350

;"'Y'/::'I'EDERAL REPoRTER"vol.

52,.

"Inactions at:Jaw itJsa general lulethatthe losing partiellortbe parties against whom. rendered are, to pay the costs, apd J;l,oapportionment of,the costs ,ismaQe,j:>E!tweenthem. is Hable for whateyer may be their relJpectjve iIlt!lrest, jn the sUbject-n1atter pi the suit. ", In equity it is different. ' 'rher,e'the coUt't 'has a discretion as to the costs.l'I.rtdmay iinpose them tlll upori'oIie party, 'or may: divide them in such manner as it sees 'fit." Tl¥ opiyeJ!:bepti()h'tQ tpis npt,expressly made by statu,te is where the' CQBl'nS cause. In Railway, Co. v. Swan, 111 ,4 Sup; ,Ct. Rep; Mr. Justice MATTHEWS says: practice and universally recognized rule of the cOlnxnQn Iiiw in a6tions at law, tlle prevailing party is, entitled to recover costs; the'exception that, where there is no jurisdiction in the c:l6lUt to determine thelitiglition, the'cause must be'dismissed for that reason" and,as, the ,court ,can render no jUdgment fOl' 'or against either party, it cann9trendflra judgmen.t even for costs." Thircase at baria apparently a. hard one for the defendant. At the time of suit brought :he'wasclearly entitled to the possession of the property which he had acquired in. good faith. Unfortunately for h,im, by his OWn inadvertent action in asking and obtaining credit with Carteri Hawley & Co. £01 the asphalt taken from him by the writ, he renounced the title he had received on his. purchase, and accepted in its stead ,reclilmation on Carter, Hawley & Co. The equities a1'e: with him" to the recovery of'his costs, but the settled rules of decision incases at .law will not permit of exception in his favor, and costs mustfoU()w the judgment.

M.ORTON '11.

(Circu.it

Crrv

OF NEVADA.

qourt

oj A:ppeatB, E,ft.1'f!,th O£rcuu. Ootober 8.1892.)

LmITATION OJ' AO'fIONB-RuNNING OJ' STATUTE-MUNICIPAL BONDS.

Bonds lltsUedby the toWIl of Nevada, M9.· in 1870, were repudiated, and the pay· ment of interest refused, in 1878. In 1877 action was brou.\rht to reCOVer upon the past;.;due cou'P0ns, but by agreement was suspended pending a suit in the supreme court of. the Ullited States,.whereln tMaotauthoriziJl,Jl:such issues was declared unconstitutional. It was subsequently taken up in 1S81, and judgment given for defendant. 'Thereafter an aetion for money had and received was begun. HeLd, it wasl>arre.d by the ¥is!!ouri stat"j;;e. 0,1; limitations. which began to run at least from the repudiation of the bonds,· and which limits actions on implied con· tracts to five years. 41 Fed. Rep. 582, aftlrmed.

In Error to the Circuit Court of the United States for the Western District of Missouri; . . . Action by .William H. Morton against the city of.Nevada. in the state of Missouri, for money,hali and redeived. Trial by the eourt on an agreed statement offaets. Judgmentfordefendant. 41 Fed. Rep. 582. Plaintiff brings error. Affirmed. . Statement: by CALDWELL, Circuit Judge:

