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erty, payable in equal annual installments during a period of five years. And thereupon the defending city caused to be executed and issued on the 1st day of September, 1891, bonds of said city for $54,739.80, comprising five equal series, designated as A, B, C, D, and E, each installment consisting of 11 bonds numbered from 1 to 11. Such bonds were sold in the market to provide the necessary funds to carry out such street improvement.

The following is a copy of one of such bonds, the others being the same except as to series and number:

“United States of America. Installment E "No. 1.

$1,000.00 “State of Wisconsin, City of Superior. Street Improvement Bond.

County of Douglas. “Know all men by these presents that the city of Superior in the county of Douglas, and state of Wisconsin, for value received, hereby acknowledges itself indebted to and promises to pay the bearer hereof the sum of one thousand dollars lawful money of the United States of America, to be paid on the 1 day of September A. D. 1896, with interest thereon at the rate of six per centum per annum, payable semi-annually on the first days of March and September in each year as evidenced by the semi-annual interest coupons hereto attached, as they severally become due; both the interest and principal of this bond being payable at the National Bank of the Republic in the city and county of New York.

“This bond is issued under and by authority of chapter 13 of the amended charter of said city of Superior, being chapter 124, laws of Wisconsin for the year 1891, approved March 31st, 1891, and of a resolution duly passed, approved and published by the common council of said city, dated the 25 day of August A. D. 1891.

"This bond is one of an issue of annual installment bonds the aggregate amount of which is fifty-four thousand seven hundred thirty-nine 80/100 dollars of which this bond is number 1 of installment E, said issue being divided into five equal installments designated installments A, B, C, D, and E respectively. Each installment consists of 11 bonds numbered from 1 to 11 inclusive. Numbers 1 to 10 inclusive being of the denomination of one thousand dollars and numbers 11 of nine hundred forty-seven 98/100 dollars.

"All bonds in installment A are payable on the 1 day of September A. D. 1892 and the remaining installments in the order in which they are above mentioned become payable annually thereafter on the 1 day of September in each year, so that the last installment, namely, installment E becomes due and payable on the 1 day of September A. D. 1896.

Said bonds are issued for the purpose of defraying the cost of constructing. the improvement on Belknap street between the Hammond avenue and West Seventh street and on account of such assessment, made upon the property benefited by reason of such improvement, as the owners have not elected to рау. The payment of the principal and interest of this bond is made chargeable upon the property benefited by said improvement, as evidenced by a statement and schedule of such special improvement, on which the bonds are issued, as recorded in the office of the city clerk of said city of Superior. And it is hereby certified and recited that all acts, conditions and things required to be done precedent to and in the issuing of this bond have duly happened and been performed in regular and due form as required by law. The faith and credit of said city of Superior is hereby irrevocably pledged for the prompt payment of this bond, both principal and interest.

"In testimony whereof the said city of Superior in the county of Douglas, and state of Wisconsin, has caused this bond to be signed by its mayor and city clerk, and countersigned by its comptroller, and the seal of said city to be hereto attached this 1st day of September A. D. 1891. “W. J. Dargis,

Martin Pattison, "City Clerk.

Mayor. “[Seal.] Countersigned: Lewis Larson, City Comptroller." Coupons representing installments of interest were attached, which are in the usual form.

That complainant purchased and now owns all the bonds of series "E,” aggregating $10,947.96. That by mutual agreement between the complainant and the defending city the payment of the principal of said bonds was extended until 1898. That said city regularly paid the interest upon said bonds up to the 1st day of January, 1901. That all the bonds of this issue have been paid except series “E,” which are the bonds in suit. That the city has collected a large part of the assessments pledged to the payment of these bonds from time to time, but has neglected and refused to pay the complainant's bonds or any part thereof, or any interest thereon, since the 1st day of January, 1901. That without the consent of the complainant the city has extended the payment of the special assessments on the property benefited by the improvement, and that two annual installments of such assessments amounting to $5,000 are still to become due. That said city has from time to time turned over to the county of Douglas these unpaid special assessments as delinquent taxes, in accordance with the laws of Wisconsin, which require the return of such delinquent special assessments at the same time and in the same manner as other taxes are returned. That said county of Douglas has from time to time collected considerable sums of money upon such special assessments so returned as delinquent, by sales of the property, by redemption thereof after sale, etc. That said county now has on hand in its treasury a considerable amount of money as the proceeds of such delinquent special assessments, which said county refuses to account for or pay over to the complainant in liquidation of said bonds. That the city of Superior has from time to time unlawfully and in fraud of the rights of this complainant encroached upon and appropriated the sinking fund which was created for the payment of the bonds in suit. That by resolution of the common council of said city such special assessment funds have been transferred to the general fund for various purposes. That by act of said conmon council said sinking fund so specially devoted to the payment of the complainant bonds has been rehypothecated for the payment of other improvement bonds, and that by various methods the city has dissipated and misapplied the fund which, by the terms of the bond in suit it undertook to keep and administer as a statutory trustee for the benefit of the complainant to pay the bonds in suit. That unless restrained said city will divert and misappropriate the balance of said fund still remaining in the city treasury, and the deferred payments of special assessments which are yet to become due. That when the city ceased the payment of interest on said bonds, the complainant elected, pursuant to the terms of said bond, to declare the same due and payable. That said bonds are in law a general obligation of said city, and that said city should be held in law to be a primary debtor as well as a statutory trustee. The bill sets up that before complainant purchased said bonds the Supreme Court of the state of Wisconsin had held said bonds to be a general obligation of the defendant city.

