text:
City of Fort Scott v. Hickman/Opinion of the Court

This is an action brought by the defendant in error in the circuit court of the United States for the district of Kansas against the city of Fort Scott, in the state of Kansas, to recover the amount of principal and interest due on 27 bonds for $500 each, issued by that city, 12 of which became due on July 1, 1873, and 15 on July 1, 1874. The bonds are coupon bonds, with interest payable annually on the first of July at the rate of 10 per cent. per annum, and are dated July 1, 1871. Each bond contains the heading, 'Special Improvement Bond of the City of Fort Scott, Kansas,' and this statement: 'Issued in accordance with sections 16 and 17 of an act of the legislature of the state of Kansas, entitled 'An act relating to the powers and government of cities of the second class, and to repeal certain sections of chapter 19 of the General Statutes of 1868, approved March 8, 1871,' and in pursuance of an ordinance of the city of Fort Scott, entitled 'An ordinance ordering the grading and macadamizing, etc., of certain streets and parts of streets, approved May 19, 1871.' Countersigned by the city treasurer, this twentieth day of September, 1871.' The suit was commenced July 1, 1880, and was tried by the circuit court without a jury. As to 11 of the 12 bonds that court found that all the coupons on them had been paid on and before July 1, 1873, but no payment of principal or interest had been made upon any of them since that date, except as stated in its fourth finding. As to the 15 bonds it found that all the coupons on them were paid on and before May 16, 1875, but no payment of principal or interest had been made upon any of them since that date, except as stated in its fourth finding. The remaining findings were as follows:

4. The court further finds, that, as to the remaining bond sued on herein, being bond number 78, it became due, by its terms, July 1, 1873, and on and prior to that date all the interest coupons thereon had been paid; that, on November 8, 1875, a payment was made on said bond number 78, of the sum of $290, and the balance of said bond remained due and unpaid at the time of the commencement of this action; that said payment upon bond 78 was made by Donnell, Lawson & Co., fiscal agents of the state of Kansas, upon the authority of certain letters sent them by J. H. Randolph, city treasurer of the defendant, written by him in the usual routine of his official duties, but without any special instruction or knowledge on the part of the city council of said city; which said letters are as follows, to-wit.

'FORT SCOTT, KANSAS, June 10, 1875.

'''Mess. Donnell, Lawson & Co., New York''-DEAR SIRS: Yours of     the second inst. at hand. The coupons of our special     improvement bonds are all retired except bonds Nos. 97 and     107 to 113; the last coupon on these Nos. (all past due) is     not yet in; will give you statement of am't and Nos. of these     bonds due and unpaid by next mail. You may redeem any one of     these bonds whenever this fund in your hands is sufficient to      do so. My remittance of May 26th, of $245, was all to apply     on coupons of bonds issued to the M., K. & T. R. R. Co., and      not $70 of it for special im. fund, as you state you have     credited, in your letter of June 1st. The Nos. of the bonds     to which these coupons belong are 1 to 7, inclusive. You will     please make the transfer of the $70 to your Fort Scott City      coupon acc't. About what would our city funding bonds bring      in your market, bonds running 10 years, int. payable s. a. at     10 per cent. p'r annum?

'Resp'y, yours,

J. H. RANDOLPH, City Treasurer.

'FORT SCOTT, KANSAS, August 6, 1875.

'''Mess. Donnell, Lawson & Co., New York''-GENTLEMEN: I give you     below the Nos. of our special improvement bonds now unpaid. Nos. 6 to 15, 17 to 22, 24, 30 to 39, 53 to 58, 60 to 80, 83     to 85, 97, 98, 99, and 104 to 115, in all 70 bonds of $500      each, all past due. I will be in New York last of this month,     and will call and explain to you the situation in regard to      these bonds, so you may understand the reason why they are      not paid, and that owners of the same may govern themselves      accordingly.

'Very resp'y yours,

J. H. RANDOLPH, City Treasurer.

'FORT SCOTT, KANSAS, August 11, 1875.

'''Mess. Donnell, Lawson & Co., New York''-GENTLEMEN: I inclose     you herewith d'ft for $500 to apply on interest, due on Fort      Scott City special improvement bonds.

'If not convenient to apply on interest use to pay on bonds.

'Resp'y yours,

J. H. RANDOLPH.'

On November 8, 1875, said fiscal agents paid bond 77 of this series, and said $290 on said bond 78, they being the only bonds presented to that date, which payments exhausted the funds in the hands of said fiscal agents. That the official accounts of the treasurer of said city contain the following entry of credit to himself: 'August 11, 1875. By Donnell, Lawson & Co., to pay interest on special improvement bonds, $500,' which was the moneys remitted by said treasurer in the letter of August 11, 1875. Said payments were reported by the city treasurer in his annual report and approved by the city council.

(5) The court further finds that in July, 1878, the defendant, the city of Fort Scott, Kansas, by its city council, referred the matter of its financial condition to the finance committee of said council, which committee made a report in writing to said council on the twenty-first day of August, 1878, which report was duly adopted and spread in full on the records of the minutes of said council and is as follows, to-wit:

'COUNCIL PROCEEDINGS, AUGUST 21, 1878.

'Adjourned regular meeting. Mayor Cohen in the chair. The     report of the finance committee on the matter of the city      indebtedness was read, and on motion adopted and ordered      placed on file. It is as follows:

"To the Hon. Mayor and Councilmen of the City of Fort Scott,     Kansas: We, your committee on city indebtedness, met with and      consulted B. P. McDonald, D. P. Lowe, J. S. McCord, J. D.      McCleverty, and also J. D. Hill, W. J. Bowden, W. A. Cormany,      members of the board of education of this city, whom the      committee thought should be invited; and, after careful      consideration, the joint committee unanimously agreed on the      plan of compromise set forth in the following circular      letter, which we recommend be sent to each person holding      city and school-district bonds, except Macadam bonds, about      which latter we make no report:

"DEAR SIR: The city council of Fort Scott address this to     each person holding bonds of the city of Fort Scott, Kansas,      with a view to bring about such an amicable adjustment of the      indebtedness of our city, if possible, as will be fair to the      bondholders in view of our circumstances, and at the same      time be such an one as the city can reasonably expect to be      able to meet. Nearly all of our county, city, and      school-district indebtedness was incurred at or about the      year 1870, which was what would be called our times flush,      when money was plenty and property of ready sale at good      figures. In 1870 the assessed valuation of all kinds of      property in the city was $1,445,730, as shown by the      tax-roll, while our assessed valuation for the year 1878 is      only $814,457, being a decline in valuation of $631,273, or      nearly one-half, a decline which cannot be accounted for upon      the basis of the general decline in values, but is doubtless      largely attributable to the excessive burden of our debt and      taxation. For the year just past our levy for all funds in     the city was 5.25 per cent., while, this year, had an      adequate levy been made, it would have been nearly 7 per      cent., and this, too, without making any levy for      sinking-fund purposes to meet our railroad bonded      indebtedness. A careful examination of our financial     condition convinced us that to meet our indebtedness in its      present form, including our share of the county and      school-district indebtedness, would, within two or three      years, require a levy of 10 per cent., and, should the      extreme decline in our assessed valuation continue, the rate      would exceed that figure. Our assessed valuation of all kinds     of property in the city, beginning with the year 1870, as      shown by the tax-roll, is as follows:

"The increase in valuation in 1874 is explained by the fact     that nearly 250 acres of outlying additions were that year      annexed to the city. In the face of this great decline in      value our indebtedness is rapidly maturing, and is yet to be      provided for. The indebtedness of our county in railroad      bonds is $300,000, of which $150,000 are in litigation, and      upon which there is nearly $40,000 of an accumulation of      unpaid interest, and all may yet be adjudged a valid      indebtedness. The assessed valuation of the county, including      the city, this year is $3,509,164; the valuation of the city      being about one-fourth of that, places one-fourth of the      county's burden upon the city. A statement of our      indebtedness, then, upon that basis is as follows:

accrued interest,............... 45,

"From this statement it will be seen that the ratio of our     total indebtedness to our assessed valuation is about 40 per      cent. Of our indebtedness, our school-district, bridge, and      funding bonds bear ten per cent. interest, and for these the      city has had something in the shape of value received. In the      matter of our railroad 7 per cent. bonds, however, both      county and city, the universal sentiment of our people is      that we have not been rightly treated. Each of the railroad      companies promised that their machine shops should be built      and located in Fort Scott. The M., K. & T. made a written      contract to that effect, and the city railroad debt of $100,000, and a county railroad debt of      $150,000, was created. The bonds were delivered, but the      railroad companies have built their shops elsewhere. The M.,      K. & T. Railroad, after receiving $100,000 of city and      $150,000 of county bonds, not only failed to comply with its      contract, but started a new town, built its machine shops      there, and has since lent every effort of its great power to      foster a rival town within fifty miles of this place. Had the     railroad companies fulfilled their pledges, Fort Scott nor      Bourbon county would not now be asking leniency at the hands      of their creditors; our debts would not have been out of      proportion to our valuation, our people would have been      satisfied, our town and county prosperous.

