The complainant's bill alleged that he was a judgment creditor
of a railroad company; that the Board of Commissioners of Bourbon
County had subscribed to the stock of the railroad company and had
voted upon it at meetings of the corporation, and had thereby
become bound to the company to issue to it bonds of the county
equal to the par value of the stock; that the bonds had not been
issued, and that the obligation was still outstanding. The remedies
sought for were (1) that the company should be ordered to assign to
the complainant its claim against the county, and (2) a decree
against the county ordering it to issue the bonds, and to deliver
them to the complainant, to be credited upon his judgment at their
face value.
Held:
(1) That the right to proceed against the county and its
officers to compel the issue of the bonds was a purely legal right,
to be prosecuted at law in mandamus, whether the proceeding was in
the name of the railroad company or of its privy by assignment;
(2) That the equitable nature of the complainant's rights
against the company furnished no ground for the support of such a
bill in equity against the county; and
(3) That the bill should be dismissed as to the county without
prejudice to the complainant's right to proceed at law to obtain
the issue of the bonds. after acquiring the rights of the
railroad.
Page 127 U. S. 106
This was a bill in equity filed January 28, 1880, in the nature
of a creditor's bill. The appellant was the complainant below, and
in December, 1879, recovered a judgment at law in the Circuit Court
of the United States for the District of Kansas for $267,113.19,
besides costs, against the Fort Scott, Humboldt, and Western
Railroad Company, on which judgment an execution has been issued
and returned unsatisfied, the defendant corporation being
insolvent. The object of the bill was to subject to the
satisfaction of this judgment an alleged indebtedness of Bourbon
County, Kansas, to the judgment debtor, the Fort Scott, Humboldt,
and Western Railroad Company. That indebtedness consisted in a
supposed legal obligation on the part of the Board of Commissioners
of Bourbon County to issue and deliver to the Fort Scott, Humboldt
and Western Railroad Company municipal bonds of the county in
payment of a subscription of stock in the sum of $150,000. The
obligation to issue and deliver these bonds was alleged to arise
upon the following facts:
On July 23, 1869, the Board of Commissioners of Bourbon County
made an order, submitting a proposition to the voters of the county
for the subscription of stock and the issuing of bonds of said
county in the sum of $150,000, to secure the construction of a
railroad from Fort Scott westwardly, north of the Marmaton River,
in the general direction of Humboldt, in Allen County.
This order directed
"That there be subscribed in the name and for the benefit of the
County of Bourbon, in the State of Kansas, one hundred and fifty
thousand dollars to the capital stock of any railroad company now
organized, or that shall be organized hereafter, that shall
construct a railroad commencing at the City of Fort Scott, in the
county and state aforesaid, running from thence west, north of the
Marmaton River, upon the most practical route in the general
direction of Humboldt, Allen County, Kansas, and that the bonds of
said county be issued to said company for the payment of said
subscription, said bonds to be payable within thirty years from the
date thereof, and bearing interest payable semiannually at the rate
of seven percentum per annum,
provided
Page 127 U. S. 107
that said bonds shall not be issued until the question shall
have been submitted to a vote of the qualified electors of the
County of Bourbon aforesaid and shall have received a majority of
the votes case upon said proposition in favor thereof in pursuance
of the provisions of the statutes in such cases made and provided,
and that said question shall be submitted to said electors at a
special election on Tuesday the 24th day of August, A.D. 1869. At
said election, the votes shall be case 'for railroad bonds' and
'against railroad bonds', and if it shall appear upon a canvass of
the votes cast at said election by proper officers according to law
that a majority of the votes case upon said election are in favor
of said subscription, then the said order shall be carried into
practical operation by the issuing of said bonds to the said
company whenever the County Commissioners of Bourbon County are
satisfied that the bonds herein provided for, with the other
resources of the said company, shall be sufficient and adequate to
complete the construction of the roadbed ready for the iron from
the City of Fort Scott to the west line of Bourbon County,"
etc.
There was no record of the notice of the election preserved or
filed in the clerk's office, but as a fact, the proof showed that
the notice of the election was first given on July 28, 1869, by
publication in the Fort Scott Monitor, a weekly newspaper published
at Fort Scott in said county, and for three successive weeks
thereafter, the last publication being on August 18 and the
election on the 24th day of August. On August 27, the vote was duly
canvassed by the board of commissioners, and was ascertained to be
in favor of the subscription and issuing of bonds by a majority of
over 700. In October, 1870, more than a year after the bonds were
voted, the Fort Scott and Allen County Railroad Company was
organized under the general laws of the State of Kansas for the
purpose of building a railroad from Fort Scott westwardly, on the
north of the Marmaton River, in the general direction named in the
order under which the election was held. The corporators and
directors of this railroad were composed largely of citizens of
Bourbon County.
