Young v. City of Broken Bow

Fawcett, J. This suit was instituted in the district court for Ouster county upon three judgments obtained by the Broken Bow Water-Works Company against the city of Broken Bow in the years 1892, 1898, and 1894, respectively, and thereafter assigned to plaintiff; all of said judgments now being dormant. From a judgment in favor of defendant, plaintiff appeals. The controversy between the water-works company and plaintiff, as the assignee of its judgments, and the city has been considered by this court on four different occasions: State v. Royse, 8 Neb. (Unof.), 262, 269, 71 Neb. 1, and City of Broken Bow v. Broken Bow Water-Works [471] Co., 57 Neb. 548. For a history of the controversy reference is made to those opinions. One of the defenses interposed by the city is that all of the judgments are barred by the statute of limitations. Counsel for defendant abandons this contention in his brief, and concedes that under the authority of Snell v. Rue, 72 Neb. 571, this defense must fail. The next defense is that the first and third judgments are void for want of jurisdiction of the court over the defendant when they were rendered. To this defense plaintiff pleads City of Broken Bow v. Broken Bow Water-Works Co., supra, as res judicata. We think this plea is good and that the validity of the judgments in controversy cannot again be inquired into. The next defense, and the one which counsel for defendant characterizes as “the principal defense in this case,” is based upon the proposition that the city has fully discharged its obligation under its contract with the water company for the amounts agreed to be paid for hydrant rentals; that, the judgments being for hydrant rentals, they too are satisfied and discharged; and that the city has exhausted its debt-paying power with respect to its hydrant rentals under its contract with the water company. We do not deem it necessary to consider all of the arguments pro and con upon this point, but leave them to be considered, should they ever subsequently arise, in an action under issues properly framed and which squarely present such questions, which we do not think is true in the present case. The only question which we deem material to decide at this time is the right of the plaintiff to have a revivor of his dormant judgments. Section 9 of the contract entered into between the city and the water-works company provided: “In consideration of the benefits which shall be derived by the said city and its inhabitants, * * * the city of Broken Bow * * * hereby promises and agrees to pay rent for the said 30 hydrants at the rate of $85 per annum, for each and every hydrant, '* * * in semiannual installments, bn the [472] first Tuesday of May, and first Tuesday in November, in each and every year during the said term to the .said grantees, their heirs and assigns.” The contract was entered into in 1888, and was to run 25 years. Section 6 of the contract provided: “A sufficient tax, not exceeding seven mills on the dollar, shall be levied and collected annually upon all taxable property upon the assessment roll of said city, to meet the payments under this ordinance, when and as they shall respectively mature during the existence of any contract for hydrant rentals, and shall be levied and kept as a separate fund known as the ‘water fund’ and shall be irrevocably and exclusively devoted to the payment of hydrant rentals under this ordinance, and shall not be otherwise employed.” On April 1, 1904, the city acquired the water plant through a sale by the master in chancery in a suit pending in the United States circuit court for the district of Nebraska, and since that time has controlled and operated the same. Upon the trial of this case it was stipulated as follows: “It is admitted that each and every year during the existence of the water-works company and while it maintained and operated the plant and until the sale to the city of Broken Bow, April 1st, 1904, there was levied annually by the proper authorities a tax of seven mills on. the dollar assessed valuation, such levies being for and designated as hydrant rental, the same being levied for the purpose of paying hydrant rentals. “It is stipulated, subject to such objections as may be interposed, that at the time of the acquisition of the Broken Bow water-works system by the defendant, the city of Broken Bow, there Avas on hand in said treasury in hydrant rental fund derived from the seven-mill leAry which had been levied annually theretofore $1,566.59, which fund or amount was retained and used by the city; that all other moneys realized from the seven-mill levy, from the beginning of the operation of the water-works plant until its acquisition as aforesaid by the defendant [473] city, had been collected and applied in satisfaction of the hydrant rentals dne under the franchise contract entered into between the city and the water-works company.” It appears from the above stipulation of facts that the defendant city, at the time it acquired the water-works, had in its possession $1,566.59, derived from the seven-mill levy which had been theretofore annually levied. There is no claim that this money has ever been paid over to plaintiff. Counsel for defendant undertakes to justify the city in holding this money by stating that “the deed from the master in chancery in the foreclosure sale under the order and decree of the court conveyed to the purchaser, not only the plant and system, but also, ‘all rights, interest, title, claim and demands of every name and nature which have in anywise come to the said Broken Bow Water-Works Company, or in anywise arisen under a certain ordinance of the city of Broken Bow, passed on the 23d day of April, 1888, and all debts, dues, rentals, claims and demands of every name and nature however, arising against the said city, whether such have heretofore accrued and are now existing, or may at any time hereafter accrue to said company.’ The conveyance from the purchaser at foreclosure sale to the city contained likewise the same provisions as hereinbefore referred to.” To our minds this is a very unsatisfactory pretext under which to claim the right to retain over $1,500 which defendant admits was collected under the seven-mill levy, and which under its contract with the water company it agreed should be “levied and kept as a separate fund known as the ‘water fund’ and' shall be irrevocably and exclusively devoted to the payment of hydrant rentals under this ordinance, and shall not be otherwise employed.” Plaintiff had, with the full knowledge of the city, become the ' owner of the three judgments long prior to the commencement of the foreclosure proceedings in the federal court. He thereby became entitled to receive all hydrant rentals derived fro.m the seven-mill levy. Such rentals, as soon as collected, became a trust fund to “be irrevocably and ex [474] clusively devoted to the payment” of his judgments. The simple fact that the water company was unable to meet its obligations and its property Avas sold to meet the same ought not to, and does not, prevent plaintiff from now insisting that the city pay over to him moneys which the city had collected under the laAV and under its contract with the water company, and which, the moment it was collected, became a trust fund for the specific purpose, “irrevocably,” of paying the water company, or its assignee, what the city OAved for hydrant rentals. When it purchased the water-works system from the grantee of the receiver, it knew that it had this money, and that the money constituted a trust fund to be applied as. above indicated; and the stipulation quoted from the receiAcer’s deed in no manner relieves it from its liability therefor. The other questions argued in the briefs and at the bar are important questions, which we now think we made a mistake in permitting the parties to press upon us in this action. They are questions which it is not necessary, nor proper, to decide at this time. This action is, to all intents and purposes, one to revive dormant judgments, and Avill be so treated. The only questions we are called upon to decide are Avhether the judgments are void, and, if not, wliether or not they have been paid. That they are valid judgments is res judicata; that they have not been paid is conceded by the stipulation above set out. Hence, the judgments ought to be revived. The judgment of the district court is therefore reversed and the cause remanded, with directions to enter judgment of revivor of the three judgments in controversy. Reversed. Reese, C. J., not sitting. Rose, J., dissenting.