BREWIS V. CITY OF DULUTH AND VILLAGE OF DULUTH.
location or its methods, was injurious to the public health, they could regulate, or, if in their judgment the public health required, abolish it; that the grant 1S voidable and not void; that it is valid until the power, be it the legislature or the municipal officers in which is vested the function to deal with sanitary matters, finds it to be injurious. The conclusion is that where, as here, the proper authorities find the place and manner of conducting the complainant's business to be harmless, there exists no power, either in the legislature or the people of the state, to abate it. So, according to the cases which have gone the furthest, so long as the place and manner of the complainant's slaughtering of animals are sanctioned by that organ of the government of the state in which is vested the police power with reference to that subject-matter, the action of the legislature in making the grant stands for that of the people of the state, and the exclusiveness of the right granted is protected by article 1,§ 10, of the constitution of the United States. The Br.idge Proprietors v. The lloboken Go. 1 Wall. 116.
(Circuit Court, D. Minnesota. December 13,1881.)
EQUlTABJ,E RELIEF""': CREDITOR'S BILL.
MUNICIPAL CORPORATIONS FORMED OUT OF ONE-
The rights of creditors of the city of Duluth considered, with reference to the act of the legislature of the state of Minnesota, by which the. village of Duluth was created out of a part of the territory of the city of Duluth, and the indebtedness of the city apportioned between them, and the allegations of fact in .plaintiff's bill, and held, that such act-such allegations being true-interferes with the rights of creditors, and that a bill in equity will lie, by a creditor of the city at the time the act was passed, against the village, to enforce the payment of its proportionate share of the indebtedness; the share of the indebted. ness for which each is liable being in the ratio of the taxable property of one to that of the other.
In Equity. Demurrer to bill of complaint. This suit is brought against the city of Duluth and the village of Duluth to recover the coupons overdue upon bonds of the city of Duluth, in this district. A demurrer is interposed by the village of Duluth. G#man rt Olough, for demurrer. Williams rt Davidson, contra. NELSON, D. J. The complainant is the owner of certain bonds under an act of the legislature of MinnesQta, approved March
8, 1873, authorizing the city of Duluth to fund the debt previously incurred for improving the harbor, and for other purposes. The bonds were payable in not less than 20 nor more than 80 years from the date of their issue, and bear interest at the rate of 7 per cent. per annum, payable semi-annually in the city of New York. The complainant became a bona fide holder of the bonds and coupons previous to 1875. It appears that on February 23, 1877, the legislature of the state of Minnesota created the village of Duluth out of 8J part of the terri· tory of the city of Duluth, under an act entitled "An act to create the village of Duluth, · · · and to a.pportion the debts of the city of Duluth between itself and the village of Duluth, and provide for the payment thereof." This act carved the village out of the city limits, taking and embracing in the village all the business part of the city andr business houses, the harbor, railroad depots and tracks, nearly all the dwell· ing-bouses, all the population except about 100 inhabitants, and nineteen-twentieths of all the taxable property: and no provision was made for the payment of the debts of the city by the village unless creditors would accede to the terms imposed by the legislature as hereinafter stated. It also appears that on February 28, 1877, an act was passed entitled" An act to amend the act entitled an act to incorporate the city of Duluth," approved March 5, 1870, and this act declared that the service of all summons and process in suits against the city of Duluth should be made on the mayor of the city, and that service made on any other officer should not be valid against the city. It also provided that the term of the office of mayor should cease on the following April, 1877, and no provision was made for the election of a successor or for filling a vacancy; that no taxes should be levied without the affirmati ve vote of all, to-wit, four aldermen; and since the passage of the act there have never been four aldermen in the city qualified to act. There is a section authorizing the levy of taxes by the county of St. Louis, in which the city is situated, but all taxes thus levied and collected must be paid to the village of Duluth. On the facts admitted by the demurrer the complainant is entitled to relief. The legislature undoubtedly had the right to create the village of Duluth out of the territory of the city, and, as between the city and the village, apportion the existing indebtedness; but when the corporation which created the debt is shorn of its population and taxable property to such an extent that there is no reasonable expectat ion of its meeting the present indebtedness, and it is unable 80 to