The complainant by his bill asks for an accounting to ascertain and determine the amount of money which the county of Douglas and the city of Superior have in their respective treasuries which ought to be applied to the payment of the bonds, and also the amount of such sinking fund that has been misappropriated; that the complainant recover the amount of all sums collected of or on account of said Belknap street assessment by said city, not heretofore applied to the payment of other bonds of the Belknap street issue. The bill contains a further prayer that said city of Superior be held liable for the whole amount of the complainant's bonds and interest, by reason of the general obligation of said city to pay said bonds and coupons as its general indebtedness, by reason of the city's misappropriation and conversion of said Belknap street assessments to its own use, and its failure to provide a fund in which said assessments should be set apart and reserved for the payment of said Belknap street bonds.

The bill prays recovery against the county of Douglas for the amount of the Belknap street assessment collected by said county, either directly or by the redemption of certificates of sale for such assessments. The bill contains a prayer for a temporary injunction restraining the city from paying out any further sum from the street bond sinking fund, except upon the complainant's bonds or coupons, from using or appropriating any moneys which may be hereafter collected on account of said Belknap street assessment, and that such injunction may be perpetual.

The county of Douglas demurs separately to the supplemental amended bill, on the ground, amongst others, that the bill is without equity as to the said county of Douglas.

The city of Superior separately demurs to the whole supplemental amended bill on various grounds, which will be stated in the opinion.

Chester B. Masslich and H. E. Ticknor (Eugene Dupee, of counsel), for complainant.

William R. Foley, for the county of Douglas.
Louis K. Luse, for the city of Superior.

QUARLES, District Judge (after stating the facts as above). The defendant county of Douglas was made a party to the amended bill of complaint, and then interposed a separate demurrer thereto. The court sustained the demurrer; but the complainant, having obtained leave of the court to file a supplemental bill, retained the county of Douglas as a defendant, and added certain new and additional averments.

The county again demurs to the supplemental bill. This demurrer must be sustained, upon the same ground upon which the former ruling was based, namely, that such supplemental bill presents no equitable cause of action against the county of Douglas.

The theory of the bill is that all proceeds from such delinquent special assessments as came to the treasury of the defending county belonged to the holders of such special improvement bonds; that the county as well as the city was its statutory trustee to collect these delinquent taxes, and should be held to account accordingly. I am satisfied that this theory is erroneous.

Complainant's contention is practically foreclosed by the Supreme Court of Wisconsin in the case of Sheboygan v. Sheboygan, 54 Wis. 415, 11 N. W. 598. It is elementary that the decision of the highest court of Wisconsin construing a Wisconsin statute will be followed by the federal court. By section 1114, St. Wis. 1898, it is expressly provided that such city taxes, when turned over to the county as delinquent, shall belong to the county and be collected for its use, and such section is applicable to cities. The city is entitled to credit for the total amount of delinquent taxes of every name and description as soon as the same are turned over. The court holds:

"The city by the return of its treasurer having transferred to the county the duty under the statute of enforcing payment of delinquent taxes on land, also passes to the county all interest in such taxes when collected, or interest in the land when sold for nonpayment of the tax, and should be credited with the amount of such taxes, payiug over the balance only to the city.”

Further on the court say:

"The return may include state, county, town or city, ward, school, or road tax, or any special assessment whatever, authorized by law. These are not separately returned, but all unpaid taxes of every description on a given parcel of land are massed, and the aggregate amount of all is alone stated in the delinquent return."

The principle of the statute is that the county, having given the city credit for the total amount of delinquent taxes, shall assume all such delinquent taxes of every nature which have been legally levied in the several towns and municipalities of the county which, like the defendant city, fall under the general statute; and the county reimburses itself out of the proceeds of the sales for such delinquent taxes, or out of the lands sold, in case the county is the purchaser.

