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
Page 82 U. S. 374
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.
Page 82 U. S. 375
MR. JUSTICE HUNT delivered the opinion of the Court.
The inquiry at once suggests itself upon reading the bill in
this case, why does the plaintiff file it? Can any relief be had in
this suit which could not be obtained in the suit sought to be
enjoined? It is an elementary principle of equity law that when
full and adequate relief can be obtained in a suit at law, a suit
in equity cannot be maintained. In
Hipp v. Babin,
[
Footnote 1] the court
said:
"The bill in this case is in substance and legal effect an
ejectment bill. The title appears by the bill to be merely legal,
the evidence to support it appears from documents accessible to
either party, and no particular circumstances are stated showing
the necessity of the court's interfering, either for preventing
suits or other vexation or for preventing an injustice irremediable
at law. In
Welby v. Duke of Rutland [
Footnote 2] it is stated that the general practice
of courts of equity in not entertaining suits for establishing
legal titles is founded upon clear reasons, and the departing from
that practice where there is no necessity for so doing would be
subversive of the legal and constitutional distinctions between the
different jurisdictions of law and equity. . . . Agreeably hereto,
the established and universal practice of courts of equity is to
dismiss the plaintiff's bill if it appears to be grounded on a
title merely legal, and not cognizable by them, notwithstanding the
defendant has answered the bill and insisted on matter of
title."
After citing numerous other authorities, the matter is thus
summed up:
"And the result of the argument is that whenever a court of law
is competent to take cognizance of a right and has power to proceed
to a judgment which affords a plain, adequate, and complete remedy
without the aid of a court of equity, the plaintiff must proceed at
law, because the defendant has a constitutional right to a trial by
jury."
The right to a trial by jury is a great constitutional right,
and it is only in exceptional cases and for specified causes that a
party may be deprived of it. It is in vindication of this great
principle, and as declaratory of the
Page 82 U. S. 376
common law, that the Judiciary Act of 1789, in its sixteenth
section, declares
"That suits in equity shall not be sustained in either of the
courts of the United States in any case where adequate and complete
remedy may be had at law. [
Footnote
3]"
A demurrer having been interposed to the present bill, all of
its allegations are to be taken as true. This is so both in favor
of the plaintiff and against him. It seems quite clear upon the
statements of the bill that the defense to the suit at law upon the
bonds is adequate and complete. Thus, the bonds, it is alleged,
were issued without authority and in fraudulent violation of the
duty of those having the subject in charge. It is not suggested
that there is any difficulty, either legal or practical, in
establishing these facts by competent proof. If proven, they
furnish as complete a defense to the suit at law to recover the
amount of the bonds as they do in equity. In each suit, the
question arises were they received by Winegar before their
maturity, without knowledge of the defense, and for a valuable
consideration by him paid on the purchase thereof? To cut off the
defense interposed by the town, all of these facts must exist. The
absence of any of them destroys the endeavor to exclude the
defense. In other words, if Winegar received the bonds after their
maturity, or if he had knowledge of the facts constituting the
defense to them, or if he did not pay value on their purchase, the
defense is admissible and its effect distinctly presented. Now upon
the allegations of the bill, each and all of these facts, except
that of the maturity of the bonds, is averred to have existed. The
time when Winegar received the bonds is not definitely stated. It
is alleged, however, that he knew the alleged facts in regard to
their issue before he received them. This alone opens the case to
any defense. It is alleged again that he paid no consideration
whatever on the purchase, but that his title is sham and colorable.
This again opens the whole case. Upon the statements of the bill,
the defense to the bonds can be interposed against Winegar as it
could be against an original
Page 82 U. S. 377
holder, and if the allegations are true and constitute a
defense, the defense at law to the suit brought by him is perfect
and complete.
A judgment against Winegar in the suit brought by him would be
as conclusive upon the invalidity of the bonds, would as
effectually prevent all future vexatious litigation, would expose
the fraud, and prevent future deception as perfectly and thoroughly
as would a judgment in the equity suit. Under such circumstances,
there is no authority for bringing this suit in equity.
We are so well satisfied that the bill cannot be sustained for
the reason stated that we do not discuss the further question
whether a bill of this character can be sustained where two of the
defendants in the suit are residents of the same state with the
plaintiff.
Decree affirmed.
[
Footnote 1]
60 U. S. 19 How.
271.
[
Footnote 2]
2 Brown's Parliamentary Cases 42.
[
Footnote 3]
1 Stat. at Large p. 82.
