Utter v. Franklin

64 P. 427, 7 Ariz. 300, 1901 Ariz. LEXIS 54

• Court: Arizona Supreme Court
• Decided: March 22, 1901
• Docket: Civil No. 546
• Status: Published

Opinion

SLOAN, J.

The plaintiffs, December 31, 1896, filed their petition in this court, which prayed for a writ of mandate to compel the defendants, who were then, respectively, governor, auditor, and secretary of the territory, and who, by virtue of holding said offices at the date of the. filing of said petition, were the loan commissioners of the territory, to fund the bonds, and the interest due thereon, issued by Pima County in aid of the Arizona Narrow-Gauge. Bailroad Company under the provisions of a territorial act of February 21, 1883. The defendants demurred to the petition, and, by way of answer, set up that the bonds sought to be funded, in the suit of Lewis against Pima County, by the district court of said Pima County, were declared to be void and of no binding obligation upon the said county; that the judgment of the district court was, upon appeal, affirmed by the supreme court of the territory, and on appeal from the judgment of this court the latter was affirmed by the supreme court of the United States; that the judgment so rendered and affirmed in the Lewis case was res adjudicada, and binding upon the plaintiffs in this suit. The records of this court in the present case show that the demurrer to the petition was sustained, and the petition dismissed, whereupon an appeal was taken to the supreme court of the United States. The latter court reversed the judgment of this court, and remanded the cause “for further proceedings not inconsistent with the opinion.” Utter v. Franklin, 172 U. S. 424, 19 Sup. Ct. 183, 43 L. Ed. 498. In the. opinion the supreme court held that the judgment in the case of Lewis, holding that the bonds were invalid because the territorial legislature had no authority to authorize their issuance under the organic law, “was res adjudicada only of the issues then presented, of the facts as they then appeared, and under the legislation then existing”; that the act of Congress of June 6, 1896, cured this defect, and validated the territorial act of February 21, 1883, and made it the duty of the loan commissioners to fund the bonds in question. Upon the filing of the mandate of the supreme court in this court, the defendants asked leave, to file an amended return raising new issues of fact, and setting up that the bonds in question were “not sold or exchanged in good faith and in compliance with the act of the legislature by which they were authorized,” and so were not of the class of bonds validated by the act of June 6, 1896, and required to be funded thereby. Leave to file this amended return was granted for the reason that the record in this court, where the cause originated, discloses that the judgment of this court from which the appeal was taken to the supreme court of the United States was rendered upon the issue of law raised by the demurrer, and not upon any issue of fact raised by the original return. We took the view that in the state of the record the mandate of the supreme court reversing the cause, and remanding it to this court “for proceedings not inconsistent with the opinion,” made it our duty to consider and decide any issue of fact, properly pleaded, which amounts to a defense, and which is not in fact decided by the supreme court in passing upon the issue of law presented by the demurrer; that, under the law and practice regulating appeals of this character, such a mandate, being general in its terms, is to be construed as justifying this court in considering and •deciding any question left open by the mandate and opinion of .the appellate court. Ex parte Union Steamboat Co., 178 U. S. 318, 20 Sup. Ct. 904, 44 L. Ed. 1084. The issue of fact raised by the amended return, and which, in our view, was left open by the opinion and mandate of the supreme court, involves the question as to whether the bonds were exchanged by the county of Pima for the bonds of the Arizona Narrow-Gauge Railroad Company in good faith, and in compliance with the act of the territorial legislature, of February 21, 1883. Upon the order permitting the defendants to file their amended return being made, a commissioner was appointed to take and report the testimony which the parties might desire to put in bearing upon the new issue of fact raised by the amended return. The evidence has all been taken, and is now before us. The. defendants now present two objections to the granting of the writ of mandate which arise out of facts that did not exist at the time the ease was heard in this court on the demurrer. These are: 1. That the action wás begun against Benjamin J. Franklin, governor, C. P. Leitch, auditor, and C. M. Bruce, secretary, and that each of the defendants has long since been superseded in office by another person, and that therefore the action should abate; and 2. That the loan commission has ceased to exist, by repeal of the statute creating the same, and no provision was had in the repealing statute reserving from its operation pending proceedings, and that therefore the action must abate, because there is no officer or person upon whom the duty rests to fund the bonds in question, or against whom the writ of mandate may be enforced.

