Court Opinion

ID: 6660887
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:01:55.049018+00
Date Added: 2024-06-11T16:00:10.501378
License: Public Domain

Hamer, J.,
concurring.
This action is brought upon three judgments rendered *475in the district court for Clister county in favor of the Broken Bow Water-Works Company and against the city of Broken Bow, in the years 1892, 1893, and 1894. These judgments were purchased by the plaintiff, Avho is the appellant. They C0Arer the alleged difference between the price at AAiiich the water-works company Avas to supply the city of Broken Boav with water under a franchise contract Avith that city and the amount raised and paid out of the levy of an annual tax of seven mills on the dollar upon the taxable property within the state. The three judgments are by this action sought to be revived. It is claimed by the defendant that these judgments must be deemed to be paid because the city exhausted its taxing poAvers for the payment of hydrant rentals when it levied a seven-mill tax. To the defendant’s answer that the three judgments Avere void, the plaintiff replied that the matter in controversy is res judicata, and that the judgments are valid because heretofore declared to he valid in a suit betAveen the same parties in a court of competent jurisdiction. Section 9 of the ordinance provides that the franchise and license granted shall remain in full force and effect for 25 years; that the said city of Broken Boav shall take 30 hydrants during said term of 25 years at the rate of $85 per annum until such time as there are 150 water consumers, and thereafter that the rate shall be $75 per annum for each hydrant up to 50, and above 50 that the price paid by the city shall be $60 per annum. There was a specific promise to pay the price stipulated. It is the contention of the city that, notwithstanding its promise to pay the stipulated price for a supply of water to he furnished through these hydrants, yet the promise is not binding because of the further agreement to levy a tax. As the Avriter understands the oral argument of counsel for Broken Bow, it seems to make the concession that the legislature and contractors may have contemplated that the seven-mill levy to pay for the use of hydrants might be entirely inadequate at the commencement of the term at the contract price for each year, yet *476that towns grow in population and that the value of the taxable property increases, and that it may have been considered by the contracting parties that within the full 25-year period or term of the contract the value of the taxable property of the city would probably increase so that the levy might aggregate enough to pay off the debt; but, nevertheless, counsel for the city make the contention that the levies made and applied exhausted the ability of the city to pay, and therefore paid the debt. Every intelligent person knows that the value of the taxable property in a frontier toAvn multiplies rapidly if the town is prosperous. If the full amount for any one year is not raised, then is there any reason why the remainder of the 25 years and the groAvth of the city during that time and the increase of its taxable property may not be considered? It is the contention of the city that, because the promise to pay contained a condition that seven mills on the dollar should be annually levied upon the taxable property to meet payments under the ordinance, therefore the city was not bound to pay anything more than the tax specified.
In the City of Austin v. Cahill, 99 Tex. 172, 88 S. W. 542, the city had issued its bonds for Avater and light, and the ordinance provided that there should be levied and collected for the year 1890, and for each year thereafter, a tax to pay the interest and provide a sinking fund. There was a limit allowed by the constitution of 2£ per cent, on the taxable property of the city for any one year. It was held that the neglect' of the city to perform its contractual obligations did not enable the city to escape that duty, and that it might be forced to perform the same by mandamus.
In East St. Louis v. Amy, 120 U. S. 600, the city of East St. Louis issued its bonds, and had neglected to make the leA^y for a number of years, AAdien the plaintiff sued to compel' payment. It was objected that a tax could -not be levied in any one year sufficient to make good the past defaults. Chief Justice Waite said: “The accumulation *477of the debt was caused by their own neglect. * * * We see no reason why it was not in the power of the court to order a single levy to meet the entire judgment.”
In Coy v. City Council of Lyons City, 17 Ia. 1, the court said: “The object of the suit is to compel payment, and the defense only shows an inability, under the law, to levy sufficient to satisfy it in one year, but a clear ability to do it in subsequent years. The court * * * will grant complete relief by providing for the payment of the whole debt.”
