Emigrant Company v. County of Wright
97 U.S. 339 (1877)

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U.S. Supreme Court

Emigrant Company v. County of Wright, 97 U.S. 339 (1877)

Emigrant Company v. County of Wright

97 U.S. 339

Syllabus

The Legislature of Iowa having, by an Act passed Feb. 2, 1853, granted to the counties in which the same were respectively situated the swamp and overflowed lands to which the state was entitled under the Act of Congress of Sept. 28, 1850, 9 Stat. 519, the County of Wright presented its claim to the Department of the Interior. Having been informed by A., its agent, that the same had been rejected and that, under the ruling adopted, but little hope remained of its final allowance, the county, July A, 1802, through its board of supervisors, entered into a contract with the American Emigrant Company to convey to it "all the swamp and overflowed lands of said county, and all the proceeds thereof, and claim for the same on the United States and all other parties," the company agreeing, in payment therefor, to spend $500 in such public improvements in the county as the board should require, to take the lands subject to the provisions of the said act of Congress and the existing laws of Iowa, and to release the state and the county from any liability to reclaim the lands. The contract was submitted to the vote of the county, and eighty-nine out of the ninety votes which were cast were in favor of affirming it. Neither the supervisors nor the voters knew the nature or the value of what they were selling. The company was informed in regard to both, and it withheld the information from the county officers. Subsequently, A., who had become the agent of the company and was then acting in its interest, procured the reversal of the former ruling of the department, presented the renewed claim of the county and secured an allowance of several hundred acres of unsold lands in place, $981 in money, and scrip for about six thousand acres in lieu of swamp lands which had been sold by the United States. Jan. 7, 1887, the county, in fulfillment of the contract, conveyed to the company by deed a large quantity of lands. The county, in 1870, no improvements having been made, filed this bill praying for the annulment and cancellation of the contract, for a reconveyance of the lands, saving the rights of intermediate purchasers, and for an accounting so far as the company had sold said lands or received money on account of swamp lands due the county.

Held:

1. That the fact that all the parties knew that they were dealing with a trust fund devoted by the donor to a specific purpose demanded the utmost good faith on the part of the company.

2. That in view of the provision for the diversion of the fund, the gross inadequacy of the compensation, and the successful speculation at the expense of the rights of the public, the county is entitled to the relief prayed.

APPEAL from the Circuit Court of the United States for the District of Iowa.

The facts are stated in the opinion of the Court.

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