Aurora City v. West
74 U.S. 82 (1868)

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U.S. Supreme Court

Aurora City v. West, 74 U.S. 7 Wall. 82 82 (1868)

Aurora City v. West

74 U.S. (7 Wall.) 82

Syllabus

1. In a case having long and complicated pleadings, where a second count of a declaration has been left by the withdrawal of a plea without an answer, so that judgment might have been bad on it by nil dicit, a superior court will not, on error, infer as of necessity that a judgment below for the plaintiff was thus given, the case being one where, after such withdrawal, there were numerous demurrers, pleas, replications, and rejoinder arising from a first count, and the proceedings showing that these were the subject of controversy. The second count will be taken to be waived.

2. A reversal in a court of last resort, remanding a case, cannot be set up as a bar to a judgment in an inferior court on the same case.

3. The rule that judgment will be given against the party who commits the first fault in pleading does not apply to faults of mere form.

4. The plea of res judicata applies to every objection urged in a second suit when the same objection was open to the party within the legitimate scope of the pleadings in a former one and might have been presented in it.

5. Interest warrants or coupons in a negotiable form draw interest after payment of them is unjustly neglected or refused.

The charter of the City of Aurora authorized its council, whenever a majority of its qualified voters required it, to take stock in any chartered company for making "roads" to that city, and to make and sell their bonds to pay for it. With this power, the city, in 1852, issued $50,000 of bonds to the Ohio and Mississippi Railroad Company, a company whose charter authorized it to survey, locate, and construct a railroad "on the most direct and practicable route" between Lawrenceburg on the Ohio and Vincennes on the Wabash. The bonds recited that they were issued in payment of a subscription to stock in the Ohio & Mississippi Railroad Company, made by the city by order of the common council, in pursuance of its charter.

The bonds all passed from the company to West & Torrence, and the interest, due January 1, 1856, not being paid, these persons brought suit on them at May Term 1856, in the Dearborn County Court of Indiana for payment.

Page 74 U. S. 83

The declaration alleged that the city, under the authority of its charter, subscribed for $50,000 of the stock of the company; that the company was chartered to construct, and was then constructing, a railroad to the said city; that a majority of the qualified voters had assented to the subscription; that the city issued and sold the bonds to raise the funds to pay for the stock, and that the plaintiffs purchased them.

The city pleaded: 1. That the location of the railroad was not established through the city till after the subscription. 2. That the company was not chartered to construct, and was not, at the date of the subscription, constructing a railroad to the city.

To the first plea the plaintiffs demurred, and the demurrer was sustained; and to the second they replied, that the company located their railroad through the city before the bonds were delivered.

The defendants demurred to the replication, but the court overruled the demurrer.

The concluding statement of the record was that "the said city, not desiring to controvert the facts stated in said reply, but admitting the same," judgment was rendered for the plaintiffs.

Other sets of coupons subsequently falling due, West & Torrence, at May Term 1861, brought suit on them in the same Dearborn court on pleadings much the same as the other and obtained judgment against the city. This judgment was reversed for error in the Supreme Court of Indiana and the cause remanded.

Subsequent sets of coupons being unpaid, West & Torrence brought suit on them in the Circuit Court of the United States for Indiana.

The declaration in this third suit recited, "for that whereas" the city, by virtue of power given in its charter, had lawfully, and in due form, "and for a valuable consideration," executed and issued the bonds, and that the plaintiffs, "for a valuable consideration had become the legal holders, and owners, and bearers" of them, and the city had refused to pay, a right of action had accrued. The city demurred, assigning

Page 74 U. S. 84

for cause that the declaration did not allege that the bonds were issued in pursuance of such a vote of the inhabitants of the city as the charter required.

The court overruled the demurrer and gave judgment against the city.

A yet still additional series of coupons falling due, West & Torrence brought the suit which was now here by error. The declaration contained a special count (much as in the preceding cases), and the common counts. Separate demurrers were filed to the respective counts, but were overruled and withdrawn. The general issue, called in the record the first plea, was also pleaded and subsequently withdrawn, the second count being then left without answer.

Seven special pleas, numbered from two to eight, inclusive, were pleaded to the special count.

The 2d alleged that the bonds were issued without any good or valuable consideration.

The 3d that they were void because the company was not chartered to construct a railroad to the city.

The 4th because a majority of the qualified voters of the city had not signified their assent &c.

The 5th because the railroad company was not chartered to make a road to the city.

The 6th because the subscription was made and the bonds issued before the road was located to the city, and before the railroad company had resolved to make such location.

The 7th because the stock, before its issue to the defendants, became wholly worthless through the mismanagement of the directors.

The 8th because the proper officers of the city never sold and delivered the bonds as required by law, and the company obtained them without such sale and without authority.

Notice to the plaintiffs was alleged of all these facts.

Of replications not withdrawn, the first, which was to the second plea, set up the judgment, May Term 1856, of the Court for Dearborn County.

The 2d was to all the pleas except the 1st, and set up the judgment in the circuit court of the United States.

Page 74 U. S. 85

The 5th was to the 3d, 4th, 5th, 6th, 7th, and 8th pleas, and also set up the judgment in the Court of Dearborn County, as described in the first replication.

The 6th was to the 4th plea, and set up the same judgment.

The 8th was also to the 4th plea, and set up that the defendants were estopped by the recital in the bonds from denying that a majority of the qualified voters of the city had assented to the subscription.

The 10th was to the 3d, 5th, and 6th pleas, and set up certain proceedings of the city council, therein recited, as an answer to the said several pleas.

The city demurred specially to each of the replications, but the court overruled the demurrer, and the defendants filed a rejoinder to the 2d replication, the rejoinder being the judgment recovered in the Court of Dearborn County, at May Term 1861, and that the supreme court of the state, on appeal, had reversed it for error, and remanded the cause.

The rejoinder, by agreement, was to be regarded as pleaded to all the replications adjudged good except the 10th.

The rejoinder being held bad on demurrer, the parties waived a jury and submitted the cause to the court for the assessment of damages, and the court, having heard the evidence, gave judgment for the plaintiffs. Upon which the defendants took a bill of exceptions.

Page 74 U. S. 87

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