In City of Cleveland v. United States, 111 Fed. 341, where there was a limit to which the city could tax, and and it had neglected to make the levy in former years as provided by the contract, the court held that there was no reason why the relator should be without relief simply because it was beyond the power of the city to levy the whole amount in any one year.
Four opinions have been delivered by this court whicli relate to this case. The first was prepared by Commissioner Frank Irvine, who describes the case as “an action by the city of Broken Bow, with which joined a citizen and taxpayer (Taylor Flick) against the Broken Bow Water-Works Company and others to enjoin the defendants from enforcing three certain judgments recovered by the water-works company against the city.” City of Broken Bow v. Broken Bow Water-Works Co., 57 Neb. 548. The opinion in that case (which we will call the Taylor Flick case) makes the subject matter of this particular case res judicata. After this comes the case of State v. Royse, 3 Neb. (Unof.) 262, filed July 1, 1902, three years after the Flick case was decided. There was a rehearing in the Royse case November 18, 1903, and Commissioner Oldham prepared a second opinion 3 Neb. (Unof.) 269. Then there was a second motion for rehearing, and Chief Justice Holcomb wrote an opinion filed February 4, 1904, denying the motion. 71 Neb. 1.
The first of the Oldham opinions in the Royse case contains this statement (p. 266) : “A judgment against *478a city or county is but an audited demand against such municipality which is no longer open to contest.” The first Oldham opinion holds that the claim is audited; that it stands against the city; that it is no longer open to contest; and declares that it will not issue the writ of mandamus to compel the levy of a tax, because there is no power then to do so, meaning at that particular time, but not excluding a consideration of the future. It does not follow that the full limit of 10 mills on tin' dollar will be required to pay the current expenses of the city for each ensuing year. If there should be an excess raised by the levy of 10 mills above that required to pay the general expenses of the city, then it would seem that such sum might be applied. In the second Oldham opinion it is said: “We are asked to re-examine and depart from the doctrine of United States v. County of Macon, 99 U. S. 582, 591, 25 L. ed. 331, relied upon to support the conclusion reached at the former hearing, because the facts of this case take it without the reason of the rule there established and bring it within the rule laid down in United States v. County of Clark, 96 U. S. 211, and, also, in Ft. Madison Water Co. v. City of Ft. Madison, 110 Fed. 901. * * * The special taxes provided for by the statutes construed in each of these cases were held to be an additional grant of power to provide ‘a particular fund as additional security for the payment of a debt,’ and not as limitations on the power to enter into the various contracts.” What Oldham said is not reversed or in any way annulled by the Holcomb opinion.
In United States v. County of Macon, 99 U. S. 582, it was said: “The judgment has the effect of a judicial determination of the validity of his demand and of the amount that is due, but it gives him no new rights in respect to the means of payment.” In that case a mandamus was refused, but it was not determined that the money due might not some time be collected.
In United States v. County of Clark, 96 U. S. 211. it was held.: “That the bonds are debts of the county as *479fully as any other of its liabilities, and that for any balance remaining due on account of principal or interest after the application thereto of the proceeds of such tax the holders of them are entitled to payment out of the general funds of the county.” In the body of the opinion it was said: “There is no provision in the act that the proceeds of the special tax alone shall be applied to the payment of the bonds. None is expressed, and none, we think, can fairly be implied. It is no uncommon thing in legislation -to provide a particular fund as additional security for the payment of a debt. It has often been done by the states, and more than once by the federal government. The act of congress of February 25, 1862 (12 Stat. 346), set apart the coin paid for duties on imported goods as a special fund for the payment of interest on the public debt and for the purchase of one per cent, thereof for a sinking fund; yet no one ever thought the obligation to pay the debt is limited by the amount of the duties collected. Limitations upon a special fund provided to aid in the payment of a debt are in no sense restrictions of the liability of the debtor. * * * And it is not to be inferred, from a provision giving the creditor the benefit of a special fund, that it was intended to place him in a worse-position than that he would have occupied had no such provision been made. And that, too, in the absence of any direction that he must look exclusively to that fund. Such is not a reasonable construction of the statute. Such is not a fair implication of its purpose. It accords neither with its letter nor with its spirit.”