Upon the first point raised we deem it sufficient to say that the weight of authority in the state courts is in favor of the view that the writ of mandamus operates on the office, rather than on the individual who occupies the office, and therefore does not abate by a change of personnel in the office, and that no revivor is necessary against a successor of the officer against whom the proceedings were instituted. This also appears to be the rule as followed in the supreme court of the United States whenever a proceeding is to enforce a continuing duty against a corporation or municipality. Thompson v. United States, 103 U. S. 482, 26 L. Ed. 521; Commissioners v. Sellew, 99 U. S. 624, 25 L. Ed. 333. The loan commissioners were, by the statute creating the board, made a continuing body, and the delinquency complained of ■ related to a continuing duty of the commission; and we see no reason why the doctrine as applied in the above cases does not apply to the present proceeding. Ex parte Parker, 131 U. S. 221, 9 Sup. Ct. 708, 33 L. Ed. 123.

The question as to whether the loan commission has been abolished is one which involves a consideration of not only the repealing statute, but, as well, the various acts, congressional and territorial, relating to the creation of the commission, its dnties, and the general subject of funding. In the Revised Statutes of 1887 there, was incorporated, as title 31, an act which provided for the creation of a commission to be known as the “Loan Commissioners,” and the funding by this commission of the outstanding and existing indebtedness of the territory. This commission was to be. composed of the governor, auditor, and secretary of the territory. Congress, by the act of June 25, 1890, amended the territorial act in important particulars, and then “approved and confirmed” the same, “subject to future territorial legislation.” The territorial legislature, construing the clause “subject to future territorial legislation’5 to mean that Congress, having taken up the territorial act of 1887 and amended it before, making it binding and operative upon the territory, chose to confer upon the latter the privilege of consenting to or disapproving of its provisions, by its act of March 19, 1891, supplemented the congressional act by additional provisions intended to more perfectly carry out its provisions, and in the first section declared that the latter act should “be and the same is hereby now re-enacted as of the date of its approval.” The language used in the territorial act indicates that the territorial legislature intended to approve of the congressional act and accept its provisions, under the permission granted and expressed in the clause “subject to future territorial legislation.” Whether this construction was primarily right or not, it has been subsequently followed by the legislative, assembly of the territory and acquiesced in by Congress. Congress, by the act of August 3, 1894, amended section 15 of the act of June 25, 1890, by extending its provisions so as to permit the funding of additional indebtedness. When the next legislature convened after the passage of the congressional act just mentioned, construing, as did its predecessor, the clause £ £ subject to future territorial legislation” to mean that the congressional act should only become operative when accepted by the territory through its general assembly, by act approved March 19, 1895, ratified and confirmed the objects, purposes, and provisions of the congressional act. In the congressional act of August 3, 1894, and in.the curative act of Congress of June 6, 1896, the act of Congress of June 25, 1890, is referred to; and no mention is made of a re-enactment of the same by the territorial legislature, which is significant, as indicating that Congress recognized the. act of June 25, 1890, as having become operative, and as continuing in force, and as constituting the existing law upon the subject of funding. Congress having full authority to legislate directly for the territory, and the territorial legislature having only such power as is specifically delegated to it by Congress, whenever the latter legislates upon any subject pertaining to the territory such legislation has the force and effect of a constitutional provision, and becomes a part of the organic law. Had. the clause “subject to future territorial legislation” not appeared in the act of June 25, 1890, unquestionably the act would have become immediately operative, without the consent or aequiescence of the territory; and no subsequent legislation by the territorial legislature would have been needed to give it effect, or could in any way affect its provisions. In the. light of the contemporaneous construction placed upon the clause “subject to future territorial legislation” by the legislature of the territory, and in view of the fact that Congress thereafter invariably referred in subsequent legislation to the act of Congress of June 25, 1890, and made no mention of any re-enactment of the same by the territory, and considering the relation which the territory sustains to Congress, we are led to the conclusion that the act of June 25,1890, is now to be construed as having been accepted in accordance with the permission granted to accept or refuse the same, and, having been accepted, is now the paramount law upon the. subject of funding, and becomes a part of the organic law, to the extent, at any rate, that it may not be changed so as to render any of its provisions inoperative by any act of the territorial legislature, except with the express consent of Congress.