"We have incurred the debt; we have failed to receive the     benefits. Both of the railroad companies are bankrupt, and we      are without remedy or hope of redress. A strong sentiment has      always existed in favor of utterly repudiating our railroad      debt, and now that the time approaches for levying a      sinking-fund tax to pay that debt, this sentiment increases.      The present bondholders may be blameless as to the bad faith      of the railroad companies, but the result to us is all the      same, and our debt burden in nowise relieved by that fact.      Our inability to pay such a debt seems apparent, and sooner      or later we know that we must fail. An increase in taxation      means a decrease in value, the refusal of the tax-payer to      pay, the driving out of capital already invested, and the      turning away of those who would otherwise settle here.      Realizing this, we have this year omitted to make a levy for      debt purposes, either principal or interest, and hope, by a      statement of the facts and of our circumstances, together      with the safeguards which we propose for the future, to      effect a compromise, which, while burdensome still to us, yet      we know we can meet, and at the same time give to the      bondholder as high a marketable value as he now has in the      paper he now holds. We feel, however, that a difference ought     to be made in the two classes of bonds, and hence we propose      to refund the city and school-district debt upon the      following terms: The city railroad and machine shop 7 per cent. bonds to be refunded, at 50 cts. on     the dollar, into a 30-year 5 per cent. bond, payable at any     time after 10 years, and the school-district funding and      bridge 10 per cent. bonds to be refunded into a like bond, at     the rate of 75 cts. on the dollar of the present amount of     bonds outstanding. This would make the amount of our city and     school-district debt about 20 per cent. of our valuation,     leaving out of consideration our proportion of the county      indebtedness, which, if considered, would still leave our      debt about 30 per cent. of the valuation.

"To effect this compromise we will need new legislation, and,     in obtaining this, we propose and suggest the following      provisions of law, as a protection to the holders of the      compromise bonds against a subsequent overissue, which might      compel a new compromise, to-wit: A tax levy for interest, to      be made annually, sufficient to pay the interest then due. At      the end of 10 years one-twentieth, or five per cent., of the      principal to be collected, and for each year thereafter,      until the whole refunded debt is paid or liquidated. Making      any officer who shall prevent such levy personally liable to      any bondholder for the amount then due, to be recovered in a      civil action; making it a misdemeanor, punishable by fine and      imprisonment, for any officer to divert any portion of the      funds so collected to any other purpose than the payment of      these bonds and interest, the fine to be not less than the      sum so diverted; making a provision that the aggregate amount      of our bonded indebtedness, when the now proposed compromise      is effected, shall never be exceeded, until the entire amount      of the compromise bonds shall be fully paid, and making any      bonds that might be issued in excess of that amount      absolutely null and void. The bonds issued under such a law     as this would be absolutely protected against an overissue in      the future, and, with this safeguard, would sell, in the      aggregate, for more dollars and cents than the entire amount      of our present bonded indebtedness.

"In response to this, we ask each bondholder to express  his views fully, stating the amount and kind of bonds he   holds; and we sincerely hope that a compromise can be   fully agreed upon by the time our legislature meets in   January next, so that the proper legislation may be   obtained, and the refunding bonds issued in time for the   making of a levy in 1879.

"By order of the city council of the city of Fort Scott,     September 3, 1878.

"_____, City Clerk."

At said meeting of August 21, 1878, said city counsel also adopted the following motion, as appears by said records:

'On motion, the city clerk was instructed to have one hundred     copies printed of the circular letter, with the report of the      finance committee on our indebtedness, as the city attorney      may direct, to be sent to the holders of our city bonds.'

(6) That, under date of September 3, 1878, the city clerk of said city caused to be printed 100 copies of said circular letter, each being printed with a dotted head-line in which to write the name of the person addressed, and sent a copy of the same to each of the holders of the bonds of said city, except to the holders of said special improvement or Macadam bonds, but did not send said circular to this plaintiff, nor to any agent or representative of his, nor to any other holder of said special improvement or Macadam bonds. The reason why said city clerk did not send any of said circulars to any of the holders of said special improvement or Macadam bonds was because of the directions to that effect made in the adopted report of the finance committee of said city council, as set forth in finding No. 5 herein. Each of the circulars so sent out by said city clerk were signed by him in writing, and had the name of the person to whom sent written in the dotted head-line thereof. Some persons holding bonds of said city, other than said special improvement or Macadam bonds, did receive copies of said circular in which no name was written in said dotted head-line, but were signed by said city clerk.

(7) That, in 1878, and after September 3d, one Thomas W. Marshall, of Westchester, Pennsylvania, where plaintiff resided, who held some of the bonds of said city other than said special improvement or Macadam bonds, received one of said circulars, which he showed to plaintiff, which was signed by said city clerk in writing, over the words 'city clerk' at the end, and one H. Burkhalter, at Westchester, Pennsylvania, who also held some of the bonds of said city other than said special improvement of Macadam bonds, received one of said circulars in 1878, which he gave to plaintiff. Said circular was also received by other persons residing at Westchester, Pennsylvania, who held bonds of said city other than said special improvement or Macadam bonds.

(8) That the class of bonds sued on herein are described on their face as 'special improvement bonds,' but were commonly called 'Macadam bonds' by the holders thereof, and by the officers of said city, and were issued by said city in payment for macadamizing certain streets in said city.

On the foregoing findings of fact the court held, as matter of law, that the plaintiff was entitled to recover on the bonds $26,385.23, and to have judgment accordingly, and judgment was entered for that amount, to bear interest at the rate of 10 per cent. per annum. The defendant has brought a writ of error. The declaration of the plaintiff avers the adoption by the city council of the motion of August 21, 1878, and sets forth a copy thereof and of the circular letter, and alleges that one of the circulars was sent to the plaintiff, and one to each of the other holders of the defendant's bonds; that thus the defendant fully acknowledged and recognized the plaintiff's bonds as valid and subsisting obligations of the defendant; and that, on the eighth of November, 1875, the defendant recognized the existence and validity of the plaintiff's bonds by paying to him that day $290 on account thereof. The answer avers that the $290 was paid and credited wholly on bond No. 78; that there is due on that bond $434, which sum the defendant offers to pay and brings into court; that more than five years elapsed after the maturity of the other bonds before this suit was brought, and it is barred by the statutes of limitation of Kansas; that the defendant never acknowledged or recognized the plaintiff's bonds as subsisting obligations, as alleged in the declaration; and that the circular was never sent to the plaintiff by the city, or by its clerk, or by any of its officers, and the plaintiff never received it from the city, or from any party on behalf of the city. To this answer there is a reply containing a general denial.

The statute of Kansas in force when this suit was commenced (Gen. St. Kan. c. 80, art. 3, § 18, subd. 1, p. 633) provided that an action on any agreement, contract, or promise in writing could only be brought within five years after the cause of action accrued, and not afterwards. Consequently, this suit was barred as to all the bonds, unless saved under the following provisions of the statute, (Id. § 24, p. 634:) 'In any case founded on contract, when any part of the principal or interest shall have been paid, or an acknowledgment of an existing liability, debt, or claim, or any promise to pay the same shall have been made, an action may be brought in such case within the period prescribed for the same, after such payment, acknowledgment, or promise; but such acknowledgment or promise must be in writing, signed by the party to be charged thereby.' The construction of section 24 by the supreme court of Kansas, in Elder v. Dyer, 26 Kan. 604, is that a case may be taken out of the operation of section 18 in three ways: (1) By the payment of part of the principal or interest; (2) by an acknowledgment in writing of an existing liability, debt or claim, signed by the party to be charged; (3) by a promise of payment, in writing, signed by the party to be charged; that it is not necessary all these things should co-exist, but only requisite that one of them should exist; and that it is not necessary the acknowledgment should amount to a new promise. But it is also held by the same court that the acknowledgment, to be effective, must be made, not to a stranger, but to the creditor, or to some one acting for or representing him. Sibert v. Wilder, 16 Kan. 176; Schmucker v. Sibert, 18 Kan. 104; Clawson v. McCune's Adm'r, 20 Kan. 337.