It does not follow that ten mills on the dollar would be required to pay the general expenses of the city every year. Then, if there should be an excess raised by the levy of ten mills above that required to pay the general expenses of the city, it would be proper under the last Oldham opinion to apply that sum. In the Holcomb opinion it is said: “It is agreed that the judgments owned by the relator represent an adjudication of the liability of the city of Broken Bow, for sums due as hydrant rental *480or for water supply for fire protection furnished by the water-works company to the city, under an ordinance enacted for that and other purposes, and under which the water-works company is operated.” It should be remembered that this court, when that opinion was delivered, was only deciding the question that was then before it, and that question was whether at that time, on the then present valuations, and under the then present statute, and with the then existing conditions, a levy of the tax could be compelled. Suppose the general expenses to run the city require ten mills for one year, but suppose that the next year the value of the property in the city has so increased that it no longer requires ten mills for the Tuning expenses and that seven mills will pay them, then there would be an excess of three mills to be used for the payment and satisfaction of any indebtedness due from the city. It is hardly credible that the city intended to deny to the holder of the contract any right to look beyond the slender provision for the payment of interest and principal furnished by a levy of only seven mills on the dollar. What could have been the purpose of contracting the liability if it was not to be paid? But it was adjudicated in the Taylor Flick case and stipulated that the judgments were owned by the plaintiff in this case, and that they represent an adjudication of the liability of the city of Broken Bow for the sums due as hydrant rentals. The three judgments sued on being rendered in 1892, 1893, and 1894, were therefore in existence long before the foreclosure proceedings in the United States circuit court were commenced, and these judgments were the property of the plaintiff in this case and could not have been divested by that proceeding. The contention of the city that the contract originally made is ultra, vires was disposed of and became res judicata against the city and in favor of the plaintiff January 19, 1899, by the Irvine opinion (57 Neb. 548), and long before the Holcomb opinion (71 Neb. 1), filed February 4, 1904. The Holcomb opinion could not have decided that which had already been determined *481by tins court when it delivered tbe Irvine opinion. The district court in the Taylor Flick case, in which the Irvine opinion was delivered (57 Neb. 548), held that the original judgments were “null and void” and “perpetually enjoined” the defendants “from collecting or attempting to collect said judgments or any part thereof.” But on appeal this court held the case to be “wholly without merit,” and reversed the judgment of the district court. The identical questions here sought to be raised were then raised and determined in the district court in favor of the city and the taxpayer, Taylor Flick, and on appeal this court reversed the judgment as announced in the Irvine opinion.
In United States v. County of Clark, supra, a county had subscribed for stock of a railroad corporation, and had issued bonds in payment thereof, pursuant to a law which authorized a levy of a special tax to pay them “not to exceed one-twentieth of one per cent, upon the assessed value of taxable property for each year.” Among other conditions, it was urged by the defense that the relator was not entitled to a warrant payable out of the ordinary revenues of the county. The United States supreme court said: “The question presented by the record is, whether the relator is entitled to payment of his judgment out of the general funds of the county, so far as the special tax of one-twentieth of one per cent, is insufficient to pay it.” An examination of the decision in United States v. County of Clark, supra, shows that it was held that the bonds were the debts of the county as fully as any other of the county’s liabilities, and that for any balance remaining due on account of principal or interest after the application of the proceeds of the tax, being not to exceed one-twentieth of one per cent, upon the assessed value of the taxable property for each year, the holders would be entitled to payment out of the general fund of the county. This view is clearly and ably expressed by Justice Strong in Macon County v. Huidekoper, 33 L. ed. (U. S.) 914 (134 U. S. 332). The first point in the syl*482labus in that case reads: “Under the Missouri law authorizing a county to subscribe to stock of the Missouri & Mississippi Railroad Company, and issue bonds therefor, and levy a tax of one-twentieth of one per cent, to pay same, after applying said tax to the payment of a judgment on interest coupons of said bonds, the balance due on such judgment is a liability of the county to be paid out of its general funds.” The second point in the syllabus reads: “The statutes of the state having authorized the county to levy another tax of one-half of one per cent, for county purposes, the owner of the judgment may by mandamus compel the county to levy the full amount of said last-named tax, and apply it to the payment of the said balance, due on said judgment pro rata with other demands against the county.” If we apply the doctrine laid down in the last case above cited to the instant case, it will be seen that the city is liable for the full amount which it promised to pay, and that it has not satisfied the debt by levying and collecting a seven-mill tax and applying the same on the debt, and that, if there is a surplus at any time beyond the ten per cent, for current expenses, it can be applied on the debt, and, if there is a failure to levy the ten per cent, allowed under the law, then that the city can be compelled to make such levy, and-that the surplus will be available to apply on the debt.
