Opinion
No. 33616.
March 13, 1939. Suggestion of Error Overruled April 10, 1939.
1. PLEADING.
In considering propriety of trial court's action in sustaining demurrer to plea in abatement, on ground of other action pending, facts well pleaded in the bill in the other action must be taken as true.
2. DRAINS.
Bondholders of an insolvent drainage district share pro rata, and there can be no preference among them.
3. MANDAMUS.
Where drainage district's suit against bondholders to obtain permission to spend funds for emergency work was pending and district's solvency was doubtful, bondholder's mandamus action to compel payment of bonds and levy of taxes was too narrow an action for proper settlement of the questions involved, and should be dismissed.
4. ABATEMENT AND REVIVAL.
The pendency of a prior suit between the same litigants and involving the same subject matter constitutes a bar unless adequate relief is not attainable in the prior suit.
APPEAL from the circuit court of Leflore county; HON. S.F. DAVIS, Judge.
Arthar Bruce, of Greenwood, and A.M. Pepper, of Lexington, for appellants.
The statute under which these bonds were issued, chapter 195 of the Laws of Mississippi of 1912, section 4492 of the Mississippi Code of 1930, provides that "all bonds and evidences of indebtedness issued by the commissioners under the terms of this article shall be secured by a lien on all lands and railroads subject to taxation under this article, in an amount not to exceed the amount of benefits assessed against such lands and railroads."
This court has very recently held the law on this identical proposition to be this: "The argument that there can be no preference among the bondholders of an insolvent taxing district is not controverted. That position is sustained by numerous authorities. When the taxing power is exhausted and there are not sufficient funds to pay all indebtedness in full, there can be no preference — creditors must share pro rata unless the law provides otherwise, and it does not here."
Teoc Sub-Drainage Dist. v. Halliwell, 180 Miss. 720, 178 So. 84; First National Bank of Meridian v. Commissioners of Lake Cormorant Dr. Dist., 167 Miss. 354, 147 So. 807.
The instant case is, in our opinion, very much stronger than the Lake Cormorant case, supra, for the reason that in the instant case there was only one issue of bonds, all authorized by the court in one order, all printed and sold at one and the same time to one firm, and all used for the purpose of excavating the canal of the district. How can it be said that one bond should be paid ahead of another, or that there is any priority whatever, when it is admitted by the demurrer that the district is insolvent, that not exceeding 30 percent of the indebtedness of the district can be paid and that the district will never be able to meet its obligations?
Moran v. State ex rel. Montgomery, 149 So. 477, 111 Fla. 429; Norris v. Montezuma Valley Irrigation Dist., 248 F. 369; Duncan Townsite Co. v. Lane, 245 U.S. 308, 38 S.Ct. 99, 62 L.Ed. 309; Ex Parte Skinner Eddy Corp., 265 U.S. 86, 44 S.Ct. 446, 68 L.Ed. 912; Buckwalter v. Lakeland, 112 Fla. 215, 150 So. 514, 90 A.L.R. 713; State v. Knott, 176 So. 113; Jewell v. Superior, 135 Fed. 19, 198 U.S. 583, 49 L.Ed. 1173, 25 S.Ct. 801; Thomas v. Patterson, 61 Col. 547, 159 P. 34; Meyers v. Idaho Falls, 52 Idaho 81, 11 P.2d 626; State ex rel. Boyd v. Mills, 138 Wn. 681, 234 P. 1042, 238 P. 581; Vanderpoel v. Mt. Ephriam, 168 A. 575, 89 A.L.R. 862.
Much has been written upon the subject involved, and the authorities are not entirely harmonious upon the question when the pendency of a former action between the same parties will abate one subsequently brought. It is often said that the causes of action involved in the two suits must be identical and the relief demanded the same. 3 Enc. L. P., (3 Ed.), 1218. But the ultimate inquiry seems to be whether a judgment in the first, if one be rendered, would be conclusive upon the parties in respect to the matters involved in the second action. If so, a plea in abatement should be sustained.
