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In Duplex Printing-Press Co. v. Campbell Printing-Press, etc., Co., 16 C. C. A. 220, 69 Fed. 250, we said:
"The motion for a preliminary injunction necessarily involved the exercise by him (that is, of the judge below) of a sound judicial discretion in granting or withholding it.
We are to consider the correctness of the order from the same standpoint as that occupied by the court granting it; and if we find, after a consideration of the grounds presented to that court for its action, that its legal discretion to grant or withhold the order was not improvidently exercised, we should not disturb its action."
See, also, Blount v. Societe Anonyme Du Filtre Chamberland Systeme Pasteur, 6 U. S. App. 335, 3 C. C. A. 455, and 53 Fed. 98; American Paper Pail & Box Co. v. National Folding Box & Paper Co., 1 U. S. App. 283, 2 C. C. A. 165, and 51 Fed. 229.
After a consideration of the evidence presented to the court below, we do not find that the evidence makes such a case for the complainant below as to justify a finding by us that the sound judicial discretion of the court in granting or withholding a preliminary injunction was improperly exercised. We reach this conclusion without prejudice to the issue now pending in the court below, and which may be brought here on appeal from a final decree below, presented on fuller evidence and on its merits. The appeal is dismissed, at the costs of the appellant.
CITY OF GLADSTONE V. THROOP.
(Circuit Court of Appeals, Sixth Circuit. December 3, 1895.)
1 MUNICIPAL CORPORATIONS-MICHIGAN STATUTES.
The Michigan statute of 1875, granting and defining the powers of villages (How. Ann. St. c. 81), applies to villages incorporated after its passage, under the general act of 1857 for the incorporation of villages, as well as under special acts, and, as to such villages, supersedes the pro
visions of the act of 1857. 2 SAME-BONDS_VALIDITY.
The village of G., Michigan, had power, under the statutes of that state, to grade and improve streets, to assess the cost of such improvements upon abutting property, and to issue bonds in anticipation of the collection of such assessments, which, when collected, should be applied in payment of the loan. The village directed the paving of a certain street, and assessed the cost of the improvement on the abutting property; but no preliininary resolution was passed fixing the improvement and assessment district, the assessment was never confirmed by a two-thirds vote of the trustees, and other formalities required by statute were neglected in making the assessment. Subsequently, after the acceptance of the work, and in order to pay the contractor, the village issued bonds, used a part of the money received from the sale in paying the contractor, and, having paid him the balance due from the proceeds of the assessments, used the remainder of the proceeds of the loan in paying certain other bonds which were properly chargeable to its general fund. Held, that the failure to comply with the formalities in making the assessment, though it might have rendered the assessment void if objected to by property owners, constituted no defense to the bonds; such assessment having been collected and the proceeds thereof or of the bonds having been diverted to an improper purpose.
Held, further, that in the absence of evidence of the assessed value of the property in the assessment district it would be presumed, in support of the validity of the bonds, that a statutory limitation of the assess-, ment to 5 per cent. of such value had not been exceeded, it appearing that the total valuation of the village was such that 5 per cent. thereof would largely exceed the amount of the bonds, and that more than the amount of the bonds had been collected from the assessment without ob
jection. 4 SAME-DEFENSES.
A failure to comply with a requirement of the statute authorizing the issue of bonds by a municipal corporation, that such bonds shall state on their face the class to which they belong, does not constitute a legal defense to an action on such bonds when they represent a valid indebted.
ness. 6. SAME.
It is no defense, to an action upon bonds of a municipal corporation in the hands of an assignee without notice, that an illegal contract was made for the payment of a commission upon the sale of such bonds to an officer of the corporation, the first purchaser thereof, such commission never hav.
ing been actually paid. 6. SAME-AUTHORITY TO BORROW MONEY.
When a municipal corporation is authorized to borrow money for the prosecution or completion of a public work, a loan effected after the completion of the actual work, in order to comply with the contract of the corporation with the persons who did it, is within the spirit and meaning of the statute giving such authority.
In Error to the United States Circuit Court of the Western District of Michigan.
This was an action by Benjamin H. Throop against the city of Gladstone to recover the principal and interest on tive bonds, each of which was of the form following:
"United States of America, State of Michigan, Village of Gladstone. "No.
$2,000.00 “One year after date, for value received, the village of Gladstone promises to pay to Exchange Bank, Gladstone, or bearer hereof, the sum of two thousand dollars, in lawful money of the United States, at the office of the village treasurer of the said village, with interest at the rate of seven per cent. per annum, payable semiannually, as shown by and upon the annexed coupons, as they severally become due. This bond is one of a series of five bonds of like tenor and date, issued for the purpose of raising money for the payment of local improvements, voted by the legal qualitied voters of the said village, at the annual election of the said village, duly called and held on the 6th day of March, A. D. 1888, and in conformity with Act 62 of the General Laws of 1875. The faith and credit of the village of Gladstone are hereby pledged for the punctual payment of the principal and interest of this bond. In testimony whereof, the undersigned officers of the village duly authorized to execute this obligation in its behalf have hereunto set their signatures this first day of November, A. D. 1888. "(The Village of Gladstone. Incorporated 1887. Delta Co., Mich.)