MO:kTON V. CITY OF NEVA.DA·

351

.ThiSWlls an action brought by the plaintiff in error against tbe defendant in error for money had and receivelL The defense was a general denial; lind a plea ofthestatute oflimitatibos. The. case was trred by statement of facts:
"It is hereby stipulated and agreed that the following facts are admitted by both·plaintiff and defendant to be true, and 00 other proof thereof than this stipulation. need be produced. upon the trial of said cause, but the same may be used by either party. It is further agreed that either party sball, under this stipulation, have aright to introduce any other testimonytbey may deem proper; it being understood this agreement only extends to the admission of the truth of· the facts herein contained. In March, 1869, the town ofN evada, Vernon county, Missonri, was incorporated under chapter 41, Gen. St. Mo. 1865. In the year 1870, in order .to secure the location of the depot of the Tebo&; Neosbo Railroad, then building, within one half mile of licsquareof said town, instead of within the distance of three quarters of a mile of, ,said public square, as then contemplated by the board of trustees, agreed with the Tebo & Neosho Railroad Company to donate ten acres of ground. for depot purposes ifit would put the depot within one half mile of said public square, and by resolution entered of record on June 29. 1870. made the following proposition: · that whereas, the county of Vernon has subscribed totbe capital stock of the Tebo & Neosho Railroad Company to aid in building the railroadef said company within the cOllnty o{Yernon, and it wDi be advantageous to the town of Nevada to have the depot of said companYelitablished as near a8 practicable to the business of said town: It is therefore ordered that the. town of Nevada will procure and donate to the said Tebo: & Neosho Railroad Company the right of way for said company's railroad within and through the said town, and will also pay the said company the sum of five thousand dollars, as shall be such sum of money. not the actual cost to said company of establishingtbe depot of said com pliny within one half· mile of the public square ofsaid town, instead of within the disQlnce of three quarters of a mile of said public sq uare. Ordered further, that the toWll will procure and donate said company suitable grounds for said depot and the other purposes in connection with the operation of said railroad, not less in quantity than ten acres.' And thereafter, to wit, on June 4.1870. under and by virtue of the act of the general assembly of the state of Missouri entitled' An act to authorize cities and towns to purchase land, and to donate,lease. or sell the same to railroad companies, approved March 18, 1870,' the board of trustees of said town ordered an election of the qualified voters of said town to be held on.Octobell25, 1870, to vote upon the proposition to issue ten thousand in bonds of said town, with which to purchase ground to be donated to said Tabo & Neosho Railroad Company. That said election was held, as ordered, on October 25, 1870, and at said election a majority of the qualified voters of in favor of issuing said bonds to pursaid town voting at said chase ground to be donated to said railroad company; and thereafter, to wit, on November 1, 1870; nuder and by virtue of said act of the general assembly of the state.of.Missouri, approved March 18, 1870, before referred to, and in pursuance of said election so held as aforesaid, and under the order of said board of trustees,' there was executed, by its chairman, John T.Birdseye, signing his name·ther.eto,.and by the clerk of said board, S. A. Olaycomb, attesting the same aodaffixing thereto the seal of said town, twenty bonds numbered from 1 to 20, both inclusive, each for the sum of $500.01l, Which said bonds, by their .terms, were made payable at the National Bank in the city of New York, in. the state of New York. ten years after the date thereot, to wit, on the 1st day of November. 1880, and were made payable to the Tebo & Neosho Railroad Company or bearer. That said bonds, by their terms,

FEDERAL REPORTER,

vol. 52.