Whitcomb v. Hardy, 68 Minn. 265, 71 N.W. 263; Breault v. Merrill R. Lbr. Co., 72 Minn. 143, 75 N.W. 122; 23 Cyc. 1239; Haas v. Righeimer, 220 Ill. 193, 77 N.E. 69; Van Vleck v. Anderson, 136 Iowa, 366, 113 N.W. 853; Disbrow Mfg. Co. v. Creamery Package Mfg. Co., 115 Minn. 434, 132 N.W. 913, L.R.A. 1918A, 3.
In some cases the rule in determining the identity of causes of action was said to be that the identity would be established if the judgment in one was a bar to a prosecution of the other. Another test is, will the same evidence be necessary in both actions? Some cases hold that the identity is established if the same relief could be had in the prior action.
And a bill in equity pending to determine the right to publish notices and ordinances was held to abate an application for mandamus to compel the city council to designate the paper.
People ex rel. Staats-Zeitung Co. v. Chicago, 53 Ill. 424.
And a bill in chancery, pending, which involved the removal of the county seat, was held sufficient to abate a proceeding in mandamus to determine the vote on the removal of a county seat.
People ex rel. Wheaton v. Wiant, 48 Ill. 263.
An action of mandamus to compel the granting of a license for a pool room, pending in the superior court, was held to present a good ground of abatement of a suit in the supreme court for mandamus for the same cause.
Goytins v. McAleer, 4 Cal.App. 655, 88 P. 991; McCormick v. Gross, 135 Cal. 302, 67 P. 766; Page v. Letcher, 11 Utah 134, 39 P. 502; State ex rel. Chicago, B. Q.R. Co. v. North Lincoln Street R. Co., 34 Neb. 634, 52 N.W. 369; People ex rel. Mitchell v. Warfield, 20 Ill. 160; U.S. ex rel. Coffman v. Norfolk W.R. Co., 114 Fed. 682; State ex rel. Nead v. Nolte, 146 N.E. 51, 37 A.L.R. 1426.
In all cases of concurrent jurisdiction, the court that has first possession of the matter should be left to decide it.
State of Vermont v. Van Ness, 199 A. 759, 117 A.L.R. 415; Trees v. Glenn, 319 Pa. 487, 181 A. 579, 102 A.L.R. 304.
The court erred in rendering the judgment in mandamus herein.
It is our claim that all bonds of the district should be paid pro rata out of the funds of the district; that the funds should not be exhausted in the payment of any one bondholders' bonds; that all the bonds of the district, being all issued at the same time, and predicated upon the same security, under the same order of the court, upon the same assessment of benefits, and the district being insolvent and unable to meet its obligations, should be paid pro rata. The judgment of the court certainly gives a preference to these bondholders in awarding the writ of mandamus for the payment of all the funds on hand and all the funds to be collected, and all the funds which the plea in abatement shows can ever be collected, to this one bondholder to pay its bonds in full in preference to any and all other past due bonds and interest. The record shows that there are liabilities of over $84,000, and assets of only $22,500. Why should a preference be shown these particular bondholders at the expense of all other bondholders who will not get one single cent for their bonds if the decision of the lower court is allowed to stand?
This court recently decided there could be no preference among bondholders of an insolvent taxing district.
Teoc Sub-Drainage District v. Halliwell Cooper, 180 Miss. 720, 178 So. 84.
The chancery court had exclusive jurisdiction of this proceeding under section 4424 of the Mississippi Code of 1930.
James McClure, of Sardis, for appellee.
The demurrer to the plea in abatement should have been sustained.
We submit that it is the law that before one action can be pleaded in abatement of another, that it is necessary that they involve the same cause of action. This is the general rule of law.
1 Am. Jur., page 31, par. 22, and page 34, par. 27; Fort Worth (Independent) School Dist. v. Aetna C. S. Co., 77 A.L.R. 222.
When the petition for the writ of mandamus is examined and compared with the cause of action as alleged in the former action which is pleaded in abatement, it readily appears that the causes of action as made by the two pleadings are not the same, nor do they seek the same relief, nor are they between the same parties.
1 Am. Jur., page 35, par. 28; State v. Large, 145 So. 346, 164 Miss. 318.
Pleas in abatement on the ground of the pendency of another action are not favored by the court.
Grenada Bank v. Bourke, 70 So. 449, 110 Miss. 342; Anderson v. Newman, 60 Miss. 532; Griffin v. Bd. of Miss. Levee Comrs., 15 So. 107, 71 Miss. 767.