In the present case, the circuit court finds that the committee, in its report, recommended that the circular letter should 'be sent to each person holding city and school-district bonds, except Macadam bonds;' that the report stated that the committee made no report about Macadam bonds; that, on the report, the city council adopted a motion instructing the city clerk to have 100 copies printed of the circular letter, with the report, to be sent to the holders of the city bonds; and that the clerk caused to be printed 100 copies of the circular letter, and sent a copy of the same to each of the holders of the bonds of the city, except to the holders of the special improvement of Macadam bonds, but did not send the circular to the plaintiff, or to any agent or representative of his, or to any other holder of the special improvement or Macadam bonds. It is not found that any copy of the circular was received from the city, or from any one acting for it, by any holder of any Macadam bond, or his agent or representative. The recommendation of the committee, and its statement that it made no report about the Macadam bonds, and the fact that the circular letter offers no compromise as to those bonds, was a sufficient reason for not communicating with the holders of those bonds. In this connection, it may be observed that, by the report of the case of U.S. v. Fort Scott, 99 U.S. 152, it appears that, in that case, the city of Fort Scott, at October term, 1878, contested, in this court, its obligation to impose a tax on all the taxable property of the city to pay like bonds of the same issue, claiming that it was bound to levy a tax only on property benefited, and that this court reversed the decision of the circuit court of the United States for the district of Kansas, which had decided in favor of the city, and against a holder of Macadam bonds, as to that question. That decision by this court was announced after the report of the committee was made, and after the date of the circular letter.

It is plain that the city made no acknowledgment to the plaintiff. It held no communication with him. It sent no copy of the circular letter to him. It intentionally refrained from doing so. It had a cogent reason for refraining in the decision which had been so made in its favor. He received no circular letter from the city. Nor did the exhibition to him of the circular letter by persons who held other bonds than Macadam bonds amount to an acknowledgment by the city to him. The circular letter states that the city council addresses it to each person holding bonds of the city; but it also states that this is done with a view to a compromise, and then it proposes compromises as to other bonds, not including the Macadam bonds. So also, the circular letter, at its close, asks that each bondholder will express his views fully, stating the amount and kinds of bonds he holds. But this applies, necessarily, only to those who hold bonds which are to be compromised and refunded. There is nothing in the circular letter which makes, or which evidences any intention of making, an acknowledgment to holders of Macadam bonds. In view of all this, the placing in the list, under the heading 'A statement of our indebtedness,' of the item, 'city special improvement bonds and accrued interest, 45,000,' cannot be held to amount to an acknowledgment to the plaintiff of any then existing liability to him on the Macadam bonds he held. It was merely a statement that the city had issued that amount of special improvement of Macadam bonds, which it classed generally as 'indebtedness,' which others might claim was valid indebtedness against it, but which it carefully omitted from any proposal of compromise, and said no more about in the circular.

Although an acknowledgment need not, under the Kansas statute, amount to a new promise, yet the rule is applicable: that an acknowledgment cannot be regarded as an admission of indebtedness where the accompanying circumstances are such as to repel that inference, or to leave it in doubt whether the party intended to prolong the time of legal limitation. Roscoe v. Hale, 7 Gray, 274. Nor is there any ground for holding that what was entered upon the records of the city council is to be regarded as having been addressed to all the holders of bonds, including the plaintiff, and as having been in that way a sufficient acknowledgment to him without the sending to him of a copy of the circular letter; for that record states distinctly that no report is made about Macadam bonds, and that the circular letter is not to be sent to their holders; and the observations before made as to the contents of the circular letter, and as to the circumstances attending what is said in it about the indebtedness on the Macadam bonds, apply with even more force to this branch of the case. The record, taken as a whole, did not amount to an acknowledgment to the plaintiff as a holder of the Macadam bonds. It is not found that the plaintiff ever knew of the record till after he brought this suit.

The settled doctrine in Kansas, and the weight of authority elsewhere, is that statutes of limitation are statutes of repose, and not merely statutes of presumption of payment. Therefore, to deprive a debtor of the benefit of such a statute by an acknowledgment of indebtedness, there must be an acknowledgment to the creditor as to the particular claim, and it must be shown to have been intentional. Roscoe v. Hale, before cited. 'An acknowledgment of an existing liability, debt, or claim,' within the meaning of the Kansas statute, implies a meeting of minds, the right of the creditor to take what is written as an acknowledgment to him of the existence of the debt, as well as the intention of the debtor, as deduced from the contents of the writing and all the facts accompanying it, to make such acknowledgment. In Wetzell v. Bussard, 11 Wheat. 309, 315, Chief Justice MARSHALL said: 'An acknowledgment which will revive the original cause of action must be unqualified and unconditional. It must show positively that the debt is due in whole or in part.' To the same effect are bell v. Morrison, 1 Pet. 351, 362, and Moore v. Bank of Columbia, 6 Pet. 86, 92. In Barlow v. Barner, 1 Dill. 418, this statute of Kansas was under consideration by Mr. Justice MILLEF and Judge DILLON, and the court said: 'Courts, by their decisions as to the effect of loose and unsatisfactory oral admissions and new promises, had almost frittered away the statute of limitations, and, to remedy this, statutes similar to the one in force in this state have been quite generally enacted. The statute of Kansas requires the acknowledgment to be in writing, and signed by the party; and the acknowledgment must be of an existing liability with respect to the contract upon which a recovery is sought.'

The statement of the city treasurer to the agents of the city in New York in his letter of August 6, 1875, that special improvement bonds of certain numbers, which included those now sued on, were then unpaid, can avail nothing, for it was not a letter to the plaintiff or to his agent. The same remark is true as to the letter of August 11, 1875, and it remits $500 to apply on Macadam bonds generally. As to the payment of the $290, it was paid on bond No. 78 only, as is found, no others of the bonds sued on having been presented to that date. It was not a payment on any other bond or on the bonds as a whole. It follows from these considerations that the conclusion of law made by the circuit court on the facts found was erroneous. It ought to have rendered judgment for the defendant except as to bond No. 78. Its special finding of facts is, under section 649 of the Revised Statutes, equivalent to the special verdict of a jury, (Norris v. Jackson, 9 Wall. 125; Copelin v. Insurance Co. Id. 461, 467; Insurance Co. v. Folsom, 18 Wall. 237, 249; Retzer v. Wood, 109 U.S. 185; S.C.. 3 SUP. CT. REP. 164;) and as such special finding covers all the issues raised by the pleadings, this court has the power, under section 701 of the Revised Statutes, to direct such judgment to be entered as the special finding requires. In cases like the present one the proper practice is to direct a judgment for the defendant, instead of awarding a new trial. National Bank v. Insurance Co. 95 U.S. 673, 679; Fairfield v. County of Gallatin, 100 U.S. 47; Wright v. Blakeslee, 101 U.S. 174; People's Bank v. National Bank, Id. 181; Warnock v. Davis, 104 U.S. 775; Lincoln v. French, 105 U.S. 614; Ottawa v. Carey, 108 U.S. 110; S.C.. 2 SUP. CT. REP. 361; Kirkbridge v. Lafayette Co. Id. 208; S.C.. 2 SUP. CT. REP. 501; Retzer v. Wood, 109 U.S. 185; S.C.. 3 SUP. CT. REP. 164; Canada Southern R. Co. v. Gebhard, Id. 527; S.C.. 3 SUP. CT. REP. 363; East St. Louis v. Zebley, 110 U.S. 321; S.C.. 4 SUP. CT. REP. 21. The trial being without error, if the finding is sufficient, the same judgment is to be given as would be given on a special verdict. Where the special finding embraces only a part of the issues, as in Ex parte French, 91 U.S. 423, a different rule prevails. Accordingly, the judgment of the circuit court is reversed, and the case is remanded to that court, with direction to enter a judgment for the plaintiff on bond No. 78 for $500, with proper interest thereon, less a credit on said bond of $290, of the date of November 8, 1875; and, as to the other bonds sued on, to enter a judgment for the defendant, with costs.


text: Talk:City of Fort Scott v. Hickman/Opinion of the Court

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County of Buena Vista v. Iowa Falls South Carolina Railroad

Galusha Parsons, for plaintiff in error.