were'w bear interest at thElt'ate of ten :percent. perannUID, payable semi-annually !ltthe National Banit outhe 1st day of May and the 1st day of ovember ofeach year thereafter, oothe delivery of certain in terest· coupons thereto attached to each, of the, said. 20 bonds. That, after said bonds had been executed, Oscar Y. Nelson, then acitizell of the town of Nevada, was appointed by said boarcfoftrustees the financial agent for said town for the purpose of selling said bonds and receiving the money therefor, for and on behalf of said town. That said bonds were placed in his hands, and he, acting for said town as its financial agent by virtue ofsaid appointment, all of said bonds, through the firm of Jaynes & Newkirk, bankers at Sedalia, Mo.; to Wm.H. Morton, the plaintiff. That in January, 1871, said firmof Jaynes & Newkirk, bankers, as afore_ said, paid to Oscar M. Nelson, the financial agent aforesaid, the following amountS: January 19, 1871, $4,000.00; January 31, 1871,$4,171.00,-total, $8,171.00; making the total sum actnally received by the said board of trustees in moneyon account of the sale of said bonds eight thousand one hundred and seventy-one. dollars, ($8.171.00. ) That in pursuance of the agreement with the Tebo & Neosho Railroad Company, said board of trustees' purchased from vari· ous parties ten acres of ground, to be donated to said railroad for depot pur· poses, paying therefor out of-the $8,l!H.OO dollars derived from the sale of said dollars, and had all of said land deeded ditectlyto bonds the sum of the" incorporated town of Nevada.' The balance of said money was used by said board of trustees for various purposes incident to the government of said town. 'The said Tebo & NeOSho Railroad Company, having fully complied with the terms. and conditions upon.whichsaid donation wasta be made, took possession .of said property. The said Tebo & Neosho Railroad Companyhaving thereafter sold, conveyed, and merged all of its entire line of railroad in this state, and all its property, rights, andfranchiscs, in and to the Missouri, Kansas & Texas Railroad Company, the inhabitants of the town of Nevada, by E. E. Kimball, chairman of the board of trustees; on the 19th day of May, 1875, conveyed said ten acres of ground tothe Missouri. Kansas & Texas Cal; the Tebo & Neosho Hailroad Company having taken possessian of said ten acres, as before mentioned, some time prior to its merger into theM" K;& T. R,. R. It is further agreed that on the23d day of Au· gust, 1877, Wm. H. MortoR, plaintiff herein; instituted suit against the town of Nevada in tile United States circuit court for the western district afMissouri, at Jefferson City, to recover upon the past-due COupons that were attached to said issue of bonds, alldthereafter, to wit, on the 20th day of Novemuer, 1877, the town. of Nevada interposed a defense to said suit by filing an answer,inwhich it was claimed that ,said town was not liable in said ac· tion, .for the reason that Ilhe act of March 18, 1870, under .which the bonds to 'Which said coupons had been attached, was unconstituti<;maI.That thereafter, and on the same day, plaintiff in said action filed a demurrer to said answer, and on the 22dday of November, 1877, said demurrer was submitted. That at that time there was pending in the supreme court at the "Gnited States the case of Jarrolt v. 'Town of Mobe1'ly, in which the same question, to Wit, the constitutionaljtyof the act of March 18,1870, was involved, which said cause has been certified to the supreme court of the United States by reason of a division in.opinion of the' two jUdges sitting in said cause, which fully appears by a record of said calise reported in 103 U. S. 586, and to which referenceismade., The parties to said case of Morton v. Town of Nevada, by their' attorneys, then agreed that no further action was to be taken in the matter, but .that the same was to stand upon the pleadings as then made until the supremeeollrt passed upon'said Jan'olt Gase,after which either party might proceed in said matter as might be deemed best by said party; and that the same stand,conti·nued. That the supreme COllrt in said Jarratt Gase, in 103 U. 0. f>80,deoided, the act of March 18, 1870,U;Dconstitutional, to which

MORTON

17. CITY

OF NEVADA.

353

case reference is made· t() show what was passed upon, and that thereafter, and, to wit, on the 25th day of November, 1881. said cause of Morton v. Town of Nevada was taken following the rulings.-said Jarrolt (Ja$e,the demuner to the answer Was overruled. and judgment given for defendant, the town of Nevada, on the pleadings. It is further agreed that in the year 1884 the town of Nevada was reincorporated under the general laws of Missouri as a city of the third class, under the name of the' City of Nevada,' and assucb succeeds to all rights of said town, and assumed all of its liabilities. It is further stipulated that the interest on said bOnds was paid by the town of Nevada for the year 1871 and Hl72, after which the town refused to Pllyplaintiff any further interest. for the reason that said bonds and the cOupons thereon were unconstitutional, and issued without any authority· .,. ..J. B. HENDERSON, "REYNOLDS & LEWIS, and "J. B. JOHNSON, ..Attorneys for PlaintIff. "BURTON & WIGHT, .. Attorneys for Defendant." The lower court held the defendant was not liable for the money had and received, except possibly.as to the sum of 81,385.50, and that the whole cause of action was barred by the statute of limitations. There was judgment for the defendant, and the plaintiff thereupon sued out this writ of error. Matt. G. ReynolcM and James M. Lewi8, for plaintiff in error. O. G. Burton and S. A. Wight, for defendant in error. Before CALDWELL :md SANBORN, Circuit JUdges, and SHIRAS, District Judge. CAI,DWELL, Circuit Judge, (after stating the facts.) It is needless to discuss the question of the liability of the defendant to the plaintiff for the money for the void bonds" Under some circumstances money thus paid may be recovered back; under other circumstances it cannot. To. which class this case belongs we need not inquire, because, if any such liability ever existed, it was clearly barred before this action was brought. By section 3230 of the Revised Statutes of Missouri the limitation of actions on implied contracts is five years. The t.iff'saction is bottomed on the alleged implied obligation of the defendant to repay the money it received for the bonds. The action is barred, whether it accrued when the money was paid for the void bonds, or when the town refused to pay interest, and denied its obligation to pay the bonds, upon the ground that they were void for want of authority in the town to issue them, or when that defense was forllially interposed to the suit on the bonds. All of these events happened from 8 to 15 years before the suit wasJ>rought. No fact is shown which, in law, would in. terrupt or suspend the running of the statute after the town refused to pay interest and repudiated the bonds, which it did in 1873. The bonds were void, and not merely voidable. They were.infected with a fatal and incurable vice. It was beyond the power of the town to impart legal validity to them. There could be no ratif;ication, and no estoppel, which would render them valid or binding obligations on v.52F.no.4-23

