GEORGE V. RA.LLS OOUNTY.
647
QEORGE
v. RALLS
COUNTY,
and another, Garnishee.
(Circuit Oourt, E. D. Mi88ouri. September 24,1881.) 1. ACT OF 'FEBRUARY 19" 1875, OF MISSOURI, CONSTRUED - !IUNICIPAL BONDSCIilNSTI!l'UTIONAL LAW-INFRINGING THE OBI,IGATION OF CON'fRACTS.
A county levied and collected taxes for the purpose of paying'interest on eel" tain' bonds issued by it, and thereafter litigation arose as to their validity, and an act was passed by the state legislature authorizing the county court to loan the fund collected, but not specifying the time for which loans might be made. A ldart Was made 'for four' years to A. Before the expiration of that time a bondhblderreoovel'ed final judgment against, the county, execution was issued, and A. was served with a writ ofgarnishmeIit. The garnishee answered that the debt from b,:er to the county was not due, and stateli the facts. It was held: (1) that said aqt O\I).ly. author}:,;ed the county court to invest the fund in ques-, to call, or until the litigation was concluded; (2) that if construed tion to authorize loans for a longer period it would infringe the obligations of the county's contract with its bondholders, and be unconstitutional; (3) that said flj.nds, wpen paJd into ,the county treasury, became. trust funds for the payment of interest upon said bonds, and that it was the .duty of the comity authorities to apply them to that purpose as soon as the bonds were held valid; (4) that A. should be pl'esumed to have known the provisions of the statute under which the loan was made, and that the plaintiff was entitled to judgment against her for the !?um borrowed, and any thereon which mIght be unpaid.
Overall, Judson rt Tutt, for plaintiff. H; A. Ounningham, for defendant. MCCRARY, C. J. Execution was issued upon a judgment rendered in this court on the twenty-first day of October, 1878, in favor of the plaintiff and against Rallt! county. Under that execution Nannie P. Mitchell was served with process of garnishment. The garnishee files an answer, from which it appears that on or about the twentieth day of June, 1880, she borrowed of the county of Ralls $400, payable four years after date, with interest at the rate of 6 per cent. per annum, and gave, in payment of such loan, a bond as follows: "BOND FOR TIIE PAYMENT OF RAILROAD FUNDS.
"Know all men by these presents, that we, Nannie P. Mitchell, as principal, and E. P. Ralls and George E. Frazer, Jr., as securities, jointly and severally bind ourselves and onr respective heirs, executors, and administrators to the county of Ralls, state of Missouri, in the sum of four hundred dollars, to be paid to said county for the use and benefit of the St. Louis & Keokuk Railroad interest fund of said county, to the payment whereof we jointly and severally bind ourselVeS, our heirs, executors, and administrators firmly by these presents. Sealed with our seals and dated the twentieth day of June, A. D. 1880. "The conditions of this bond are that whereas the said Nanllie P. Mitchell, principal, has this day borrowed from said county the sum of four hundred dollars, belonging to the railroad interest fund of said county, which said sum
648 of money the said principal and securities agree and promise to pay to said county, for t4e use and benefit of railroad interest fund, on or before the twentieth day of June, A. D.1884, with interest thereon from the date hereof at the rate of 6 per cent. per annum, said interest to be paid annually on the twentieth day of June of each and every year until the whole debt shall be fully paid off and discharged: now, therefore, if the principal and sureties shall well and truly pay, or cause to be paid, the said sum of money borrowed, and the interest thereon, according to the tenor and effect of this bond, then this obligation shall be void, otherwise it shall remain in full force. But it is expressly agreed and understood that all interest not punctually paid when due shall, when due, be adl1ed to the principal, and shall bear interest at same ute as the principal until paid; and it is further agreed and understood, as a condition of this bond, that should default be made in the payment of interest when due, or should the said principal to this bond fail to give additional security hereto when lawfully required, in either case both the principal and interest shall become clue and payable forthwith."
The answer of the garnishee proceeds to state that said bond was signed, sealed, and delivered by the said garnishee and her said security into the hands of the treasurer of Ralls county; that said bond is not due, and the said money borrowed by the said garnishee from said county conrt of Ralls county is not due; that at the time of the service of the garnishment upon her she did not owe the defendant any money, nor does she owe the defendant any money now, unless the court shall adjudge that she owes the defendant upon the bond executed as above, and the statement and recitals of facts above made. Upon the filing of this answer plaintiff moved for judgment upon the ground that it sufficiently appears from the answer that the money loaned to the garnishee was money which had :been paid into the county treasury for the benefit of the St. Louis & Keokuk Railroad interest fund, and therefore money which should now be applied upon the plaintiff's judgment, the judgment having been confessedly rendered upon bonds issued to aid in the construction of that railroad. On the other hand, the garnishee insists that she is not liable to pay said loan to the county, or to be required to pay it to plaintiff, until the expiration of the four years within which, by tho terms of the bond, she was to make payment. The fact appears to be that certain taxes were collected by the anthorities of Ralls county under a law of the state for the purpose of paying the interest upon certain bonds issued by the county to aid in the construction of the St. Louis & Keokuk Railroad. After tho collection of said taxes, litigation arose as to the validity of the honds, and thereupon the legislature autllOrized and required the county
GEORGE V. RALLS COUNTY.