The repealing statute which we have referred to (being act No. 32 of the Laws of 1899) reads as follows: “That paragraph 2039, section 1, chapter 1, title XXXI, of the Revised Statutes of the territory of Arizona; also that section 1 of act No. 79, Session Laws of the sixteenth legislative assembly of the territory of Arizona; also act No. 33 and act No. 74, Session Laws of the eighteenth legislative, assembly of the territory of Arizona, are hereby repealed.” Paragraph 2039, referred to in this act, was reincorporated as the first section of the congressional act of June 25, 1890, and reads as follows: “For the purpose of liquidating and providing for the payment of the outstanding and existing indebtedness of the. territory of Arizona, the governor of the said territory, together with the territorial auditor and the territorial secretary and their successors in office, shall constitute a board of commissioners to be styled the. loan commissioners of the territory of Arizona, and shall have and exercise the power and perform the duties hereinafter provided.” Act No. 79, referred to, is the act of March 19, 1891. Act No. 33 and act No. 74, sought to be repealed by the act, do not pertain to the creation of the board of loan commissioners, and their consideration is not important in this connection. The act of Congress of June 25, 1890, covered the whole field of the previous territorial legislation upon the subject of funding, and included such new legislation as to clearly indicate the intent that it should take the place of the territorial act of 1887. When two acts are not in express terms repugnant, yet if the latter act covers the whole subject of the former, and embraces new provisions, plainly showing that it is intended as a substitute for the first act, it will operate as a repeal of that act. United States v. Tynen, 11 Wall. 88, 20 L. Ed. 153. The act of Congress, being revisoryin its terms, embracing new provisions, and covering the whole subject of funding, supplemented and thereby repealed the territorial statute of 1887. As repeals by implication are not favored, the repeal of the first section of the statute of 1887 can, therefore, have no effect to repeal the similar provision of the act of June 25, 1890. Again, by the attempted repeal of the first section of the act of March 19, 1891, which, as we have seen, provided, in terms, “that the act of Congress entitled ‘An act approving, with amendments, the funding act of Arizona approved June 25, 1890,’ be and the same is hereby now re-enacted as of the date of its approval,” the intent of the legislature is uncertain, in that it is not made evident whether the repeal of said section is to be construed as an attempt to repeal the whole, or only a part, of the congressional act, if it can possibly be construed as tending to either result. It can hardly be construed as an attempt to repeal the whole of the act of June 25, 1890, inasmuch as the other sections of the act of March 19, 1891, were excepted from the repealing act, and these were supplemental to the congressional act. If the repealing of section 1 of the law of 1891 be construed as a repeal of only a part of the act of June 25, 1890, how, then, can the court give it effect by declaring what portion of said act it was designed and intended to affect? Irrespective, therefore, of the question of the power of the territorial legislature to repeal the congressional act creating the loan commission, it is more than doubtful if the act of 1899 can be construed so as to effect that result.