That the two actions are not the same is further shown by the fact that the relief sought therein is not the same.
1 Am. Jur., page 37, par. 31 and page 40, par. 36; 23 L.Ed. 488; L.R.A. 1918A, page 31; County Ct. v. White, 79 W. Va. 475, L.R.A. 1917D 660; Caster v. Southwestern Bell Telephone Co., 102 Kan. 318, L.R.A. 1918E., 299, State ex rel. Nead v. Nolte, 111 Ohio St. 486, 146 N.E. 51, 37 A.L.R. 1426.
In the subsequent suit, Albert Theis Sons instituted the same as plaintiff against the commissioners of the Abiaca Drainage District, whereas, the former action was instituted by the commissioners of the district against Albert Theis Sons, Inc., and some twelve other defendants, as well as against unknown defendants.
Before an action can be successfully pleaded in abatement of another, it is not only necessary that both suits be pending at the same time for the same cause of action, but it is essential that the matter in issue shall be between the same or substantially the same parties. If the parties are not the same, the first action cannot be pleaded in abatement.
1 Am. Jur., page 31, par. 22, and page 32, par. 23.
The former action was commenced by the commissioners of the Abiaca Drainage District against Albert Theis Sons, Inc., who was named defendant along with some ten or twelve other parties, as well as with all unknown holders of the bonds of the district, whereas, the case at bar was instituted by Albert Theis Sons, Inc., as plaintiff, against the commissioners of the Drainage District, as defendants. In other words, the complainants in the former suit are named as defendants in the subsequent suit, and one of the defendants in the former suit is the plaintiff in the subsequent suit.
1 Am. Jur., page 33, par. 26, note 7, on page 34.
The chancery court did not have jurisdiction of the subject matter of the former action, so as to award the relief prayed for therein.
1 Am. Jur., page 30, par. 20; Standard Oil Co. v. National Surety Co., 107 So. 559, 143 Miss. 841; Tallahatchie Dr. Dist. No. 1 v. Yocona, 114 So. 264, 148 Miss. 182; Pryor v. Goza, 159 So. 99, 172 Miss. 46.
The bill filed in the former suit does not allege facts which would warrant a court of equity in taking jurisdiction of the subject matter, or the funds for distribution among the bond holders of the district.
Section 4469, Code of 1930; Howie v. Panola Quitman Dr. Dist., 151 So. 154, 168 Miss. 387; Covington v. Meletio, 151 So. 735, 168 Miss. 497.
The facts do not show plaintiff will acquire a preference.
It is manifest that said drainage district is not insolvent, for, as said in the Teoc Drainage District case, 180 Miss. 720, the benefits assessed to the lands constitute the assets of the district and the benefits and cash on hand of the Abiaca Drainage District exceed by a large sum the amount of the outstanding indebtedness of the district, as alleged in said bill.
We respectfully submit that the bill filed in the former action does not contain or allege sufficient facts which would warrant the court in taking jurisdiction over the funds of the district for the purpose of making an equitable distribution of the same.
The bill filed in the former suit which is pleaded in abatement of the subsequent action affirmatively shows that it is a straight-out demand on the part of the commissioners of the Abiaca Drainage District against the bondholders of that district for the right to use the funds of the district for other purposes — expenses, construction work, and attorney's fees — than that authorized by the drainage statutes. The bill shows on its face that the funds were not deposited with the court and that the commissioners have no legal right to appropriate or use the funds in the manner as sought to be used by them.
Pomeroy's Equity Jurisprudence (Students' Ed.), page 799; 15 R.C.L. 233, par. 16; Blue v. Watson, 59 Miss. 619.
Chancery court does not have jurisdiction.
Section 2348 of the 1930 Code directs that on the petition of a private person, the writ of mandamus shall be issued by the circuit court, "commanding any inferior tribunal, officer or person, to do . . . any act which the law specially enjoins as a duty resulting from an office or trust."
The judgment is not erroneous as to the sum adjudicated.
Pickering v. Yates, 36 So. 10; Wells v. Smith, 44 Miss. 296; Hinds v. North Carolina, 10 S. M. 529; Berry v. Dampier, 95 So. 744, 131 Miss. 893; Thomas v. Rosenberg Sons, 120 So. 732, 153 Miss. 314.