E. S. Bailey, for defendant in error.

MATTHEWS, J.


text: Talk:County of Buena Vista v. Iowa Falls South Carolina Railroad


text:
County of Buena Vista v. Iowa Falls South Carolina Railroad/Opinion of the Court

The plaintiff in error was the plaintiff below, and commenced this suit in equity in the district court of Buena Vista county, in the state of Iowa, for the purpose of establishing its equitable title in fee-simple to 553 40-acre tracts of land, lying within its limits, and seeking a conveyance of the legal title thereto, held by the defendant. It was claimed that the lands in question were granted by the swamp-land act of September 28, 1850, (9 St. 519,) to the state of Iowa; all such lands having been granted by the state by an act passed January 13, 1853, to the counties, respectively, in which the same were situated. The bill of complaint further alleges as follows:

'(5) That each and every parcel of said lands was of the description specified in said act of congress at the date of the passage thereof; that afterwards, to-wit, in the year eighteen hundred and fifty-nine, the plaintiff caused a list of said lands to be made in legal subdivisions in all respects in accordance with the requirements of the said act of congress and the rules and regulations of the general land-office of the United States; that the said list, with the proper proof thereunto attached, was duly filed in the office of the secretary of the state of Iowa on or about the first day of January, 1860, and was thereafter duly recorded in the office of the register of the state land-office, and thereafter filed in the office of the surveyor-general of the United States for the state of Iowa, and thereafter, to-wit, in the month of January, 1866, the same was duly filed in the office of the commissioner of the general land-office of the United States, where it has ever since remained on file.

'(6) That from time to time, since the filing of said list in said last-mentioned office, the plaintiff has applied to the said commissioner of the general land-office to examine and pass upon the sufficiency thereof, and to allow the same; that prior to the seventh day of July, 1875, it was wholly unable to obtain any hearing or decision thereon; that the defendant, by its agents and attorneys, appeared before said commissioner and resisted resisted said application, and the said refusal to take up and examine said list was wholly by reason of defendant's resistance thereto and its claim to said lands; that upon the day last aforesaid the said commissioner decided to allow plaintiff's said list; that defendant appealed from said decision to the secretary of the interior, who, upon the thirtieth day of August, 1876, reversed the decision of said commissioner, and directed him to take no further proceedings upon plaintiff's application for the examination and allowance of said list.

'(7) Plaintiff further says that upon the fifth day of July, 1871, the governor of the state of Iowa, without being in any way authorized so to do, issued to the defendant a patent for a part of said lands, which said patent is now of record in the office of the register of the land-office of the said state, at page two hundred and fifty-two of record 'A, Miscellaneous Conveyances;' that on the tenth day of August, of said year, he issued a patent to said defendant for all the remaining lands aforesaid, which is recorded in the book aforesaid, at page two hundred and eighty-three; that both of said patents are recorded in the office of the recorder of deeds for said county of Buena Vista; that said patents are a cloud upon the title of the plaintiff, and wholly prevent it from making sale of its said lands, and greatly impair the value of its property therein.'

The defendant claimed title to the lands in dispute in itself, and denied the plaintiff's equitable title, and the material facts upon which it was based.

The defendant's title was derived through a grant made by an act of congress, passed May 15, 1856, to the state of Iowa, to aid in the construction of certain railroads, which was accepted by the state and by it granted to a company whose line was located through Buena Vista county, whereby the limits of the grant were determined so as to embrace the lands described in the plaintiff's petition. Thereafter, on February 28, 1858, the same were certified by the secretary of the interior to the state as inuring to it under said grant, and were accepted by it and passed by subsequent legislative grants from the state to the defendant in error, to whom patents for the land were issued in the name of the state by the governor. It is not denied, however, that, if the lands in controversy passed by the swamp-land grant of 1850, they were excepted out of the subsequent railroad grant, which is the foundation of the defendant's title.

The terms of the act of congress of September 28, 1850, granted to the several states within which they were situated 'the whole of those swamp and overflowed lands, made thereby unfit for cultivation, which shall remain unsold at the passage of this act.' It was thereby made the duty of the secretary of the interior, as soon as practicable after the passage of the act, to make out an accurate list and plats of the lands described as aforesaid, and transmit the same to the governor of the state, and at his request to issue a patent to the state therefor; but 'in making out a list and plat of the land aforesaid all legal subdivisions, the greater part of which is wet and unfit for cultivation, shall be included in said list and plats; but when the greater part of a subdivision is not of that character, the whole of it shall be excluded therefrom.' The legal subdivisions contemplated by the law were 40-acre tracts.

The first instructions issued by the commissioner of the general land-office, on November 21, 1850, in execution of this act, directed the surveyors general to make out lists of the lands in each state falling within the description of the grant, based upon the notes of surveys in their offices, provided the authorities of the states were willing to adopt them; 'if not, and those authorities furnish you satisfactory evidence that any lands are of the character embraced by the grant, you will so report them.' Provision was made for surveys to be made to determine the boundaries of the swamp or overflowed lands, where the state authorities concluded to have them made, and it was added, that 'the affidavits of the county surveyor, and other respectable persons, that they understand and have examined the lines, and that the lands bounded by lines thus examined, and particularly designated in the affidavit, are of the character embraced by the law, should be sufficient. The line or boundary of the overflow that renders the land unfit for regular cultivation may be adopted as that which regulates the grant.' The lists were to be made out on forms prescribed for that purpose, and transmitted to the department, the lands selected reserved from sale, and the selections, when approved by the secretary of the interior, were directed to be entered by the register as granted to the state.

The state of Iowa adopted the alternative of making its own designations of lands claimed by it as corresponding to the description of the grant, and passed, at different times, laws directing by whom they should be made. A statute of 1853 required a full and complete return of the examination and survey of the swamp and overflowed lands, when completed by the county surveyor, or other person appointed for that purpose, to be forwarded to the secretary of state, whose duty it was to report the same to the surveyor general. A subsequent statute, passed January 25, 1855, authorized the governor to adopt such measures as to him might seem expedient to provide for the selection of the swamp lands of the state, and to secure the title thereto. The governor accordingly issued circulars, one in 1855 and one in 1858, to the county judge of the several counties, requesting the selection to be made in his county by the county surveyor or other agent, the lists thereof to be forwarded to the surveyor general, or to the secretary of state of Iowa, to be by him forwarded to the proper department for recognition and approval. The act of January 13, 1853, was carried into the Revised Statutes of the state of 1860, as follows: 'Sec. 927. In all those counties where the county surveyor has made no examinations and reports of the swamp lands within his county, in compliance with the instructions from the governor, the county court shall, at the next regular term thereof, after the taking effect of this act, appoint some competent person, who shall, as soon as may be thereafter, after having been duly sworn for that purpose, proceed to examine said lands and make due report and plats, upon which the topography of the country shall be carefully noted, and the places where drains or levees ought to be made marked on said plats, to the county courts, respectively, which courts shall transmit to the proper officers lists of all said swamp lands in each of the counties, in order to procure the proper recognition of the same on the part of the United States, which lists, after an acknowledgment of the same by the general government, shall be recorded in a well-bound book provided for that purpose, and filed among the records of the county court.'

On the trial of the cause, in the district court of Buena Vista county, the plaintiff offered in evidence a paper claimed to be a certified copy of plaintiff's list of swamp-land selections and accompanying proofs. It was headed, 'A list of the swamp and overflowed lands situated in the county of Buena Vista and state of Iows.' Then followed a list containing a description, among others, of all the lands described in the plaintiff's original petition or complaint. To this were annexed affidavits by George S. Ringland, W. H. Hait, and Zachariah Tucker, stating that, having been appointed by the county judge of Buena Vista county to select the swamp and overflowed lands in said county, 'do solemnly swear that we understand and have examined the lines bounding each of the tracts of land particularly designated in the foregoing list, and we do further solemnly swear that the greater part of each and every forty-acre tract or smallest legal subdivision therein named is swamp AND OVERFLOWED LAND, AND OF THE CHARACter embraced in the act of congress approved the twenty-eighth day of September, 1850.' And then appeared the following:

'STATE OF IOWA, Black Hawk County-ss.: I, J. W. Tucker, late     county judge of Buena Vista county, in the state of Iowa, do      solemnly swear that George S. Ringland, Zachariah Tucker, and      W. H. Hait were duly appointed by me, while county judge of      said county of said Buena Vista, as agents to select the      swamp and overflowed lands in Buena Vista county, aforesaid,      and that the agents aforesaid are reliable and responsible      men; and I do further swear that the within is the original      report of said agents, and that the correctness of the report      has been sworn to by the said agents, as will more fully      appear by the affidavits hereto attached. The reason that I do not certify said report is that, since     employing said agents, I have removed from said county of      Buena Vista to the county of Black Hawk, in said state; so      help me God.