FEDERAL REPORTER ,

vot ,52.'

could, have ,shed

thet9wn.: .'Up6lflthfFll.dmitted fBcts dfr't!ie:case;' therefore, the, plaintitr' recovery' orliis ',Jtli'6neythe 'vert 'day' he recei ved' tbek<>,uds'hand run thE! ijmet ,e'Plittty npghthave to apply! tbisruleJ initbis case" The. pajdthe intews.t on the bonds fGrJtwoyears.: ' totlresepaymentsthe:utmoSi'efl'f;lct that can be IfOf ,them }be stntute did >l10tc'run as long as

tllat 'date the :Pl1id U() .and; ,undouhtedly , ute oflimitations would run· against an action for the money paid the bondft:Jfromthall,date. F\JJr'tong v. Stone, 12 R. 1. 437; Bishop v. 12 32,57; B'ree v. Holbech, 2 Doug. '654; Oowpet Bmg. 748, 23 E. C. L. 788; Lunt v. .. . School Dist., 26 Kan. 490; Weaver v. 52 Md. v. AdarlUl" 16 Mass. 45,6; Palmer v. Palmer,

Ao,

1

Il).nq _

inte.rest,

3,,6 i M,16W i,I,188,',!494; inpleil",.MC'P,>ift8" '50 Mo.', '" '. ofthe' cii'tmitcourt is affirmed,.'
: , ,': It

ff II

; ,

L

,

"

'

.

i'

j ,

'-'1,

','

il

,.

. ,

.,' ;

(d, ,'lr" .H:-oDG,ES

(Circuit Cwn of Appeals, EiOhth Oircuit. October 8, 1892.)

:No,20. ,

1. .

'The questlori& wlIethercertain commercial correspQlldence cQnstituteu,contl'aot, pr'Oper ,construction,'s, are though in and,,)t lIP. excepti01lal'eltsell, when tlie.uleged contract ,rests partly in correspondence snd .partly in ,enosl Communications, the q;uest,onwhether there is a contraot, is for the ,J\1,ry; " ' , f"j; ,
oil' COURT ANDJ'U:Ry. '

.. SA,ME-:aRi:ACH,. ,. .' . , The: oonsignees 'of sbipments of wheat 'W&l'6 under contract., to collect tbebill

_'" -troIn !pl1lillg ·. to an order on tbe railroad . oompany to deliver, the to the mining company,' arid thereupori to reinJt the . : amo,un,to W,''lIIi&. Bh.i,1>I>, er,s." HeZd' that, ii, '.,the 00" DSlgnees. eXP,resslY or imllllMl1 con" [' by tbe. raUroad,CQmpav,y to the mUllng oompany ment o'nhe DiU, they were l}able for its llrice. " ·,; . . In ali 'actioD ;by the consignors QQnsignees, to recover the valUe Of the wheat, tW tbat wheat.was ,to thllm by the railroad comvany. was redund'arlt, and need 'rio,t,be roved,ft app. ea.ring that the'Whe.at was in cars on oonitede.4ly subject as '
P,

'" SMONDARY-¥jl'IDIINCB'-,-;4,;l>,\II,ilSP;llLITt;.",.

·Parolevtd.ence bt tl111statioh master o:t:.the contents of a ltriting given him by ·. the ,consigtil!e&, statin'!!, that' 'the railroad Was not liable for ,Wheat consigned to . tbem and F.':ill}ng company without written, orders, was it having'bil&n shown tll"t'the paper was lost, and could not be found by'ilillgent .ear'oh:, ,,'i' ' ) . .,'''.:
':'1":·;)'

.',.

.'

In

Minnesota.: ·

CircuitCol'lrtofthe·United States for the District of