Page 127 U. S. 108
Soon after the organization of said railroad company, the
Commissioners of Bourbon County appointed Joseph S. Emmert agent
for the county to subscribe for and in the name of the county
$150,000 of stock in said company under the authority of the
election held August 24, 1869, with the proviso that the company
complete its roadbed ready for the iron from Fort Scott to the
western line of the county by the 1st day of July, 1872. This agent
subscribed to the capital stock of the company in the amount above
stated in the name of the county, as authorized by said order of
appointment, and the said 1,500 shares of stock were at various
meetings of the stockholders of the company represented and voted
either by the chairman of the county or by some other person
authorized thereto. On June 6, 1871, Franklin C. Smith, the
complainant, made a contract with the railroad company to grade the
roadbed from Fort Scott to Humboldt, about 23 miles, and to
construct all necessary bridges, culverts, etc., for which he was
to be paid in part by $125,000 of the bonds of Bourbon County to be
issued in payment of its subscription. Before making the contract,
he had assurances from two of the county commissioners that the
bonds had been legally and regularly voted and that they would be
issued on the completion of his contract. On July 28, 1871, on
application of the railroad company, the Board of County
Commissioners ordered the bonds to be prepared and signed by the
chairman and deposited in the safe of the treasurer's office to
await further order, which was accordingly done. The roadbed was
completed ready for the iron, in substantial compliance with the
terms of the subscription, by the time named, to-wit, July 1, 1872.
In June, 1872, after the work was done, the railroad company
demanded the bonds of the county board, which demand was not
granted. In August following, another demand was made by the
railroad company, which was refused. The commissioners then ordered
the bonds to be destroyed, which was in fact done. The county
commissioners made no objection to the delivery of the bonds on the
ground that the resources of the company, together with those
bonds, were not sufficient to construct the roadbed. The name of
the railroad company,
Page 127 U. S. 109
after its organization, was changed to the Fort Scott, Humboldt,
and Western Railroad Company. The company never filed any profile
or map of its route in the clerk's office of the county, nor did it
secure or pay for the right of way along its line, with the
exception of about eight miles.
The circuit court dismissed the bill, holding that the county
commissioners were under no legal obligation to issue the bonds to
the railroad company, and were not indebted to the railroad company
by reason of its failure to issue them, because, 1st, the order of
submission, under which the election was had, was illegal and void
for the reason that no railroad company was named in the order, nor
was the company at that time in existence; 2d, the notice of the
election was insufficient and illegal because it was not given
thirty days before the election; 3d, the county was not estopped to
deny its obligation by the proceedings of the board of
commissioners or the representations and assurances of the
individual members. The correctness of this conclusion is
questioned by the present appeal.
MR. JUSTICE MATTHEWS, after stating the facts as above,
delivered the opinion of the Court.
The prayer of the bill is for a decree, in the first place,
against the Fort Scott, Humboldt and Western Railroad Company,
which is a defendant, ordering it to assign to the complainant its
claim against the County of Bourbon, and, in the second place, for
a decree against Bourbon County and its board of county
commissioners, ordering the latter to sign and issue in due form
the bonds of said county in the sum of $150,000, payable in thirty
years from the date thereof, with semiannual interest coupons
attached, in accordance with the terms of the subscription to the
capital stock of the railroad company, and deliver the same to the
complainant to be credited
Page 127 U. S. 110
at their face value upon his judgment against the railroad
company, and for general relief.
The relief prayed for does not include a decree against the
County of Bourbon for the payment of money, and there is no
foundation for such a prayer in the allegations of the bill. It
does not charge that the county is indebted in any sum of money
presently payable by virtue of its subscription to the capital
stock of the railroad company. The legal obligation arising on that
subscription is purely statutory, if the subscription itself be
valid and binding, and the statutory obligation is satisfied by the
issue and delivery to the railroad company of the bonds of the
county in payment of the subscription. On the supposition that the
subscription creates a legal obligation for its payment in bonds,
the refusal of the commissioners of the county to issue and deliver
the bonds, however wrongful, is not a breach of the obligation of
the county which would give rise to an action against it for the
recovery of damages. The breach of obligation in such a case would
consist simply in the refusal on the part of the commissioners of
the county to perform a ministerial duty, the only remedy for which
would be a proceeding at law in the name of the railroad company by
a writ of mandamus. That writ, if granted in a direct proceeding
therefor by a proper judgment, would be directed against the
officers of the county, and would command the performance of the
specific duty which the had refused to perform, and would give to
the company the precise and specific relief to which to would be
entitled.