'J. W. TUCKER.'

'Sworn to and subscribed before me this twnety-sixth day of     December, A. D. 1859. Witness, J. B. SEVERANCE, Clerk of the     District Court of Black Hawk county, Iowa, and the seal of      said court affixed, this twenty-sixth day of December, A. D.      1859, in said county and state.

[L. S.] _____ _____.'

'STATE OF IOWA, STATE LAND-OFFICE.

'I hereby certify that the foregoing report of the swamp-land     selections in Buena Vista county is recorded in this office      in Book B, pages one hundred and ninety-three to two hundred      and twenty-eight, inclusive.

'J. B. MILLER, Register.'

The introduction of this paper as evidence was objected to by the defendant below on the several grounds that the persons appearing to have made the selections had not been appointed by the county court of Buena Vista county; that there were no plats accompanying it; that there was no evidence of the appointment of the persons claiming to have examined the lands; that the affidavit of J. W. Tucker is not verified, and is not competent evidence of the facts it recites; that it is not shown the said selections were ever filed in the proper offices, or were ever approved by any officer of the state of Iowa or of the United States. The paper, however, notwithstanding these objections, was received in evidence; but no other proof was offered by the plaintiff that the lands in controversy were in fact swamp or overflowed lands, so as to be unfit for cultivation within the description of the act of congress of September 28, 1850, at the date of its passage. The district court rendered a judgment in favor of the plaintiffs, and the whole case, upon the evidence, reduced to writing and embodied in the record, was taken by appeal to the supreme court of the state. That court reversed the judgment of the district court, on the ground that the list of lands on which it was based was improperly admitted in evidence, and rendered a judgment in favor of the defendant, dismissing the plaintiff's petition. To reverse that judgment the writ of error is prosecuted. The grounds on which the supreme court of Iowa proceeded are stated in its opinion, reported in 55 Iowa, 157, (S.C.. 7 N. W. Rep. 474,) as follows: 'We think the evidence incompetent upon several grounds. Section 929 of the Revision requires that the agent shall be appointed by the county court at a regular term thereof. The proper evidence of the appointment is the production of the record of the county court. If no record was made, or it has been lost, the written appointment of the agent should be produced. If that is not available, and parol evidence of the fact is proper, the evidence should be the testimony of witnesses subject to cross-examination, and not the mere ex parte affidavit of the person making the appointment. This section does not provide that the lists so made shall be evidence of any fact. They are authorized to be made merely for the purpose of procuring the proper recognition of the same on the part of the United States, and are in the nature of a claim or demand. The lists are required to be transmitted by the county court to the proper officers for approval. The regulations and instructions of the department show that this person is the surveyor general. There is no proof that the list in question was ever transmitted to the surveyor general, or that he ever had any opportunity of passing upon it. It is not shown that this list ever came into the possession of the commissioner of the general land-office or of the secretary of the interior, or that its correctness or validity was at any time recognized by any department of the government. It is true, the surveyor general, under instructions from the department of the government, submitted forms of proof; but his instructions required that the proofs made should be transmitted to his office for approval, and to aid him in making up the lists of lands embraced in the grant, which is not shown by the evidence to have been done. So far as the evidence shows, the list constitutes no more than the claim of Buena Vista county, which has never been recognized, approved, or allowed by any department of the government. That it is exceedingly inaccurate and unreliable is evidenced by the fact that, while it embraces 551 tracts, the defendant established affirmatively and satisfactorily that 398 of them were high and dry, and fit for cultivation.'

In opposition to this conclusion, it is now claimed by the plaintiff in error that the list of lands in question was not only erroneously ruled out as incompetent evidence, but that it ought to have been accepted as sufficient and conclusive proof that the lands embraced in it were within the grant of swamp and overflowed lands, thus establishing the title of the plaintiff in error. This proposition is supposed to be supported by facts connected with the history of this list, and the made in which it has been dealt with by the state authorities, the general land-office, and the representatives of the defendant in error, whereby it is alleged an estoppel has arisen against the last named to deny the legal effect claimed for it. These facts appear in official correspondence and documents which were admitted in evidence, showing the various efforts made on behalf of the county to obtain a recognition of its claim by the interior department, and the decisions of that department which resulted in their failure. It thus appears that a list of selections for Buena Vista county was delivered to the surveyor general, but not filed by him in the general land-office, but was rejected because the lands were not both swamp and overflowed, the commissioner of the public lands having issued instructions that no lands came within the grant except such as were both swamp and overflowed. This ruling of the commissioner, however, was reversed by the secretary, September 15, 1860. The Buena Vista list remained in the office of the surveyor general, without further action thereon, until that office, in 1866, was abolished, when, with all other lists remaining there, it was removed to the general land-office. In 1869 an application was made by an agent of the state to the commissioner of the land-office to confirm the selections according to this list, which application was rejected on the ground 'that the established method of making swamp selections was through the surveyor general, and that the list in question was never reported by him, but came before this office by the removal of the archives of the surveyor general's office; that to receive them now would be in the nature of new selections, from which we are barred by the limitations of the act of March 12, 1860, (12 St. 3.)' That act required that all selections to be made thereafter from lands already surveyed under the act of September 28, 1850, should be made within two years from the adjournment of the legislature of the state at its next session after the date of the act. Upon appeal to the secretary of the interior, this decision of the commissioner was affirmed, October 23, 1871. On March 5, 1872, an act of congress took effect, (17 St. 37,) which enacted 'that the commissioner of the general land-office is hereby authorized and required to receive and examine the selections of swamp lands in Lucas, O'Brien, Dickinson, and such other counties in the state of Iowa as formerly presented their selections to the surveyor general of the district including that state, and allow or disallow said selections and indemnity provided for according to the acts of congress in force touching the same at the time such selections were made, without prejudice to legal entries and rights of bona fide settlers under the homestead or pre-emption laws of the United States at the date of this act.'

An application was made under this act, on April 21, 1875, to the commissioner of the general land-office, to adjust the claims of the county for swamp lands on the basis of its lists theretofore filed. Upon this application, the commissioner, on July 7, 1875, notified the railroad companies, to which, in the mean time, the lands in question had been certified as embraced in the grant to them, that his office had no right to refuse to make the investigation asked for 'in regard to the swampy character of these lands, and if any of them are found, on examination, to be of the description of lands granted to the state as swamp and overflowed lands, it will be the duty of the department to cause the same to be certified, and, on the request of the governor, patented to the state as such.' An appeal was taken from this decision of the commissioner to the secretary of the interior, on the ground that the subject-matter of the proceeding, so far as it related to lands already certified to the railroad companies, had passed from the jurisdiction of the department. On August 24, 1876, the acting secretary of the interior sustained the appeal and reversed the decision of the commissioner, being of opinion that no examination or certification of the lands in question should be made. Upon this recital of the proceeding in the general land-office it is claimed for the plaintiff in error:

(1) That by the terms of the act of March 5, 1872, the decision of the commissioner was intended to be final, from which no appeal would lie to the secretary.

But there is nothing in the act which alters the relation between the two officers, as otherwise established, or puts the decisions of the commissioner, under that act, upon a footing different from his other decisions; and if there were it would make no difference, for the only decision made was that the state of Iowa was entitled to the examination of the question as to the lands claimed for Buena Vista county, whether they were not swamp and overflowed lands. But he did not, in fact, enter upon the examination, and made no decision as to the character of the lands. The statement casually made in the letter of the commissioner that the state had long since claimed the lands as swamp lands, and furnished prima facie evidence that they were of that character, certainly has no value, either as evidence or adjudication, especially as he immediately adds, that 'this claim has not yet been examined by this office, and until it is so examined, and either rejected or approved, the duty of this department is not performed.'

(2) It is further claimed by the plaintiff in error that the defendant having notice of its application to the land department of its claim, based upon the list in question, and having objected to its consideration solely on the ground that the department had no jurisdiction to entertain it, which objection prevailed, is now estopped from making, in any other forum, any other objection to the list itself, or to the character of the lands described in it.

