States is present. It is not necessary that the right asserted be based upon a valid law. That question goes to the merits of the action and not to the jurisdiction of the court. A federal court cannot refuse jurisdiction of a controversy because the constitutionality of a state statute may be involved.

In Flanders v. Coleman, 250 U.S. 223, 227, 39 S. Ct. 472, 473, 63 L. Ed. 948, the court said: "Whether the District Court has jurisdiction to grant any relief must be determined upon a consideration of the allegations of the bill and the amendment thereto. If there be enough of substance in them to require the court to hear and determine the cause, then jurisdiction should have been entertained." And on page 228 of 250 U. S., 39 S. Ct. 472, 474, 63 L. Ed. 948: "As this court has not infrequently said, jurisdiction must be determined not upon the conclusion on the merits of the action, but upon consideration of the grounds upon which federal jurisdiction is invoked."

The judgment of March 22, 1929, was conclusive as to all issues raised by the pleadings, and those necessarily involved in the rights adjudicated thereunder. The validity of the 1921 amendment to the South Dakota Drainage Laws was raised by the pleadings and was necessarily involved in an adjudication that appellant had the right to recover. Both the county and the board of county commissioners pleaded that chapter 193 of the Laws of 1921 was unconstitutional. The federal court had the power at that time to pass upon the validity of the South Dakota statutes under which the contract had been made. It was as competent in law to pass on the question as was the state court. Their constitutionality was an issue.

Of course, federal courts accept as conclusive the construction of state statutes by the highest court of the state, no question of federal law being involved. Memphis Street Railway Co. v. Moore, 243 U. S. 299, ...

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