Argued orally by Arthar Bruce and A.M. Pepper, for appellant and by James McClure, for appellee.
The appellee, as the owner and holder of certain bonds and interest coupons of appellant, the Abiaca Drainage District, filed its petition in the circuit court of Leflore County against said district and its commissioners praying for a writ of mandamus to compel them to apply the funds of the district in their custody to the payment of appellee's bonds and levy a sufficient tax on the land benefits of the district to pay any balance remaining due thereon. The drainage district plead in abatement the pendency of a former suit in the chancery court of Leflore County between the same parties and involving the same and other questions. Appellee demurred to the plea, which demurrer was sustained and a final judgment entered granting the writ of mandamus as prayed for. From that judgment, this appeal is prosecuted.
That bill was filed by the drainage district against appellee and all other bondholders of the district. Appellee demurred to the bill upon the ground of no equity. No further steps had been taken when the present case was tried. In considering the propriety of the action of the court in sustaining the demurrer to the plea in abatement, the facts well pleaded in the chancery court bill must be taken as true. They are in substance as follows: The district contains 13,185 acres of land. Appellee is the holder of $25,000 of the past due bonds of the district, which with their accrued interest aggregate something like $33,110. The assessed benefits are $213844 bonds issued $110,000; bonds unpaid $57,500; interest in default $25,549; the title to 5903 acres of the lands of the district is in the state, having been forfeited for nonpayment of taxes. The remaining lands, 7282 acres, are assessed with benefits in the sum of $113,300. Taxes for 86% of the assessed benefits have already been levied, therefore, only 14% remains to be levied. Amount of funds on hand, $15,194.39.
The bill alleges that there was certain emergency repair work necessary in order to preserve and make effective the works already constructed; that this would necessitate an expenditure of approximately $2,500. There are set out in the bill the names of the bondholders of the district, including appellee, and their holdings, all of whom were made parties defendant. The bill prays for a decree authorizing the commissioners to expend out of the funds on hand a sufficient amount to do the necessary emergency repair work referred to. and, in addition, that the solicitors filing the bill be allowed a reasonable fee for their services in that behalf, and the balance remaining be prorated among the bondholders of the district, including appellee.
The assets of the district are the benefits already levied and any that may be hereafter. It is manifestly a very doubtful question whether the district is now solvent, and furthermore, whether there is any reasonable probability of its becoming solvent in the near future. There can be no preference among the bondholders of an insolvent drainage district. They share prorata. Teoc Sub-Drainage District v. Halliwell, 180 Miss. 720, 178 So. 84. If this district is insolvent and so continues, the judgment of the court gives appellee a preference over the other bondholders. In the chancery court case that can be provided against. In State ex rel. Rice, Atty. Gen., v. Large, 164 Miss. 318, 145 So. 346, the Court held that a proper test in determining whether a subsequent action should be abated because of the pendency of a prior action is whether the judgment in the prior action would be res judicata of issues presented in the second. The identity of the parties in the two suits is the same except all the bondholders, including appellee, were made parties in the chancery court case, while only appellee and the drainage district are parties in the present case. However, in the chancery court case the same relief is asked for as against all the bondholders. Mandamus is now treated as in the nature of an ordinary civil action. The pendency of a prior suit between the same litigants and involving the same subject matter constitutes a bar unless adequate relief is not attainable in the prior suit. People ex rel. Wheaton v. Wiant, 48 Ill. 263; State ex rel. Harmony Drainage District v. Hackmann, 305 Mo. 685, 267 S.W. 608. The field of jurisdiction in a mandamus case is very limited as compared to that in an equity case. In the chancery court case the chancellor will have before him for decision the questions of the solvency of the district; whether out of the funds on hand the emergency expenditure asked for should be made, and whether the solicitors in that case should be paid for their services out of that fund. The funds of the district in the hands of the commissioners are trust funds. Under the facts of this case, equitable principles come into use. We are of opinion that the mandamus is too narrow an action to properly settle the questions involved, and, on the other hand, the chancery court with its broad authority is fully empowered to do so.
Reversed and judgment dismissing the suit.