But this claim is equally without foundation. The defendant in error, if it could be considered as a party to the proceeding in the land-office, contested its jurisdiction, as it had the right to do; and, having prevailed on that point, cannot be charged with waiving other objections it was not called on to make. If the department had decided to entertain the claim, the inquiry would have been open, upon evidence from both parties, as to the actual character of the lands in question at the date of the swamp-land grant of September 28, 1850; and the department would, in that event, have decided the question of fact according to the weight of the evidence adduced by both parties bearing upon it. The very theory of the case of the plaintiff in error is that, because the officers of the land department have neglected or refused to perform their duty in determining the question of fact on which the validity of its claim depends, it has an equity to require the investigation to be made in a court of justice, which ought to have been made by them, so that if, in point of fact, the lands claimed passed under the terms of the grant, the legal title wrongfully granted to the defendant may be decreed to it. According to the principle stated in the case of the Railroad Co. v. Smith, 9 Wall. 95, the same evidence which might have been required in the land-office would be necessary to establish the plaintiff's claim in a court of equity, which would not decree the defendant to convey to the plaintiff the legal title, unless clearly satisfied, by full proof of the disputed fact, that the lands in controversy were swamp and overflowed lands at the date of the act of congress of September 28, 1850. The plaintiff in error did not choose to go into a trial of that issue, and rested its case simply upon the list purporting to be the selection on behalf of the county of its swamp and overflowed lands. That instrument had no value as evidence, as to the only matter in issue, for the reasons given by the supreme court of Iowa.

Other errors are assigned upon the record, relating, however, to matters of pleading and practice under the laws of the state, which, as they involve no federal question, are not proper for our consideration. The judgment of the supreme court of Iowa is accordingly affirmed.


text: Talk:County of Buena Vista v. Iowa Falls South Carolina Railroad/Opinion of the Court


text:
Crouch

''Wm. L. Royall'', for motion.

WAITE, C. J.

This petition is denied. The general revenue law of Virginia provides that no person shall do business in the state as a 'sample merchant' until he has obtained a license therefor, on payment of a tax of $75, and that if he does he shall pay a fine of $500 for the first offense, and $600 for each succeeding offense. Acts Va. 1884, c. 445, §§ 30, 31, pp. 578, 579. The petitioner has been informed against, and is now held in custody for trial by order of the hustings court of the city of Richmond, for a violation of this law. According to the statements in the petition presented to us, the defense of the petitioner, upon the trial of that case, will be a tender by him, before commencing business, to the proper revenue officer of the state, of the amount of the required license tax, in coupons cut from state bonds, which the state when it issued the bonds agreed should be receivable in payment of all state dues; and a refusal of the officer to accept the tender and give a proper certificate therefor, because by a statute enacted after the issue of the bonds the tax-receiving officers were prohibited from taking the coupons for this tax. The right of the petitioner to a writ of habeas corpus from this court is put in the petition on the ground that the petitioner is detained in custody by the state court in violation of the constitution of the United States, because the statute which prohibits the officer from accepting the coupons impairs the obligation of the contract of the state to receive them, and is on that account inoperative and void, by reason of the provision of the constitution which precludes the states from passing such laws.

title: Crouch


text: Talk:Crouch

title: Talk:Crouch


text:
Crouch/Opinion of the Court

It is not claimed that the law which imposes the tax and fixes the penalty for doing business without its payment is unconstitutional. Neither is it pretended that the hustings court has not plenary jurisdiction for the trial of persons charged with a violation of the law. The petitioner is, therefore, in the custody of a state court of competent jurisdiction, and held for trial upon an information for violating a criminal statute of the state. He seeks to be discharged by habeas corpus, not because, if guilty of the charge which has been made against him the court is without jurisdiction to hold him for trial and to convict and sentence him, but because, as he alleges, he has a valid defense to the charge, which grows out of a provision in the constitution of the United States; and, for this reason, he insists he is detained in violation of the constitution. It is elementary learning that if a prisoner is in the custody of a state court of competent jurisdiction, not illegally asserted, he cannot be taken from that jurisdiction and discharged on habeas corpus issued by a court of the United States, simply because he is not guilty of the offense for which he is held. All questions which may arise in the orderly course of the proceeding against him are to be determined by the court to whose jurisdiction he has been subjected, and no other court is authorized to interfere to prevent it. Here the right of the prisoner to a discharge depends alone on the sufficiency of his defense to the information under which he is held. Whether his defense is sufficient or not is for the court which tries him to determine. If, in this determination, errors are committed, they can only be corrected in and appropriate form of proceeding for that purpose. The office of a writ of habeas corpus is neither to correct such errors nor to take the prisoner away from the curt which holds him for trial, for fear, if he remains, they may be committed. Authorities to this effect in our own reports are numerous. Ex parte Watkins, 3 Pet. 202; Ex parte Lange, 18 Wall. 166; Ex parte Parks, 93 U.S. 23; Ex parte Siebold, 100 U.S. 374; Ex parte Virginia, Id. 343; Ex parte Rowland, 104 U.S. 612; Ex parte Curtis, 106 U.S. 375; S.C.. 1 SUP. CT. REP. 381; Ex parte Yarbrough, 110 U.S. 653; S.C.. 4 SUP. CT. REP. 152. Of course, what is here said has no application to writs of habeas corpus cum causa, issued by the courts of the United States in aid of their jurisdiction upon the removal of suits or prosecutions from state courts for trial under the authority of an act of congress. Denied.

title: Crouch/Opinion of the Court


text: Talk:Crouch/Opinion of the Court

title: Talk:Crouch/Opinion of the Court


text:
Ex parte Royall (112 U.S. 181)

''Wm. L. Royall'', for motion.

WAITE, C. J.

title: Ex parte Royall (112 U.S. 181)


text: Talk:Ex parte Royall (112 U.S. 181)

title: Talk:Ex parte Royall (112 U.S. 181)


text:
Ex parte Royall (112 U.S. 181)/Opinion of the Court

The petition which we are asked to grant permission to file prays for a writ of certiorari commanding 'the clerk of the circuit court of the United States for the Eastern district of Virginia to certify to this court a full, true, and perfect transcript of the record, judgment, and proceedings had in the circuit court,' under a writ of habeas corpus, issued by that court on the application of the petitioner, for the purpose of an inquiry into the cause of his detention by the hustings court of the city of Richmond for trial upon an indictment found against him in that court. The circuit court refused to discharge the prisoner, but, on his 'stating that he intended to apply to this * *  * court to review the order made by the circuit court,' that court admitted him 'to bail, the condition of his bond being that he should appear here on the first day of the present term, *  *  * and if this court should fail to make any order in the case, then to appear before the *  *  * circuit court, *  *  * and abide by the further order of that court.' The petition further prays that this court 'may make all such other orders as *  *  * petitioner's case may require, and as may be necessary to give him the full protection of the constitution and laws of the United States. That the cause of * *  * petitioner's unlawful custody may be inquired into, and that the erroneous judgment of the circuit court may be reviewed and reversed, and *  *  * petitioner restored to the liberty of which he has been illegally and unconstitutionally restrained.'

This court has no jurisdiction, under the form of an appeal or writ of error, to review a decision of a circuit court upon a writ of habeas corpus in the case of a person 'alleged to be restrained of his liberty in violation of the constitution or of any law or treaty of the United States.' Such an appeal was given by the act of February 5, 1867, c. 28, (14 St. 385,) but it was taken away by the act of March 27, 1868, c. 34, (15 St. 44,) and has never been restored.

In Ex parte Yerger, 8 Wall. 103, it was held 'that, in all cases where a circuit court of the United States has, in the exercise of its original jurisdiction, caused a prisoner to be brought before it, and has, after inquiring into the cause of detention, remanded him to the custody from which he was taken, this court, in the exercise of its appellate jurisdiction, may, by the writ of habeas corpus, aided by the writ of certiorari, review the decision of the circuit court, and, if it be found unwarranted by law, relieve the prisoner from the unlawful restraint to which he has been remanded.' The jurisdiction is acquired by this court in such a case through its own writ of habeas corpus, and, until that is issued, there is no power to proceed. In the present case no such writ is asked for, and, as the circuit court has not yet remanded the prisoner to the custody from which he was taken, he is in no condition to apply for one under the ruling in Yerger's Case. We know of no authority in the circuit court to take a bond from a prisoner brought before it, by its own writ of habeas corpus, to appear in this court to answer that writ. It follows that, if we had before us the record which it is sought to bring up by the certiorari, we could not proceed to a review of the decision complained of, and the motion for leave to file a petition for the writ is denied.


text: Talk:Ex parte Royall (112 U.S. 181)/Opinion of the Court


text:
Scotland Company v. Hill

H. A. Cunningham, for plaintiff in error.

A. J. Baker and F. T. Hughes, for defendant in error.

WAITE, C. J.