"Jas. J. Miller, Village President. “Attest: Robert W. Davies, Village Clerk.”
Attached to each bond was a coupon for six months' interest. The defendant, the city of Gladstone, which had succeeded to the obligations of the village of the same name, made the defense that the bonds were void because issued without statutory authority and without the necessary vote of the people. The plaintiff had paid full value for the bonds before they fell due, without other notice of the circumstances of their issuance than what was contained in the recital of the bonds, and in the following certificate of the village clerk:
"Office of the Village Clerk.
“Gladstone, Mich., Nov. 1st, 1888. "Certified copy of proceedings of the village council as to their authority and the regularity of issuance of bonds to pay for local improvements:
“ 'Council Meeting, Feb. 13th, 1888. “ 'On motion the petition for paving both Delta and Minnesota avenues, signed by property owners, was adopted, and it was resolved that the question of bonding the village for the sum of ($15,000) fifteen thousand dollars for the purpose of raising funds for paving and curbing be submitted to a vote of the people as soon as may be, and in accordance with the laws of the state of Michigan. Said bonds to bear interest at the rate of seven (7 %) per cent. per annum, payable semiannually, at the office of the village treasurer of Gladstone.'
“ 'Council Meeting, March 6th, 1888. “ 'Result of election as to paving Delta and Minnesota avenues and issuing bonds to the amount of ($15,000) öfteen thousand dollars was presented, and same ordered filed. Vote standing: "For bonds, 133; against bonds, 28." !
'Council Meeting, March 19th, 1888. “ 'Moved by Trustee Wilson that the expense of paving Delta avenue be assessed to the abutting property by the assessor at the time of the regular assessment, and that the same be spread upon the tax roll and collected at the same time and manner as the general tax. Carried. Call of ayes and nays.'
" 'Council Meeting, Oct. 29th, 1888. “Moved by Trustee Allen that the pavement of Delta avenue be accepted from D. J. Kennedy, contractor. Carried.'
Council Meeting, Oct. 30th, 1888. “ 'On motion of Trustee Buchanan, the committee of five, of which the president is chairman, appointed to arrange for funds with which to pay D. J. Kennedy, contractor of Delta avenue pavement, is hereby authorized to issue ($10,000) ten thousand dollars of bonds, being five bonds of ($2,000) two thousand dollars each, payable in one year after November 1st, 1888, bearing interest at seven per cent. per annum, payable semiannually, same bonds to be signed by the village president, attested by the clerk, whose actions are hereby confirmed. Carried on call of ayes and nays.'
"I hereby certify that the foregoing is a true and correct copy of the proceedings of the village council as appears from the records. "[Village Seal.]
Robert W. Davies, Village Clerk.” The facts shown by the village records were as follows: The village of Gladstone was incorporated in November, 1887, under the general provisions of chapter 82 of Howell's Annotated Statutes, which was enacted in 1857 and entitled "An act for the organization and incorporation of villages." In February, 1888, a petition of property owners was tiled with the council asking that Delta avenue be paved. The petition was accepted, and an ordinance for paving the street was passed. In March, council passed a resolution assessing the expense of paving Delta avenue to the abutting property holders, same to be spread on tax roll and collected at same time and manner as general tax roll. Bids were advertised for, and the bid of Kennedy was accepted. The contract was made accordingly in May. In July the assessment roll was approved and placed in hands of marshal for collection. An additional assessment of two dollars was imposed on lots abutting on Delta avenue. The work was done and accepted on October 29th. On October 30th, at a meeting of council where all members but one were present, a committee was appointed to arrange to secure funds to pay contractor, and authority was given to issue the five bonds of $2,000 each here in suit. The bonds were sold to one McKinney, who was cashier of Exchange Bank, and also treasurer of the board, with an agreement to pay him 5 per cent. commission, which never was in fact paid. The money for the bonds was paid: $1,000, November 23, 1888; $2,000, January 1, 1889; $2,000, February 1, 1889; $2,000,
February 28, 1889. There were collected from assessments: In December, about $10,000; in January, 1889, about $300; and in February, about $6,000. The total of assessments and proceeds from bonds amounted to $27,448.84. After paying the contractor what was due, there was left a balance of $6,069.43. This sum was devoted by the city council to take up $6,500, face value, of village bonds issued to pay for paving the street intersections on Delta avenue. These were a different series of bonds from that here in suit, and the circumstances of their issue were as follows: In February, when a petition from the property holders was filed in council praying for the improvement of Minnesota and Delta avenues, the committee to whom it was referred recommended that it be granted, subject to the action of the voters of the village in authorizing the issue of bonds to pay for the paying of the street intersections on both avenues. Accordingly the council granted the petition, and also resolved “that the question of bonding the village to the amount of fifteen thousand dollars for the purpose of raising funds for paving and curbing the street intersections in Delta and Minnesota avenues * * * be submitted to a vote of the village as soon as may be, and in accordance with the laws of Michigan. *