The complainant in the present case has and can have no other or
greater rights against the County of Bourbon or its officers than
are vested in the railroad company. The object of the bill is to
subject to the satisfaction of the complainant's judgment against
the railroad company the rights of the latter against the County of
Bourbon and its officers. The proceeding for that purpose cannot
change these rights nor convert a right to require the delivery of
the bonds into a claim for damages for their nondelivery. It is
clear that such relief as is alone suitable and adequate to the
case cannot be granted in equity. If the proceeding
Page 127 U. S. 111
were in the name and on behalf of the railroad company itself,
it would, as we have already stated, be at law in mandamus. That
the complainant claims to be equitably entitled to be substituted
for the railroad company in its rights against Bourbon County may
entitle him to a decree against the railroad company for an
assignment of its claim, so as to confer upon the complainant the
right to use the name of the railroad company in a proceeding
against the county and its commissioners; but it does not enlarge
the rights of the railroad company against the county and its
officers, nor change the remedy so as to enable a court of equity
to entertain proceedings in mandamus. The bill might justify a
decree against the railroad company for an assignment of its right
to the bonds, and requiring the railroad company to permit the use
of its name for their recovery by the appropriate proceeding at
law. The right to proceed against the county and its commissioners
remains still a purely legal right, and can only be prosecuted at
law, notwithstanding the equitable nature of the complainant's
rights as against the railroad company.
As was said in
Hayward v. Andrews, 106 U.
S. 672,
106 U. S.
675:
"If the assignee of the chose in action is unable to assert in a
court of law the legal right of the assignor, which in equity is
vested in him, then the jurisdiction of a court of chancery may be
invoked, because it is the proper forum for the enforcement of
equitable interests and because there is no adequate remedy at law;
but when, on the other hand, the equitable title is not involved in
the litigation, and the remedy is sought merely for the purpose of
enforcing the legal right of his assignor, there is no ground for
an appeal to equity, because by an action at law in the name of the
assignor the disputed right may be perfectly vindicated, and the
wrong done by the denial of it fully redressed. To hold otherwise
would be to enlarge the jurisdiction of courts of equity to an
extent the limits of which could not be recognized, and that in
cases where the only matter in controversy would be purely legal
rights. . . . To give a court of equity jurisdiction,"
as was said by Mr. Justice Woods, delivering the opinion of the
Court in
Fussell v. Gregg, 114
U. S. 550,
114 U. S. 554,
"the nature of the relief asked
Page 127 U. S. 112
must be equitable, even when the suit is based on an equitable
title." This rule was applied in
New York Guaranty Co. v.
Memphis Water Co., 107 U. S. 205,
where it was said that it was entitled to special consideration
from the courts of the United States.
It follows from this view that the distinction in the
jurisdiction of the courts of the United States between proceedings
at law and in equity would limit the relief of the complainant,
under the present bill, to a decree against the railroad company
investing the complainant with its rights and the use of its name
in a proceeding to enforce by mandamus the issue and delivery of
the bonds alleged to be wrongfully withheld.
The necessity for thus limiting the relief becomes more
stringent as well as obvious from another consideration. In the
case of
Rosenbaum v. Bauer, 120 U.
S. 450, it was decided by this Court upon much
deliberation that section 716 of the Revised Statutes, giving power
to a circuit court to issue all writs not specifically provided for
by statute which may be necessary for the exercise of its
jurisdiction and agreeable to the usages and principles of law,
construed in connection with ยงยง 1 and 2 of the act of 1875,
operates to prevent the issuing by the circuit court of a writ of
mandamus except in aid of a jurisdiction previously acquired by
that court. It is perfectly clear under the decisions of this Court
that no application could be entertained in the circuit court for a
writ of mandamus directed against the County Commissioners of
Bourbon County at the suit and in the name of the railroad company
itself. The court would be without jurisdiction, and certainly that
lack of jurisdiction cannot be supplied by converting the
proceeding into a bill in equity, whether the proceeding be in the
name of the railroad company for its own use or in the name of the
railroad company for the use of the complainant, its assignee, or
in the name of the assignee himself. The objection is one of
substance, and not merely of form. It cannot be waived, and it
cannot be ignored.
It follows from this view that, so far as the bill sought
the relief prayed for against Bourbon County and its commissioners,
the circuit court was without jurisdiction.
Page 127 U. S. 113
In point of fact, however, it assumed, jurisdiction and
decided the case on its merits. This, in our opinion, it had no
authority to do. For that reason and to that extent, the decree of
the circuit court dismissing the bill generally must be modified so
as to dismiss the bill as against the County of Bourbon and the
county commissioners of that county, without prejudice to the right
of the complainant, on obtaining a proper assignment and authority
from the railroad company to proceed at law in its name, to obtain
the issue and delivery of the bonds described in the bill of
complaint, and retaining the bill, if the complainant elects and
shows himself entitled, as to the Fort Scott, Humboldt and Western
Railroad Company, for relief against it alone, for an assignment of
its right to the issue and delivery of the bonds of the county, and
to the use of its name in a proceeding against the county and its
commissioners for the enforcement of such right. It is accordingly
so ordered.