do, the creditors, at least, can enforce a proportionate share of their obligations against the two corporations carved out of one. Both are liable to the extent of the property set off to each respectively. The debt of the city at the time the village was created by act of February 23, 1877, was about $400,000, and the act creating the village of Duluth authorized an apportionment of the debts as follows: Section 8, in substance, provides that after one year from February 23, 1877, the village shall become jointly liable with the city on all bonds issued prior to the passage of this act, unless it shall within the year take up and cancel, as hereinafter provided, $218,000 of the evidence of indebtedness outstanding of the city, provided that interest to January 1, 1878, on all bonds and maturing coupons shall be treated and regarded as part of said evidence of outstanding indebtedness. Section 4 enacts that not more than $100,000 of village 6 percent. SO-year bonds shall be issued for taking up outstanding bonds and orders of the city of Duluth to the amount of $218,000, and interest thereon to January 1, 1870. These bonds are to be placed in the possession of the judge of the Eleventh judicial district of the state of Minnesota. Section 5 enacts that persons holding bonds, matured coupons, or orders of the city of Duluth prior to the passage of this act may surfor render the same to the judge of the district court for the bonds of the village of Duluth; and whenever $218,000 has been surrendered, the judge shall issue to the persons so surrendering, the bonds of the village of Duluth to one-fourth of the amount so surrendered, and on the delivery of the village bonds shall cancel the amount of city bonds received in exchange. Other sections provide for annexation of more land from the city limits. This statute interferes with the rights of creditors. The obligations of a municipal corporation are not affected, although the name may be changed and the territory increased or diminished, if the new organization embraces substantially the same territory and the same inhabitants. It may be true that generally creditors, to obtain relief, must look exclusively to the corporation creating the debt; but when a state of facts exists as disclosed here, and the old corporation is diminished in population, wealth, and territory to the extent admitted, it would be a mockery of justice to withhold the relief asked.
Without at this time conaidering more fully the question presented, whether the several acts of February 25, 1877, and February 28, 1878, impair the obligations of the contract between the city of Duluth and its creditors, it is clear to my mind that the bill on its face contains sufficient equity and calls for an answer. The demurer is overruled, and the defendant can have until January rule-day to answer. MCCRARY, C. J., concurred.
NOTE. Consult 92 U. 8.307; 93 U. S. 266; 100 U. S. 514; O'Connor v. Memphis, 13 Cent. Law. J. 150; 7 Biss. 146.
(Oircuit Oourt, E. .D. New York. January 11,1882.)
1. REv. ST. NEW YORK, VOL. 1, p. 738, § 139, CONSTRUED-MoRTGAGES. Revised Statutes of New York, voL 1, p. 738, § 139, which declares that no mortgage shall be construed as implying a covenant for the payment of the money, and that if there be no express covenant for such payment in the mortgage, and no bond or other separate instrument to secure payment, the remedy of the mortgage shall be confined to the land, construed not .to mean that, in the absence of an express covenant in the mortgage for the payment of the debt, and any bond or other separate instrument to secure payment, a personal for a mortgage debt when proved by competent action cannot be evidencf:!, whether ill writing or parol; but that an action for a debt secured by mortgage cannot be sustained merely by the production of the mortgage, when it contains no express covenant to pay the debt.
Motion to Set Aside a Verdict and for a. New Trial. Johnson Lamb, for plaintiff. S. W. Holcomb, for defendant. WHEELER, D. J. This cause has been heard upon the motion of the defendant to set aside the verdict for the plaintiff, and for a new trial. The plaintiff was surety for the defendant on an appeal bond in the state courts of New York. The judgment appealed from was affirmed and the condition of the bond broken. The plaintiff paid the judgment, and the defendant, by a deed absolute on its face, conveyed an interest in some lands .and houses situated in New York to the plaintiff to secure repayment of .the sum paid. The verdict is for the amount due of that sum. The defe.ndant claimed at the trial that this conveyance was in reality a mortgage, and that the plaintiff could not recover for this money on account of a provision in the shtutes of New York-vol. 1, p. 738, § 139; vol 3, (6th Ed.) p. 1119, §