Under the oral stipulation and by reason of the judgment rendered in the Taylor Flick case (57 Neb. 548) the validity of the judgments was determined. Of this Taylor Flick case Commissioner Irvine, in delivering the opinion of this court, says: “The petition did not state a cause of action.” He then sets out the contents of the petition, being the ordinance in full, the alleged levy of seven mills tax each year, and the statement that the judgments, with accrued interest, amounted to $8,685.78, all of which the plaintiffs then averred to be in excess of the limit stipulated by said ordinance, and also in excess of the amount that said city could lawfully contract to pay for water service. The question was then discussed *483in the opinion that the contention of the city and Taylor Fliclc was that the city could not lawfully contract to pay more than seven mills on the dollar each year.. If that question was fairly submitted before the district court and was determined by it, and an appeal was taken to this court from the judgment- of the district court and a new judgment announced, then that ought to forever settle it. The view of the district court is shown by the judgment rendered for the city, and the view of this court is shown by the fact that this court on appeal dismissed the action, and so decided against the city. The Irvine opinion says that the sum realized by the levy of seven mills on the dollar proved insufficient to pay the company the stipulated rate per hydrant, and that by the year 1892 the deficit amounted to over $4,000, and that the city answered confessing its liability, and that judgment was entered against it, and that in 1893 and 1894, other deficiencies having arisen, judgments were again taken. The petition alleged that the said sum of $8,685.78 was in excess of the limit stipulated in the ordinance, and in excess of the amount that the city could lawfully contract to pay, and this contention was determined against the city of Broken Bow and against Taylor Flick by this court. The Irvine opinion says: “It is the first time we have heard that one conceiving money to be justly due him is guilty of fraud or any other sin in seeking payment, or in threatening to resort to the remedy afforded by law for that purpose. There is no allegation that any facts were misrepresented, or that the company did other than to threaten suit to recover a demand it deemed just.” This court determined that the injunction granted by the district court should not have been granted, that “the case is wholly without merit,” and reversed the judgment of the district court. That judgment of this court still stands. This court is not at liberty to decide upon the present record concerning the merits of the controversy because of the fact that the former attack upon their validity and enforceability was decided adversely to the *484city by tins court, and tlie city by the judgment rendered at that time is forever barred. If the validity of i'. three judgments sued on has become res judicata} it is idle to make any inquiry concerning the inherent validity or invalidity of the contract which went into these judgments; for, if the judgments have been declared valid by the action of this court, then the parties and the court are bound by the prior adjudication.
This action is to be regarded as one upon domestic judgments, or as an action to revive dormant judgments Snell v. Rue, 72 Neb. 571. The plaintiff owns these judgments; they have not been paid; on their face they are dormant. They ought to be revived.
It is the opinion of the writer that, where a case is tried in the district court upon pleadings which necessarily require a consideration of the issues and facts in dispute between the parties, and such issues and facts are determined by such court in favor of the plaintiff and its judgment is rendered concerning them in favor of the plaintiff, and thereafter on appeal the case is considered by this court, and the judgment of the district court is reversed and this court renders its judgment against the plaintiff and in favor of the defendant, a subsequent examination of the same issues and facts in a new case in the district court between the same parties will be considered barred, and the subject matter of the inquiry and the condition of the parties relating thereto will be regarded as res judicata.