Clapp v. Otoe County

104 F. 473, 45 C.C.A. 579, 1900 U.S. App. LEXIS 3937
Court of Appeals for the Eighth Circuit·Decided October 9, 1900·No. No. 1,324·Published·Cited by 32 cases

Opinion

SANBORN, Circuit Judge.

This is an action upon county bonds of the county of Otoe, in the state of Nebraska, issued upon a favorable vote of the electors of Nebraska City precinct, in that county, under the provisions of sections 3518-3521, Comp. St. Neb. 1899. The defenses to these bonds which are urged upon the consideration of this court are (1) that the national courts are bound to declare these bonds void because, in a suit to which none of the holders of the bonds were parties, the supreme court of the state of Nebraska so decided, more than 30 years after the bonds here in question had been issued, and had been bought by John Martin Clapp, the plaintiff in error, who was a bona fide purchaser thereof for value (Morton v. Carlin, 51 Neb. 202, 70 N. W. 966); (2) because the board of county commissioners of the county of Otoe, in which Nebraska City precinct was located, did not draw its boundary lines where the statutes of Nebraska, directed that board to locate them; and (3) because the proposition to issue the bonds, which received the favorable vote of the electors of the precinct, prescribed that the bonds when issued should be delivered to three individuals named therein "as trustees for the persons who shall have paid for the right of way and depot grounds aforesaid,” and the bonds were so delivered and their proceeds were applied to pay private parties for expenses which they [476] liad incurred or paid to procure this right of way and these grounds for a railway company. The court below sustained the first defense, and dismissed this action, and the plaintiff in error questions that judgment.

It is not claimed that the decree of the supreme court of Nebraska in Morton v. Carlin, 51 Neb. 202, 70 N. W. 966, which enjoins the county commissioners and county clerk of Otoe county from levying taxes to pay these bonds, renders the questions in this action res adjudicata, since neither the plaintiff in error nor any one in privity with him was a party to' that suit. That was a taxpayers’ suit to enjoin the county commissioners and county clerk of Otoe county from levying taxes to pay these bonds, and the injunction of a state court is futile against an action in the national courts brought against the debtor by the holders of the bonds, or against a mandamus to enforce a judgment rendered in such an action. A state court may not by injunction prevent a federal court from proceeding to judgment in an action of which it has jurisdiction, or from enforcing its judgment by a mandamus to compel the levy and collection of taxes to pay it. Holt Co. v. National Life Ins. Co., 80 Fed. 686, 691, 25 C. C. A. 469, 474, 49 U. S. App. 376, 385; Riggs v. Johnson Co., 6 Wall. 166, 18 L. Ed. 768; Supervisors v. Durant, 9 Wall. 415, 19 L. Ed. 732; Hawley v. Fairbanks, 108 U. S. 543, 2 Sup. Ct. 846, 27 L. Ed. 820. Nor was there any attempt by the supreme court of Nebraska to give any such effect to its decree. On the other hand, it expressly stated in its opinion that the fact that the bonds were held by innocent purchasers was neither pleaded nor made to appear in that case, and that it was not directly considering the rights of such persons, if they existed. Morton v. Carlin, 51 Neb. 209, 70 N. W. 966.

Notwithstanding all this, it is earnestly contended by counsel for the defendant in error that inasmuch as the supreme court of Nebraska decided, in Morton v; Carlin, that Nebraska City precinct was never legally constituted, and that, therefore, all the bonds here in controversy were void,- and inasmuch as it reached that conclusion by construing the statutes of that state, its decision is binding upon the federal courts, under the rule so often announced and applied in this court, that “the national courts uniformly follow the construction of the constitution and statutes of a state given by its highest judicial tribunal, in all cases that involve no question of general or commercial law, and no question of right under the constitution and laws of the nation.” Madden v. Lancaster Co., 65 Fed. 188, 192, 12 C. C. A. 566, 570, 27 U. S. App. 528, 536. There are, however, two exceptions to this rule as vital and as clearly established as the rule itself. The first is that decisions of state courts which affect the validity of contracts between citizens of different states, which were made, or under which rights were acquired, before there was a judicial construction of the constitution or statute which seemed to authorize the contracts, are not obligatory upon the courts of the United States. Speer v. Board, 88 Fed. 749, 760, 32 C. C. A. 101, 113, 60 U. S. App. 38, 57; Burgess v. Seligman, 107 U. S. 20, 27, 2 Sup. Ct. 10, 27 L. Ed. 359; Pleasant Tp. v. Ætna Life Ins. Co., 138 U. S. 67-72, 11 Sup. Ct. 215, 34 L. Ed. 864; Louisville Trust Co. v. City of Cincin[477] nati, 47 U. S. App. 36-47, 22 C. C. A. 334, 339, 76 Fed. 296, 301; Jones v. Hotel Co., 30 C. C. A. 108, 86 Fed. 370, 373. The other exception is that conceding that the action of a municipal or quasi municipal body was illegal, as held by a state court, still the question whether or not the illegal action of such a body, in the exercise of a power granted to it, constitutes any defense to bonds issued or contracts made pursuant to such action, and held by a bona fide purchaser, is a question of general jurisprudence, which it would be a dereliction of duty for a federal court to decline to consider and determine for itself. Speer v. Board. 88 Fed. 749, 762, 32 C. C. A. 100, 114, 49 U. S. App. 38, 39; Hartford Fire Ins. Co. v. Chicago, M. & St. P. Ry. Co., 70 Fed. 201, 203, 17 C. C. A. 62, 65, 36 U. S. App. 152, 156.

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Clapp v. Otoe County, 104 F. 473, 45 C.C.A. 579, 1900 U.S. App. LEXIS 3937 (8th Cir. 1900).

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