Grand Chute v. Winegar - 82 U.S. 373 (1872)
U.S. Supreme Court
Grand Chute v. Winegar, 82 U.S. 15 Wall. 373 373 (1872)
Grand Chute v. Winegar
82 U.S. (15 Wall.) 373
A municipal corporation, obligors in a bond, cannot ask relief in equity that the obligee be enjoined from proceeding at law and that the bond be surrendered when his bill alleges that the bond was issued without authority, in violation of law and in fraud of the town; that the obligee
knew this when be took it; that the obligee's possession is merely colorable, and that he gave no value for it and never had any right or title to the bond. Such allegations show a complete defense to the bond at law, and a judgment against the obligee at law would give as full protection every way to the obligor as a decree in equity.
The Town of Grand Chute, in Wisconsin, filed its bill or the equity side of the court below against one Winegar three other persons, Goodwin, Hewett, and Conkey, being also made defendants. It set forth that Winegar had brought suit on the law side of the same court against the town to recover from it the amount of certain bonds -- nine in number, and for the sum of $8,500 in all -- purporting to have been issued by the said town; that the bonds were issued without authority, in violation of law, and in fraud of the town, by the other defendants, Goodwin, Hewett, and Conkey; that for reasons set forth in the bill, the bonds had no legal force or validity; that the transfer of them to Winegar was colorable merely; that he paid no valuable consideration on the pretended purchase; that though he had given his notes for them, he was a bankrupt and altogether "irresponsible in a financial point of view;" that he knew all the facts in relation to the issue, and that he never had any right or title to the said pretended bonds or to any of them. It was further alleged that Winegar was a citizen of the State of New York, and that the other defendants were citizens of Wisconsin. The bill prayed that an injunction might be issued restraining Winegar and his confederates from the further prosecution of suit on the bonds, and that the bonds themselves might be adjudged to be fraudulent and void, and be decreed to be cancelled. To this bill the defendants demurred. The demurrer was sustained in the court below, and the complainant now appealed to this Court.