title: Scotland Company v. Hill


text: Talk:Scotland Company v. Hill

title: Talk:Scotland Company v. Hill


text:
Scotland Company v. Hill/Opinion of the Court

This case differs from that of County of Scotland v. Thomas, 94 U.S. 682, in one important particular. The fourth plea avers that after the bonds, from which the coupons sued for were cut, had been executed by the officers of the county court, they were placed in the hands of Charles Metz, as trustee of the county; that on the eleventh of September, 1871, while they were in his hands, Levi Wagner and other citizens and tax-payers of the county brought a suit against him, the justices of the county court, the treasurer of the county, and the Missouri, Iowa & Nebraska Railway Company, in the circuit court of the county, the object and purpose of which was to enjoin Metz from delivering the bonds to the railroad company, and to have them declared void and canceled for want of authority in the county to subscribe to the stock of the company; that all the defendants were served with process and appeared in the suit; that a preliminary injunction was allowed as prayed for; and that, upon final hearing, a decree was rendered, which was afterwards affirmed by the supreme court of the state, declaring the bonds void for want of authority in the county to subscribe to the stock of the railroad company, and directing that they be delivered up for cancellation. The plea then further avers that Metz delivered the bonds to the railroad company after this suit was begun and after the preliminary injunction was granted, and that Hill, the plaintiff, and all the persons who have ever held the coupons sued for, took them without giving value therefor, 'and with full, actual notice of every fact' in the plea set forth. Issue was taken on this plea, and at the trial the county offered in evidence the record in the Wagner suit. To the introduction of this evidence the plaintiff objected, 'on the ground that the bonds were delivered to the railroad company before any injunction was issued, and that the bond is a legal act of the county and valid in anybody's hands.' This objection was sustained. The county then offered in evidence, after due proof of execution, a bond executed by the railroad company to Metz on the twenty-first of September, 1871, to indemnify him 'against all damages, costs, expenses, etc., which the said Metz, as trustee of the county of Scotland, aforesaid, * *  * may incur by reason of certain injunction suits now pending in the Scotland county circuit court, or by reason of any petition for injunction which may be filed before Judge E. V. WILSON, in Clark county, Missouri, on September 22, 1871.' This was objected to, and the objection sustained. The defendant then 'offered to prove by Charles Metz, the agent named in the pleadings, that he had actual notice of the pendency of the aforesaid suit of Levi Wagner et al. v. Metz et al., at the time he delivered the instruments (described in the defendant's pleading) to the Missouri, Iowa & Nebraska Railway Company, and offered to prove that the Missouri, Iowa & Nebraska Railway Company, and each subsequent holder, received the instruments referred to in the plaintiff's petition with actual notice of the pendency of the aforesaid suit * *  * as set up in the fourth count of this answer.' This was also objected to and the objection sustained. To all these rulings, excluding testimony, exceptions were duly taken; and error is assigned here thereon.

All this evidence was, in our opinion, improperly excluded. The decree in the Wagner suit was set up as a bar to the action, on the ground that the liability of the county for the coupons was res judicata between the parties. The suit, although brought by citizens and tax-payers of the county, was, in effect, the same as though brought by the county itself to test the validity of the subscription which had been made to the stock of the company, and the power of the county court to bind the county to pay the bonds which it was proposed to issue for the subscription. The county was itself a party through the justices of the county court, which, in Missouri, is the governing board and represents the county in all such matters. The whole purpose of the suit was to keep the bonds from the market as commercial paper, and to have them canceled. The suit was about the bonds and the liability of the company thereon. The decree was in accordance with the prayer of the bill, and certainly concluded both Metz and the railroad company. After the rendition of this decree the company could not sue and recover on the bonds, because, as between the company and the county, it had been directly adjudicated that the bonds were void, and of no binding effect on the county. But it is equally well settled that the decree binds not only Metz and the company, but all who bought the bonds after the suit was begun, and who were chargeable with notice of its pendency, or of the decree which was rendered. The case of County of Warren v. Marcy, 97 U.S. 96, decides that purchasers of negotiable securities are not chargeable with constructive notice of the pendency of a suit affecting the title or validity of the securities; but it has never been doubted that those who buy such securities from litigating parties, with actual notice of the suit, do so at their peril, and must abide the result the same as the parties from whom they got their title. Here the offer was to prove actual notice, not only to the plaintiff when he bought, but to every other buyer and holder of the bonds from the time they left the hands of Metz, pending the suit, until they came to him. Certainly, if these facts had been established, the defense of the county, under its fourth plea, would have been sustained; and this, whether an injunction had been granted at the time the bonds were delivered by Metz or not. The defense does not rest on the preliminary injunction, but on the final decree by which the rights of the parties were fixed and determined.

It is claimed, however, that error cannot be assigned here on the exception to the exclusion of the oral proof, because the record does not show that any witness was actually called to the stand to give the evidence, or that any one was present who could be called for that purpose, if the court had decided in favor of admitting it, and we are referred to the cases of Robinson v. State, 1 Lea, (Tenn.) 673, and Eschbach v. Hurtt, 47 Md. 66, in support of that proposition. Those cases do undoubtedly hold that error cannot be assigned on such a ruling, unless it appears that the offer was made in good faith, and this is in reality all they do decide. If the trial court has doubts about the good faith of an offer of testimony, it can insist on the production of the witness, and upon some attempt to make the proof, before it rejects the offer; but if it does reject it, and allows a bill of exceptions which shows that the offer was actually made and refused, and there is nothing else in the record to indicate bad faith, an appellate court must assume that the proof could have been made, and govern itself accordingly.

It is evident from the whole record that the court below proceeded on the theory that the decree in the Wagner suit could not conclude the plaintiff, and that, consequently, it was a matter of no importance whether he had notice of the pendency of the suit or not. In our opinion, the error began with the exclusion of the record in that suit. As notice of the pendency of the suit was, however, necessary to bind the plaintiff by the decree, proof of that fact was offered, so that the question as to the effect of the decree upon this suit might be properly presented for review if deemed advisable. The court below seems not to have doubted the good faith of the offer, and so ruled against it without first requiring the defendant to produce his witnesses and show his ability to furnish the testimony if allowed to do so. It is a matter of no importance whether the decision in the Wagner suit was in conflict with that of this court in Scotland Co. v. Thomas, supra, or not. The question here is not one of authority but of adjudication. If there has been an adjudication which binds the plaintiff, that adjudication, whether it was right or wrong, concludes him until it has been reversed or otherwise set aside in some direct proceeding for that purpose. It cannot be disregarded any more in the court of the United States that in those of the state.

Without considering any of the other questions which have been argued, we reverse the judgment and remand the cause for a new trial.


text: Talk:Scotland Company v. Hill/Opinion of the Court


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Ayres v. Wiswall

John Atkinson and John F. Dillon, for appellants.

J. H. McGowan and W. T. Mitchell, for appellees.

WAITE, C. J.

title: Ayres v. Wiswall


text: Talk:Ayres v. Wiswall

title: Talk:Ayres v. Wiswall


text:
Ayres v. Wiswall/Opinion of the Court

This is an appeal, under section 5 of the act of March 3, 1875, c. 137, (18 St. 470,) from an order of the circuit court remanding a case which had been removed from a state court. The suit was brought on the fifteenth of April, 1879, in the circuit court of Huron county, Michigan, by the appellees, citizens of New York, against Ebenezer Wiswall, also a citizen of New York; Ebenezer R. Ayres, a citizen of Ohio; Frederick S. Ayres, James S. Ayres, Charles G. Learned, citizens of Michigan, and many others whose citizenship does not appear, to foreclose a mortgage executed by Frederick S. Ayres, Charles G. Learned, and Ebenezer Wiswall, to Catharine E. Wiswall, a citizen of New York, to secure a debt owing by them jointly to her. This mortgage and the debt it secured were assigned to the appellees before the suit was brought. After the mortgage was made, Ebenezer Wiswall contracted in writing to sell to Frederick S. Ayres his interest in the mortgaged property, subject to the mortgage debt, which Ayres assumed to pay as part of the consideration money. Afterwards, Learned sold and transferred to Ebenezer R. Ayres all his remaining interest in a part of the mortgaged property, subject to the mortgage, which Frederick S. Ayres, James S. Ayres and Ebenezer Ayres bound themselves to pay. Between the time of the execution of the mortgage and the commencement of the suit, the mortgagors and their grantees sold and conveyed a large number of the parcels of the mortgaged property to various persons whose citizenship does not appear. All these purchasers were made parties. The bill, after setting forth the execution of the mortgage, and the various transfers and conveyances, and giving credit for certain payments on the mortgage debt, prayed that Frederick S. Ayres, Charles G. Learned, and Ebenezer Wiswall be decreed to pay the amount found due on the mortgage debt, and in default that the property, or so much thereof as was necessary, might be sold and the proceeds applied to that purpose. It further prayed for execution against Frederick S. Ayres, Charles G. Learned, Ebenezer Wiswall, and James S. Ayres for any balance of the debt which might remain due after the property was exhausted. Ebenezer Wiswall and Learned filed separate answers to the bill, in which they admitted the execution of the mortgage and the debt for the security of which it was given, and asked that their respective grantees, who had assumed the payment of the mortgage debt, might be decreed to be first personally liable for any money decree that should be rendered. Frederick S. Ayres and James S. Ayres also answered, denying that the original debt for which the mortgage was executed amounted to as much as it was stated in the mortgage to be, and averring that other payments had been made beyond those stated in the bill. They insisted that there was not more than $20,000 due, and this they offered to pay.