By virtue of section 129 of the charter of the city of Superior, a rule is established as to improvement certificates, which has no application to improvement bonds, and this distinction is controlling. The section reads as follows:

"The comptroller's statement of the special assessment to be placed in the next tax roll shall include an amount sufficient to pay said certificates, with interest at the legal rate from the date of such certificates to the time when the city treasurer is required to make return of delinquent taxes, and thereafter the same proceedings shall be had as in case of other taxes, except that all moneys collected by the city treasurer, and all moneys collected by the county treasurer or county clerk on account of such taxes, shall be delivered or paid to the owner of the same on demand, upon the surrender of such certificates."

This section of the charter has been construed and commented upon by the Supreme Court of Wisconsin in State ex rel. v. Hobe, 106 Wis. 412, 82 N. W. 336. The court recognizes this special charter provision as constituting the county treasurer a statutory trustee for the holder of the improvement certificates. There is no similar provision relating to improvement bonds. The bondholder must look to the sinking fund in the hands of the city treasurer, upon which the bond is made a lien.

There being no contractual relations between the complainant and the defending county, and there being no statutory provision making the county treasurer an agent or trustee for the bondholder, the bill presents no equitable case against the county of Douglas, and as to it the demurrer must be sustained for want of equity, and as to said defendant the bill is dismissed, with costs.

Second. This brings us to the consideration of the demurrer to the whole supplemental bill interposed by the city of Superior. The grounds of demurrer are: First, that complainant has a plain, adequate, and complete remedy at law, and that there is no equity in the bill; second, that the bill is multifarious, in that it joins allegations and prayers for relief against the city of Superior for general liability on the bonds in question, with allegations and prayers for relief, and for an accounting and recovery of moneys collected by said city, and also by the county of Douglas upon the special assessment; third, that said bill is multifarious in that it joins, or attempts to join, causes of action at law with causes of action in equity; fourth, that the bill is multifarious in that it joins, or attempts to join, causes of action, allegations, and prayers for relief against the city of Superior, for the full amount of the bonds, as a legal liability in which the county of Douglas has no concern, with allegations and prayers for relief by way of an equitable cause of action to reach moneys collected by way of assessment by both city and county; fifth, that said bill is multifarious in that it joins causes of action and prayer for relief against the city of Superior upon its general liability upon the bonds, assuming such bonds to create a general liability, with allegations and prayers for relief that the city is not so liable, but is liable as trustee for collection, safe-keeping, and payment over of said special assessment; sixth, that said bill is multifarious in that it prays for alternative relief both in law and equity, which are on their face contradictory and inconsistent, and that there is a misjoinder of causes of action and misjoinder of parties defendant. Counsel on all sides have displayed such industry and learning in the argument of this cause, the court feels called upon to discuss the several contentions at somewhat greater length than it would ordinarily do.

155 F.-12

The first ground of demurrer requires but slight attention. The supplemental bill of complaint, as we read it, is properly planted in equity, and a court of law could afford no adequate relief in the premises. From the bill it satisfactorily appears that the city assumed

. the duty to create, administer, and distribute a certain fund derived from special assessments on certain real estate, which fund was pledged for the payment of these bonds; that thereby the city became a statutory trustee, bound to preserve this fund and administer it solely and exclusively for this special purpose; that in violation of this duty the defending city has by various methods particularly set out in the bill, encroached upon, appropriated, and misapplied the fund, and has neglected and refused to pay the bonds in suit that were made a lien upon such fund; that two installments of such special assessments, amounting to $5,000, are to become due, and that unless restrained the city will divert and misappropriate the same; that the city has, in violation of its duty, assumed to rehypothecate this fund for the security of other city bonds not connected with the bonds in suit, and that a portion of said fund has been applied upon such other bonds; that $12,000 has been drawn out to pay a bonus for the location of a normal school; that an accounting is necessary to ascertain the true amount of money the city has actually received which properly belongs to such fund, and how much has been unlawfully diverted therefrom. It is apparent that complainant is entitled to relief, which it is the peculiar province of equity to afford, and that a court of law would be powerless in the premises. The following cases cited by complainant's counsel treat of these principles in analogous cases: Vickrey v. Sioux City (C. C.) 104 Fed. 164, 166; Same case on appeal (C. C.) 115 Fed. 137; Farson v. Sioux City (C. C.) 106 Fed. 278.

Is the bill multifarious ? This case does not fall within the definition of multifariousness usually adopted. Certainly not under the test applied by the Circuit Court of Appeals for this circuit in Von Auw v. Chicago T. F. Co. (C. C.) 69 Fed. 448. There can be no pretense that this bill embodies two distinct causes in equity either one of which might sustain a separate bill, and this seems to be the test usually applied. The real objection seems to be that there is a misjoinder of two causes of action which are not compatible, because one is legal in its nature and the other is equitable. In other words, the complainant insists that by the terms of these bonds the city of Superior is a primary debtor as well as a statutory trustee; that its faith and credit have been pledged generally for the payment of the bonds, and he has included in his prayer a demand for a money judg. ment.

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