In Error to the Circuit Court of the United States for the District of Montana.

This cause comes to this court upon the alleged error of the circuit court of the United States for the district of Montana in awarding a peremptory writ of mandate to compel the payment of a judgment recovered in said circuit court hy .Tames H. Mills, receiver, against the city of Helena, on the 1st day of December, 1897, for the sum of 831,319. It appears from the petition of the defendant in error for a writ of mandamus that the defendant in error is a corporation organized and existing under the laws of the state of New Jersey, and. that the . city of Helena has a corporate existence -under and by virtue of the laws of the state of Montana; that on the 1st day of December, 1897, a judgment was entered in the circuit court in favor of James H. Mills, receiver, against the said city of Helena, for the sum of $31,319 and interest, and that said judgment is still in force unsatisfied; that there was filed with the city clerk of said city, on the 13th day of May, 1898, a certificate of the clerk of said court, showing the amount and date of entry of said judgment. It is averred that the city council, in 1898, levied a tax of one mill on the dollar for the express purpose of paying and satisfying in part said judgment, and that there was collected, and is now fin the treasury of said-city, as the proceeds of such levy, the sum of $10,005.83, placed to the credit of the “Judgment Fund”; that the city has failed, neglected, and refused to appropriate and issue a warrant for or to pay the said sum, or any part thereof', upon- said judgment. It is also alleged that on or about July 1, 1899, there was sufficient money to the credit of the general fund in the treasury of said city, exclusive of all appropriations of said city for the current- fiscal year, to pay and satisfy said judgment, but the city council has refused to direct, by' ordinance or otherwise, that the said judgment, or any part thereof, be paid out of the general fund, or that a warrant issue therefor; and it is alleged that the plaintiffs in error have misappropriated, misapplied, and expended said surplus in violation of their duty and the rights of defendant in error. It is also averred that the defendant in error is beneficially interested in the subject-matter of this proceeding, and in the relief demanded, as a large taxpayer on property within the city of Helena, and as owner and holder of said judgment. The prayer is for a writ of mandate directing the payment of the sum collected by said special tax levy; for a warrant on said general fund for the remainder of said judgment; and, if a portion of the judgment is still unsatisfied, that the city council shall be compelled to levy and collect within three years a tax on all property within the city for its payment. An alternative writ was issued containing the averments of the petition. The return and answer by the plaintiffs in error set up as matter of defense that the special tax levied and collected was wholly void and illegal, and that the whole of said amount and fund is, by reason thereof, ■ due from the city to its taxpayers-The rendition of the judgment in favor of said Mills, receiver, is admitted, but it -is. averred that there was in fact no indebtedness due from the city to said Mills at that time; that said judgment was rendered on a'ceount of water alleged to have been furnished by the said Mills, receiver, and his predecessor in interest, the Helena Consolidated Water Company, and that at all times when the said water was furnished to the city the said city of Helena was, and ever since has been, indebted beyond the constitutional limit, to wit, 3 per cent, of the taxable property therein; that during none of such time has the city’s assessed valuation exceeded $12,656,783, nor the aggregate indebtedness been less than $550,704. It is further averred that at the time the said judgment was entered the then city council and mayor well knew that the city was so illegally indebted, and that no valid judgment could be obtained against the city, but, for the purpose of evading and avoiding the effect of the constitutional limitation of indebtedness, they entered into an agreement with the said Mills, whereby they agreed not to interpose that or any other defense to such action, and to consent to the entry of a judgment, and in that behalf passed and approved a certain ordinance, pursuant to which the judgment was taken. That part of the ordinance providing for the judgment is as follows: “Ordinance No. 307. Sec. 12. The said city shall and does hereby consent that said receiver may take judgment in a proper court of record within the state of Montana, either state or federal, for all moneys due for water heretofore furnished said city of Helena for fire, sewerage and other municipal purposes, whether the same has been furnished by said receiver or by the Helena Consolidated Water Company. Such judgment shall be at the rate of eighteen thousand dollars per year, with interest at warrant rates from dates when warrants should have been issued and delivered. There shall be deducted from the sum thus found due any and all amounts heretofore paid to the Helena Consolidated Water Company by the city on account; and also the city, taxes levied and assessed against .said Helena Consolidated Wafer Company for the years 1895 and 1800, without interest or penalty, ami such deductions shall he made as of the dates when said amounts were paid to said Helena Consolidated Water Company, and when said taxes were due and payable. In the action heretofore commenced by the Helena Consolidated Water Company against said city in the district court of Lewis and Clarke county the judgment entered therein shall ho set aside l>y stipulation of the attorneys for the respective parties, and said causo dismissed contemporaneously with the entry of judgment in favor of the receiver hereinabove provided for. And the adjustment and settlement for amounts due for water heretofore fnmislu'd as herein provided is a. part consideration for the contract contained herein.'’ The defendant in error demurred to the answer and return, upon the ground that it did not state facts sufficient to constitute a defense. The demurrer was sustained, and the plaintiffs in error were granted further time in which to answer. Upon their failing and refusing- to present or tile an amended answer or return at the expiration of such time, judgment was rendered directing the issuance of a peremptory writ of mandate, which was accordingly issued.