Mr. Justice Brown, in the opinion delivered in this case in the supreme court, construing the act of Congress of June 6, 1896, said: ‘ ‘ The first section of the act requires the funding of all outstanding obligations of said territory and its municipalities, and all outstanding bonds, etc., of the territory and its municipalities, ‘heretofore authorized by legislative enactment of said territory, bearing a higher rate of interest than is authorized by the aforesaid funding act, approved June 25, 1890,’ which said bonds, 'etc., ‘have been sold or exchanged in good faith in compliance with the terms of the acts of the. legislature by which they were authorized’; and the second section confirms, approves, and validates all bonds and other evidences of indebtedness theretofore issued under the authority of the legislature, and authorized to be funded by the first section, and declares that they may be funded as in this act provided, until January 1, 1897.” As we have said, therefore, under the opinion of the supreme, court, and its mandate, as well as under the terms of the act of June 6, 1896, we are limited, under the issues of fact raised by the amended return, to the inquiry as to whether the bonds in question “have been sold or exchanged in good faith in compliance with the terms of the acts of the legislature by which they were authorized.” The first two sections of the act of February 21,1883, read as follows:—

“Section 1. Upon information in writing to the chairman of the board of supervisors of Pima County, Arizona Territory, by the president of the Arizona Narrow-Gauge Railroad Company, the corporation of that name which filed its articles of association with the secretary of said territory on the 23d day of November, A. D. 1882, that said railroad company is ready to exchange bonds with the said county of Pima, according to the provisions of this act, it shall be the duty of said chairman, and he is hereby directed to call a meeting of said board, to be held- within five days after the receipt of said notification, and it shall be the duty of said board of supervisors, and they are hereby directed to meet within five days, at the county seat of said county, and then and there to order issued two hundred thousand dollars 'of bonds of said county, in denominations of one thousand dollars each, and bearing interest at the rate of seven per cent per annum, interest payable semiannually, the principal payable in twenty years, which said bonds, and the interest coupons thereto attached, shall be signed by said chairman and the clerk of said board, and shall, within thirty days after the said -order of issuance thereof has been made, be delivered by the clerk of said board to the county treasurer of said county of Pima, to be by him disposed of as hereinafter provided, and said county treasurer shall receipt to the said clerk for the said bonds.

“Sec. 2. Upon the application of said railroad company to the said treasurer, and the. tender by said company of fifty thousand dollars of the first mortgage bonds of said company in like denominations, bearing like interest and payable in like time as those of said county, it shall be the duty of said treasurer and he is hereby directed to deliver fifty thousand dollars of bonds of said county to the president and secretary of said railroad company, in exchange for fifty thousand dollars of the first mortgage bonds of said railroad company, so tendered as above provided. And whenever and so often as each five miles of said railroad shall have been graded, laid with ties and iron, said treasurer shall upon proof thereof, which proof shall be the certificate of the county surveyor to that effect, exchange with the said president and secretary of said railroad company fifty thousand dollars of said bonds of said Pima County for fifty thousand dollars'of said bonds of said company, for each five miles so completed, until the two hundred thousand dollars of bonds of said Pima County are exchanged for a like number of bonds of said railroad company.”