649
court to loan or invest the money in the county treasury ai'ising from such taxes. This was done' by the act entitled"An act to authorize the several county courts in this state to loan out or invest certain moneys," approved February 19, 1875. Laws of Missouri, 1875, p.44. The first sectIOn ot that act is as follows: "That the several county courts of this state be and they, are' hereby authorized and reqnired to loan O\lt any money in the hands of the treasurer of such county collected to pay interest on the bonds of such county issued to any railroad company, and which has not been applied in the payment of such interest, in any case where, such bQuds arc or may be in litigation, or the validity of which is, at the time, being contested by judicial proceedings, at the highest rate of interest that can be obtained, not exceeding 10 nor less than 6 per cent."
It will be observed that the statute does not, in express terms, limit or fix the period for which the funds referred to may be loaned or invested. It is manifest that the funds, when collected and,placed ill the county treasury, became trust funds for the payment of interest upon railroad bonds, aud that it was the duty of the county authorities to apply such funds to that purpose the moment it was determined, by a final adjudication, that the bonds were valid and the taxes lawfully levied and collected for their payment. It was proper enough for the legislature to authorize the county authorities to invest the funds pending the litigation, provided they made no contract having the effect of tying them up and keeping them out of reach of the bondholders after the litigation concluded. If the act of the legislature were construed to authorize the 'county courts to loan these funds for an indefinite period of time, at their discretion, it would clearly have the effect of impairing the obligation of the contract between the county and the bondholders; for the plain meaning of that contract unquestionably was that the holders of the bonds were to have a vested right to payment out of any taxes levied and collected and paid into the for that purpose. If the county courts can invest funds of this character for a period of four years, as aga.inst a bondholder who may recover final judgment before the expiration of that period, they can invest them for 10, 20, or 40 years, and thus indefinitely postpone the payment of their obligations. The act must, therefore, be construed as anthorizing the county courts to invest the funds in question subject to call, or until such period as they may be needed to pay valid and legal obligations, for the pa.yment of which they were raised.
650
FEDERAL riEPORTER.
The answer of the that she was fully advised as to the nature and character of the' bond which she borrowed, and Bile must be presumed to have known the provisions' of the statute under which the loan was made. It follows that the plaintiff entitled to judgment against the garnishee, upon the ans!'er as it stands, for the Bum of $400 and any interest which may appear to be unpaid. TREAT, D. J., concurs.
is
'WOOLRIDGE,
Assignee, eta.,
V., McKENNA
and others. '
(Uircuit Court, W. D. l'enT!-e88e8. August 22, 1881.) 1. REMOVAL Oll' CAUSEs-TIME OF FILING TRANSCltIPT-MANDATORY AND DIRECTORY STATUTES-ACT OF MARCH 3, 1875, § 3-18 ST. 470-JURISDICTIONAMENDMENTS-REVISED STATUTES, §§ 948, 954. The provision of· the act of March 3, 1875; § 3, requiring, the transcript of the record of the state qourt to be filed on the first day of the next succeeding term of the federal court, is nf,>t mandatory, as a condition precedent to the jurisdiction of the federal court, but is directory only, as a mode of practice. The statute should be strictly obeyed, but the court, un'der the Revised Statutes, §§ 948, 954, may, and on good cause shown should, enlarge the time for filing, or cure the defect by allowing the tra'nscript to be filed nunc pro tunc. 2. SAME SUBJECT:"--INFANT DEFENDANT-How HIS BE lUMOVED-GUARDIAN-GuARDIAN AD LITEM-NEX'f }<'RTEND-CITIZENSHIP. Where the necessary jurisdictional facts exist, an infant defendant may remove his suit into the federal court as any other defendant may, and the petition for rcmoval and bond may be filed in his behalf by his regular guardian, the guardian ad litem, or a next friend, as4he case may be. The citizenship of the infant determines the jurisdiction, and not the citizenship of the guardian or next f1':end. 3. SUB':.J:cT-HoWlNFANT DEFE1"DANT IS BROUGHT IN- SERVICE OF PROCESS--SUBSTI'l'UTED PROCESS-PUBLICATION-PUACTICE IN REMOVED CAUSES WHERE THE IS AN, INFANT. e There is' no mode known to 'the' practice of the federal courts in removedcauses oy which an absent infaI\t defendant can be served with process, or brought into court by substituted process, by publication, or otherwise; and as , an infant cannot voluntarily appear or waive process, nor can anyone until process served voluntarily appear for him, it is prematnre for a guardian or next friend to remove the cause until the infant defendant has been, by proper service of process directly, or by substitution, brought into the state court, or until by the state laws some one authorized to enter his appearance luis appeared for him in that court. He cannot, nor can anyone for hini;under the authority of the state laws, al)pear in tho federal court, and hiB representative must defer the infant been properly hound to defend in the state court. Heid, th{:rBjore, where the father of an absent infant defendant appeared in thestate'court, and, as next friend, filed a petition and bond for a removal before' there had !:een any service of process or publication according to the state laws to bring in the infant I that the cause must be romullJed for want of jurisdiction over the person of the infant.