In this state of the pleadings, Frederick S. Ayres, James S. Ayres, and Ebenezer R. Ayres, on the twenty-eighth of November, 1879, filed in the state court a petition, accompanied by the necessary bond, for the removal of the cause to the circuit court of the United States for the Eastern district of Michigan. The parts of the petition material to the present inquiry are as follows: 'That said complainants are, and were at the time said suit was commenced, citizens of New York; that your petitioners Frederick S. Ayres and James S. Ayres are, and were when said suit was commenced, citizens of Michigan, and your petitioner Ebenezer R. Ayres is, and was when said suit was commenced, a citizen of Ohio; that in said suit, which is for the foreclosure of a mortgage on a large tract of land in the Eastern district of Michigan, there is a controversy which is wholly between said complainants and these petitioners, and which can be fully determined, as to them, without the presence of the other defendants.' Under this petition the case was taken to the circuit court of the United States, where it remained until the twenty-ninth of December, 1881, and until after a hearing, and a decree finding the amount due on the mortgage and ordering a sale of the property. While the case was in the United States court, Ebenezer R. Ayres filed an answer, presenting substantially the same issues as those of Frederick S. and James S., in the state court. On the twenty-ninth of December, 1881, and during the same term in which the final decree was rendered, the following order was made: 'It appearing to the court that the record in this cause was improperly removed to the court from the circuit court of the county of Huron, in chancery, and that this court hath not jurisdiction of the cause, it is ordered that the proceedings had thereon in this court be, and the same are hereby, set aside and held for naught, and that the said cause be remanded to the said circuit court for Huron county, in chancery, and that this cause be dismissed from this court for want of jurisdiction.' From this order the present appeal was taken on the twelfth of November, 1883.

The fifth section of the act of March 3, 1875, makes it the duty of the circuit court of the United States to remand a cause which has been removed from a state court when it shall appear to the satisfaction of the court, at any time after the suit has been removed, that such suit does not really and substantially involve a dispute or controversy properly within the jurisdiction of the court. For this purpose the circuit court retained its power over the suit and the parties until the end of the term at which the final decree was rendered. The parties were not, in law, discharged from their attendance in the cause until the close of the term, and the decree, though entered, was 'in the breast of the court' until the final adjournment. Bac. Abr. tit. 'Amendment and Jeofail,' A; Ex parte Lange, 18 Wall. 163; Goddard v. Ordway, 101 U.S. 752. The order to remand can be made at any time during the pendency of the cause when it shall appear there is no jurisdiction. The fact that Ebenezer R. Ayres had filed his answer in the United States court is a matter of no importance. That fact did not of itself confer jurisdiction if there had been none before. It will be for the state court, when the case gets back there, to determine what shall be done with pleadings filed and testimony taken during the pendency of the suit in the other jurisdiction. The suit was brought for the foreclosure of the mortgage, and a personal money decree for any balance that might remain due on the debt after the security of the mortgage was exhausted. The mortgage and the debt it secured presented the subject-matter of the controversy in the case. Ebenezer Wiswall was one of the mortgagors and one of the debtors. The relief sought was against him and the other defendants. It involved a finding of the amount due from him and the others who were bound for the payment of the debt, and in a certain event an order for an execution against him personally for the collection of the money. The debt was a unit. Whatever sum was due from one was also due from all who were chargeable with its payment. There could not be a decree against a part of the defendants for one sum, and against the rest for another. Although Wiswall did not contest the amount of the claim of the complainants as set out in their bill, Frederick S. Ayres, one of the joint debtors, did; and if he succeeds in his defense it will, of necessity, inure to the benefit of Wiswall. The matter in dispute between the parties on the opposite side of the suit to enforce the mortgage was the amount due on the mortgage debt. The complainants, citizens of New York, are on one side of the suit, and Ebenezer Wiswall, also a citizen of New York, and others, citizens of Michigan and Ohio, on the other. If the claim of the complainants is sustained, the decree will be against all the defendants. In order that the complainants may get all the relief they ask, and which, upon their showing in the bill, they are entitled to, Wiswall is a necessary and substantial party to the suit, and on the opposite side from them.

The material facts of this case are entirely different from those in the Removal Cases, 100 U.S. 457, where there was one controversy between the construction company and the railroad company as to the existence of a mechanics' lien, and the amount due thereon, and another between the construction company and certain mortgage trustees as to the priority of their respective liens. In the progress of the cause, the mechanics' lien was established against the company, and the property sold under the lien to pay the mechanics' debt. This ended that controversy. There then remained to be settled the other controversy between the construction company and the mortgage trustees, and we held that, as the railroad company was not interested in that dispute, it was to be treated as a nominal party only. It stood indifferent between the two real parties. No decree was asked against it, and the rights of the parties who were really contending could be fully settled without its presence. So, in Pacific R. R. v. Ketchum, 101 U.S. 298, we held that the trustees of a mortgage, which was being foreclosed at the suit of bondholders, might properly be arranged on the same side of the controversy about the foreclosure with the complainants, although they were nominally defendants, because there was no antagonism between them and the complainants, and no relief was asked against them. Here, however, relief is asked against Wiswall, and it grows directly out of the subject-matter of the action, to-wit, the collection of the mortgage debt which Wiswall owes jointly with the other debtors.

It follows that, as Wiswall was a citizen of the same state with the complainants, the suit was not removable under the first clause of section 2 of the act of 1875. All the parties on one side of the controversy were not citizens of different states from those on the other. Removal Cases, supra.

It remains to consider whether it was removable under the second clause on the ground that there was in the suit 'a controversy which is wholly between citizens of different states, and which can be fully determined as between them.' The petition for removal was framed to meet this provision of the statute. What we have already said applies equally well to this branch of the case. The rule is now well established that this clause in the section refers only to suits where there exists 'a separate and distinct cause of action, on which a separate and distinct suit might have been brought and complete relief afforded as to such cause of action, with all the parties on one side of that controversy citizens of different states from those on the other. To say the least, the case must be one capable of separation into parts, so that, in one of the parts, a controversy will be presented with citizens of one or more states on one side and citizens of other states on the other, which can be fully determined without the presence of the other parties to the suit as it has been begun.' Fraser v. Jennison, 106 U.S. 194; S.C.. 1 SUP. CT. REP. 171. As has already been seen, this is not such a case. There is here but one cause of action. The personal decree which is asked against Wiswall is incident to the main purpose of the suit. It presents no separate cause of action. The fact that separate answers were filed which raised separate issues in defending against the one cause of action, does not create separate controversies within the meaning of that term as used in the statute. They simply present different questions to be settled in determining the rights of the parties in respect to the one cause of action for which the suit was brought. Hyde v. Ruble, 104 U.S. 407; Winchester v. Loud, 108 U.S. 130; S.C.. 2 SUP. CT. REP. 311; Shainwald v. Lewis, Id. 158; S.C.. 2 SUP. CT. REP. 385.

It follows that the suit was properly remanded, and the order of the circuit court to that effect is, consequently, affirmed.

title: Ayres v. Wiswall/Opinion of the Court


text: Talk:Ayres v. Wiswall/Opinion of the Court


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Great Western Insurance Company v. United States

E. Y. Bell, A. J. Millard, S. G. Clarke, and E. B. Smith, for the Great Western Ins. Co. ''Sol. Gen. Phillips'', for the United States.

MILLER, J.


text: Talk:Great Western Insurance Company v. United States