The council passed a resolution in favor of bonding the village for this purpose. The election was held on March 6, 1888, and resulted in vote of 135 for the bonds and 28 against bonds. On June 4, 1888, the council passed the following resolution: "Whereas, it appears that the $15,000.00 of bonds authorized to be issued by this board by its resolution of February 13, 1888, is in excess of the amount allowed by the statute of this state: Therefore be it resolved, that instead of said amount there be issued bonds under the authority of the election held March 6, 1888, to the amount of $6,500 in lieu of the amount previously voted." The theory upon which this correction was made was that the power of the village in such a case was limited to an issue of bonds to be paid by general taxation, not to exceed 2 per cent. of the total assessed valuation of the property in the village, which was $379,800. These bonds were issued, and the proceeds were used to pay the amount due from the village to the contractor for intersections on Delta avenue. When they fell due, as already stated, instead of paying them by levying a general tax, as provided by law, the council ordered the treasurer to take them up with the $6,069.43 surplus in the Delta avenue paving fund created by the issue of the $10,000 of bonds here in suit. The certificate of the village clerk exhibited to the plaintiff was, therefore, incorrect, in the statement that the issuance of the $10,000 of bonds here in suit was voted for by the people. The vote was only upon the question of issuing intersection bonds. The learned judge at the circuit, at the close of the evidence, directed the jury to return a verdict for the plaintiff, on the ground that the council had authority to issue the bonds without a vote of the people, and that, even if the statutory requirements had not all been fulfilled to render the bonds valid as such, the village, and its successor, the defendant city, were liable for money had and received to its benefit from plaintiff's assignee.
Alfred P. Smith, for plaintiff in error.
Before TAFT and LURTON, Circuit Judges, and SEVERENS, District Judge.
TAFT, Circuit Judge (after stating the facts). It is first necessary to determine which of the statutes of Michigan conferred and prescribed the powers of the village of Gladstone when the bonds
ere in question were issued. In 1857 the legislature of the state enacted a general law providing for the organization and incorporation of villages by county boards of supervisors. This law was amended in 1859, in 1863, and in 1869, and as thus amended was incorporated in the Compiled Laws, and in Howell's Annotated Statutes as chapter 82. It was under this chapter that the village of
Gladstone was incorporated in 1887. The chapter provided a mode by which, upon the petition of citizens living within the limits of the proposed village, any territory having not less than 300 inhab: itants might be organized and incorporated into a village, with the powers defined in the act, and with boundaries fixed in the petition and approved by the supervisors. Power is given in section 2999 to the president and board of trustees to improve streets, and to provide for defraying the cost of the same by assessments upon the abutting property, "provided that no pavement of streets or highways shall be ordered or made until submitted to and approved by a majority of the legal voters of such village, expressed by ballot at a general village election or special election called for the purpose." This power was conferred by the amendment of 1859. No authority is given by chapter 82 to villages to borrow money or to issue bonds, and the bonds in suit were issued without lawful authority unless the provisions of chapter 81 of the same statutes have application to villages incorporated under chapter 82. Chapter 81 is merely the compilation of an act of the Michigan legislature, passed in 1875 and entitled “An act granting and defining the powers and duties of incorporated villages." It provides, in its first section, “that all villages hereafter incorporated shall be subject to the provisions of this act." As the village of Gladstone was incor. porated after 1875, the inference would seem clear that it was subject to the provisions of the act; but the argument is pressed that by its subsequent sections the act of 1875 can only apply to villages in. corporated by special act. Thus section 2 provides that the boundaries of the village, the time and place for the first election therein, the time and manner of registering voters, and the manner of giving notice of such election shall be provided for by the special act incorporating such village.” This language, it is insisted, excludes the application of the chapter to any villages but those incorporated by special act. But section 5 of the act repeats the very general language of the first section as follows:
"All villages hereafter incorporated shall be bodies politic and corporate under and by the corporate name assumed by or designated for them as hereinbefore provided and by such name may sue and be sued, contract and be contracted with, acquire and hold real and personal property for the purposes for which they were incorporated, have a common seal, and change its Dame at pleasure, and exercise all the powers in this act conferred.”
We do not think that the words of section 2 can be held to qualify the very sweeping language of the first and fifth sections. All that section 2 was intended to declare was that the details mentioned therein were not to be fixed under this act, but under that act by which the particular village should be incorporated. Such details were fixed by the petition and approval of the board of supervisors in the case of villages incorporated under chapter 82 or the act of 1857. It must be borne in mind that Howell's Annotated Statutes of Michigan, as well as the Compiled Laws of 1871, were mere official compilations or arrangements of laws which took their force from their original enactment. Stewart v. Riopelle, 48 Mich. 177, 12 N. W. 36. They are not revisions, in which all the parts are to