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which have been established, and because of the advance of the money by the National Bank of Illinois in the manner stated, and its repay. ment to the bank by the board; the money of the board thus being given to Kerr, and the two notes of $25,000 each being transferred over by Mr. Morgan, as already stated, to the secretary of the board, and the $21,000 being 80 soon reimbursed by the board after its payment by the bank. It would seem, therefore, to be a case where the money can be followed into the property which is now held by a trustee rather than because a trust actually existed, as where money is paid by one person and the land has been transferred to another, that the board would be entitled to hold the property.

I think that the facts of the case show that the board of South Park Commissioners is entitled to follow this money into the land, inasmuch as it was transferred to Ingals under the circumstances already stated, and his grantee now holds it in trust, and, strictly speaking, in equity he ought to be adjudged to hold it subject to the rights of the board of commissioners; but not absolutely, because if they can be placed in the position they were before the money was advanced, Kerr is entitled to any equity which may exist in consequence of that being done. For, as bas already been stated, he did not agree that this money should be advanced, and the property held by Ingals for the benefit of the South Park Commissioners, except sub modo, namely, subject to the conditions of the contract of May, 1879, to which contract the board of South Park Commissioners as a corporation was never a party; and therefore it seems to me that it is the duty of the court, if a decree requiring Mr. Doolittle to convey the property to the board of South Park Commissioners would do any injustice to Mr. Kerr, as it might, to give him the privilege of placing the board in statu quo by refunding the money, with interest. I am inclined to think, as the board holds the Dobbins notes, that they should be paid in full before the plaintiff should be clothed with the absolute title to the property; and as there does not seem to have been enough money advanced to make that payment, with the interest on the notes, in addition to the $21,000 which would constitute the consideration for the transfer of the Dobbins title, whatever deficiency there is ought to be made up by the board before Ingals is required to convey his title to the plaintiff.

These I consider to be the equities of the parties under the facts which are established in the case, and in which the argument of counsel has been made; but it is not possible for the court to render

a decree în favor of the plaintiffs upon the bill which has been filed. The proof and the allegations of the bill do not correspond. The facts alleged in the bill, and upon which the court must make a decree if the pleadings should stand, are different from those established by the proof. For example, it is stated in the bill that Mr. Morgan received this money as the agent of the board; that he disbursed it, and in consequence of his receipt and disbursement of the money the equity of the plaintiffs exists. In point of fact, he never received any money. He merely transferred by indorsement a warrant for the $7,200 to the agent of Kerr, who himself received the money, and Mr. Morgan never touched any portion of the rest of the money, as the evidence clearly shows. In any event, therefore, before the court could give the plaintiffs the benefit of the equity to which it is entitled, there would have to be an entire remodeling of the bill.

The bill was afterwards amended, and a decree rendered in conformity with the opinion here expressed.

RALSTON and others, Trustees, o. CRITTENDEN, Governor, and others.*

(Circuit Court, W. D. Missouri, E. D. August 8, 1882.)

1. EQUITY-ACCOUNTING—INTEREST ACT OF MARCA 26, 1881.

Under the provisions of the act of the general assembly of Missouri of March 26, 1881, it was the duty of the state officials to invest the $3,000,000 paid in by the Hannibal & St. Joseph Railroad Company as soon as practicable in the bonds and securities specified in said act, or some of them, and so save to the state as large a sum as possible, which sum so saved would have consti. tuted, as between the state and complainants, a credit pro tanto upon the unmatured coupons now in controversy; and the state, in adjusting its claim against said railroad, must be held liable and chargeable with what could have been saved to the state by the investment of said $3,000,000 within a reasonable time after its payment. The sale of the railroad for the amount of interest due on coupons, which amounts to less than the sum which the company must pay in order to discharge its liability to the state, will be enjoined; and, upon the payment of interest due, such payment will be taken into account by the

master to whom the case is referred in adjusting the account. 2. STATUTES—WHEN MANDATORY.

Even if the terms of a statute are permissive only, and mean no more than the words generally employed in statutes, importing a grant of authority or power to a public officer to do a certain act, still it is well settled that all such acts are to be construed as mandatory whenever the public interests or indi. widual rights call for the exercise of the power conferred.

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*See 7 Sup. Ct. Rep. 599.

John F. Dillon, Elihu Root, Wager Swayne, and George W. Easley, for complainants.

Glover & Shepley, Henderson & Shields, and D. H. McIntyre, Atty. Gen., for respondents.

MOCRARY, C. J. By a series of legislative acts, beginning with the act approved February 22, 1851, and ending with that of March 26, 1881, the state of Missouri aided with great liberality in the construction of a system of railroads in that state.