It is to be noted that under the provisions of these sections of the statute the bonds of the county were to be exchanged for the bonds of the railroad company under the condition therein provided, and it does not provide for a sale of the same. It is also to be noted that of the issue of two hundred thousand dollars of the bonds of the county, called for by the act, fifty thousand dollars was to be exchanged upon the organization of the company, and upon notice to the county of the company’s readiness to exchange a like amount of bonds the county was to deliver to the company bonds to the amount of fifty thousand dollars; that a like amount was to be delivered by the county treasurer to the company in exchange for a like amount of railroad bonds whenever the county surveyor should certify that five miles of the company’s railroad had been graded and laid with ties and iron, and thereafter, upon the completion of an additional five miles of said railroad as provided, the. county treasurer, upon proof thereof by the certificate of the county surveyor to that effect, should exchange a like amount of county bonds for the same amount of railroad bonds, until the' full issue ($200,000) of the county bonds had been exchanged fora like amount of railroad bonds. Under the act, therefore,, the question is narrowed to the inquiry as to whether each provision of the statute relating to the exchange, of bonds was. complied with by the railroad company, on the one part, and the officers of the county, on the other. The records of the-board of supervisors of Pima County show that on the twenty-sixth day of April, 1883, W. H. Culver, president of the Arizona Narrow-Gauge Railroad Company, addressed a letter to James H. Toole, chairman of the board of supervisors of Pima County, notifying the latter that the Arizona Narrow-Gauge Railroad Company was ready to exchange its bonds, for the bonds of the county in accordance with the provisions of the act of February 21, 1883. On May 5, 1883, as it appears in the minutes of the board, an order was made that two hundred thousand dollars of bonds of the county be issued, and be placed in the. hands of the county treasurer, upon the condition expressed that the Arizona Narrow-Gauge Railroad Company execute a bond to the county in the sum of five hundred dollars, conditioned that if the county bonds were not exchanged in accordance with the provisions of the act of February 21, 1883, the said railroad company would repay to said county all expense incurred in the issuance of said bonds. A receipt was introduced in evidence, dated August 3, 1883, and signed by one J. C. Elliott, then county treasurer, acknowledging the receipt from the. clerk of the board of supervisors of the county of two hundred bonds, of the denomination of one thousand dollars each, to be issued to the Arizona Narrow-Gauge Railroad Company as provided by law. It appears in evidence that the first exchange as provided by the act, of fifty thousand dollars county bonds for a like amount of railroad bonds, was made at some date during the year 1883. This is shown by the record in an-action brought by a taxpayer of the county against the board of supervisors and the county treasurer in'the district court of Pima County during the. latter part of the year 1883 to restrain the latter from accepting the bonds of the Arizona Narrow-Gauge Railroad Company in exchange for the bonds, of the county. It is also shown that these (bonds to the amount of) fifty thousand dollars were delivered -during the year 1883 to the railroad company by the county, by the minute entry of the board of supervisors, showing the action of the board taken with reference to an application filed June 16, 1884, by the railroad company, and an offer by the railroad company to return to the county fifty thousand dollars of county bonds and accept in full payment therefor county warrants of the face value of $22,500. It appears from the evidence that prior to the year 1886 the railroad company had expended in the construction of the road not to exceed twelve thousand dollars; that during that year the railroad company entered into a contract with one W. W. Walker wherein the latter undertook to complete the road in accordance with the act of the legislature and original intent of the company; that under this contract the county bonds held by the railroad company were turned over to Walker. It further appears that Walker represented the firm of Coler & Co., bankers and brokers of New York City; that under the Walker contract said Coler & Co. transmitted to the Bank of Tucson, for the building of the road, $52,900.40; that there was graded, and laid with ties and rails, ten miles of road by Walker under his contract; and that thirty miles in all was graded. It also appears that when the first five miles of road had been built the county treasurer turned over to Walker, for Coler & Co., under their contract with the railroad company, fifty thousand dollars of county bonds in exchange for a like amount of railroad bonds, and that subsequently, upon the completion of the ten miles of road, a like exchange was made of an additional fifty thousand dollars. George J. Roskruge testified that in 1886 he was county surveyor of Pima County, and examined the railroad constructed by the Arizona Narrow-Gauge Railroad Company; that he measured the road on two occasions, and found upon the first that there was five miles graded, laid with ties and rails, and upon the second found that there was ten miles of road graded and laid with ties and rails, and gave his certificate to the county treasurer upon both occasions, in the language of the act of February 21, 1883, stating the facts as he found them. It further appears that there was graded under the Walker contract in the neighborhood of thirty miles of road, but only the first ten miles of the road was ever laid with ties and rails; that for various reasons Walker or Coler & Co. either were unable to, or chose not to, complete the road. The records of the board cff supervisors show that in 1887 an agreement was entered into between the railroad company and Walker, on the one part, and the board of supervisors and the county treasurer, on the other part, whereby it was agreed that the county should sell to the railroad company and Walker one hundred and fifty thousand dollars of railroad bonds held by the county, to said railroad company for twenty-five cents on the dollar, and to receive in payment the bonds of the county at par; and the railroad company and Walker agreed to build and put into operation sixty miles of said road, and secure the majority of the trade of the town of Globe for the city of Tucson. There were other provisions in the. contract relating to the exchange of the remaining fifty thousand dollars of county bonds held by the treasurer in exchange for a like amount of bonds of the railroad, and the sale, of the latter to the railroad company upon the same terms as were provided in the contract for the bonds already exchanged. It further appears that this agreement was not complied with on the part of the railroad company or Walker, and that on July 23, 1890, the board of supervisors made an order, and transmitted the same to the county treasurer, directing the latter to cancel the remaining fifty thousand dollars of county bonds held by him. It further appears from the evidence in the case that nothing has ever been paid by the county in the. way of interest upon bonds of the county delivered to the railroad company.