Among the enterprises thus largely assisted was the Hannibal & St. Joseph Railroad, for the construction of which the bonds of the state to the amount of $3,000,000, bearing interest at 6 per cent. per annum, payable semi-annually, were issued. One-half of this amount was issued under the act of 1851, and the remainder under the act of 1855. The bonds issued under the former act were to run 20 years, and those under the latter act were to run 30 years. Some of the bonds have since been funded and renewed. Coupons for the interest on the entire $3,000,000 were executed and made payable in New York. These acts contain numerous provisions intended to secure the state against loss, and to require the railroad company to pay the interest and principal at maturity. Upon the hearing of the application for a preliminary injunction in this case, the question of the true construction and effect of this leglislation was fully considered, and the conclusion reached, as announced by Mr. Justice Miller, was, that it was made the duty of the railroad company to save and keep the state from all loss on account of said bonds and coupons. The treasury of the state was to be exonerated from any advance of money to meet either principal or interest. The state contracted with the railroad company for complete indemnity. She was required to assign her statutory mortgage lien only upon payment into the treasury of a sum of money equal to all indebtedness due or owing by said company to the state, and all liabilities incurred by the state by reason of having issued her bonds and loaned them to the company. The unpaid and unmatured coupons constituted a liability of the state, and a debt owing, though not due, and until these are provided for, the state is not bound to assign her lien upon the road. Such was the view of the statutes taken by the court upon the former hearing, and I am not disposed to depart from it.

Another question which was mooted at the former hearing, but not decided, is now, by the amended bill, presented for determination. It is this: What, if any, account is the state to render of the use of the $3,000,000 paid into the treasury by the complainants on the

twentieth of June, 1881? Can she hold that large sum of money, refusing to make any account of it, and still insist upon full payment by the railroad company of all outstanding coupons ?

Upon this subject Mr. Justice Miller, in the course of his opinion upon the former hearing, said:

“I am of the opinion that the state, having accepted or got this money into her possession, is under a moral obligation (and I do not pretend to commit anybody as to how far its legal obligation goes) to so use that money as, so far as possible, to protect the parties who have paid it against the loss of the interest which it might accumulate, and which would go to extinguish the interest on the state's obligations."

In order to determine whether this obligation is one which may be enforced by a court of equity, it is necessary to consider the force and effect of the act of the general assembly of Missouri, approved March 26, 1881, and which is as follows: "An act to provide for the transfer to the state sinking fund any surplus

money that may be in the state treasury, not necessary to defray the current expenses of the state government, and to meet the appropriations made by law, and to authorize the fund commissioners to invest the same in the redemption or purchase of bonds of the state and bonds of the

United States, Hannibal & St. Joseph bonds excepted. “Be it enacted by the general assembly of the state of Missouri, as follows:

“Section 1. Whenever there is any money in the state treasury not necessary to defray the current expenses of the state government, and to meet the appropriations made by law, it shall be the duty of the state auditor, and he is hereby authorized and required to transfer the same to the credit of the state sinking fund, for the purpose of paying the state debt, or any portion thereof, and the interest thereon as it becomes due.

“Sec. 2. Whenever there is sufficient money in the sinking fund to redeem or purchase one or more of the bonds of the state of Missouri, such sum is hereby appropriated for such purpose, and the fund commissioners shall immediately call in for payment a like amount of the option bonds of the state, known as • 5-20 bonds,' provided that if there are no option bonds which can be called in for payment, they may invest such money in the purchase of any of the bonds of the state, or bonds of the United States, the Hannibal & St. Joseph railroad bonds excepted.

“Approved March 26, 1881."

This act was passed in response to a special message of Governor Crittenden, dated February 25, 1881, in which he informed the legislature of the purpose of the Hannibal & St. Joseph Company to discharge the full amount of “what it claims is its present indebtedness to the state," and advised that provision be made for the "profitable disposal" of the sum when paid. It will be seen that the act not

only authorized, but required, the auditor to transfer the sum when received “to the credit of the state sinking fund for the purpose of paying the state debt, or any portion thereof, and the interest thereon as it becomes due.”

And it furthermore required the fund commissioners, whenever there should be in the sinking fund a sum sufficient to purchase one or more of the bonds of the state, immediately to call in for payment option bonds of the state, known as “5-20 bonds," provided that if no such bonds are subject to call, the money may be invested in the purchase of bonds of the state or bonds of the United States. The purpose of this enactment evidently was to enable the officials of the state to receive the $3,000,000, and to immediately invest in the securities named, or some of them. Under the constitution of the state, no money can be drawn from the treasury except in pursuance of an appropriation, and as it was foreseen that this sum might be received at a time when the legislature was not in session, the act made the necessary appropriation in advance. The legislature wisely determined that so large a sum should not be allowed to remain in the treasury for an indefinite period unused and earning no income. It is true that the act does not specifically mention the $3,000,000 to be paid on account of the state aid bonds issued to the Hannibal & St. Joseph Railroad Company, but it clearly appears that it was passed with direct reference to that fund, and in response to the message of the governor asking that provision be made for its investment. The act was undoubtedly a part of the legislation relating to this loan, and if it did not enter into and become a part of the contract between the parties in interest, it was, at all events, binding upon the state, and the complainants had a right to rely upon it, and to pay their money to the treasurer upon the faith of it, and with the expectation that it would be obeyed and executed. Can the state disregard it, and still hold the railroad company bound for the unmatured interest to the same extent as if the $3,000,000 had not been paid ? That such a view of the rights and duties of the state would be in the last degree inequitable, is too plain for argument. The state aid bonds have an average of about 10 years to run, so that the interest to be provided for amounts to about $1,800,000. The $3,000,000 now in the state treasury paid by complainants will produce nearly the whole of this sum if the officers of the state will invest it in obedience to the positive requirements of the statute. By executing the law the state can save this large sum to complainants and

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