Do these facts show that the bonds in question are included among those required by the act of Congress of June 6, 1896, to be funded? It must be conceded that the county of Pima derived little or no benefit from the building of the few miles of the Arizona Narrow-Gauge Railroad. However, there can be no question, under the proof, that the terms of the act of February 21, 1883, were fully complied with, both on the part of the county and, as well, on the part of the railroad company, in the matter of the issuance and exchange of the bonds, to the extent that the legislative act specifically provided. There was nothing in evidence showing bad faith on the part of the railroad company, in so far as the first exchange of bonds was concerned; nor is there any evidence which shows bad faith on the part of the company, or its contractor, Walker, and his principals, Coler & Co., except their failure to continue the building and equipment of the road after the completion of the thirty miles of grading and laying of ten miles of track, except such inferences as may be drawn from the fact that both the railroad company and Coler & Co. had difficulty in raising the money for the payment of the work done, and did not have the resources to go on and complete the work. Can the court say that notwithstanding the fact that the bonds were exchanged in compliance with the terms of the act of February 21, 1883, they are invalid, and not within the provisions of the act of Congress of June 6, 1896, because subsequent to their issue the original holders of those bonds failed to complete the railroad, and the county of Pima thereby received no benefit from the same ? The. question of a failure of consideration is to be distinguished from that of an exchange of bonds in good faith under the act of June 6, 1896, unless the failure of consideration was due to a failure on the part of the holders of the bonds to comply with the provisions of the act authorizing their issuance. The legislative act was exceedingly liberal in its terms, and contained no safeguard against the failure of the railroad company to build or operate the road. The only provision looking to the protection of the county was the one which required a certificate of the. county surveyor showing that each five miles of the road was graded and laid with ties and iron, as a condition precedent to the exchange of each fifty thousand dollars of county bonds for a like, amount of railroad bonds. As the supreme court has held in this case, Congress by the act of June 6, 1896, has validated the territorial act of February 21, 1883. And as the latter did not make the completion of the road a condition precedent to the issuance of the. bonds, nor make their validity dependent upon the subsequent conduct of the railroad company, bad faith cannot be predicated of the transaction, so long as there was not only a substantial compliance, but a literal as well, with the requirements of the act under which they were issued. We are forced to the conclusion, therefore, that no facts have been shown under the amended return which would warrant us in holding that the bonds in question were excluded from the provisions of the act of June 6, 1896, but, on the contrary, find that it is our plaiu duty, under the decision of the supreme court construing said congressional act, and mandatory upon us, to issue the writ of mandate prayed for, requiring the loan commissioners to fund the bonds in question, together with the interest due thereon, under the provisions of the act of June 25, 1890.

Street, O. J., Doan, J., and Davis, J., concur.