Shoecraft v. Trustees of the Internal Improvement Fund of the State of Florida

• Decision Date: 20 February 1888
• Citation: 124 U.S. 730,8 S.Ct. 686,31 L.Ed. 574
• Parties: SHOECRAFT v. TRUSTEES OF THE INTERNAL IMPROVEMENT FUND OF THE STATE OF FLORIDA et al
• Court: U.S. Supreme Court

124 U.S. 730

8 S.Ct. 686

31 L.Ed. 574

SHOECRAFT v. TRUSTEES OF THE INTERNAL IMPROVEMENT FUND OF THE

STATE OF FLORIDA et al.

February 20, 1888.

[ This is a suit in equity to enforce the performance of a contract, made between the trustees of the internal improvement fund of the state of Florida and the Jacksonville, Pensacola & Mobile Railroad Company, for the conveyance of certain lands in Florida, and to determine the rights of various parties claiming interests in them. As alleged in the bill, by the act of congress of September 28, 1850, to enable the state of Arkansas and other states to reclaim the swamp lands within their limits, (9 St. 519,) there was granted to the state of Florida the whole of the swamp and overflowed lands within it, made unfit thereby for cultivation, which were at the date of the act unsold; and this grant was accepted by the state. By an act of the legislature, approved January 6, 1855, all of these lands and the proceeds thereof were set apart as a separate fund, called the internal improvement fund of the state, to be applied as there provided. To insure the proper application of the fund to the purposes declared, the lands and the charge of the proceeds arising from their sale were vested in five trustees, namely, the governor, the comptroller of public accounts, the state treasurer, the attorney general, and the register of public lands of the state, and their successors in office, in office, in trust, with power to sell the lands, to receive payment thereof, and to make such disposition of the proceeds as the act directed, and, among other things, to pay the interest as it should become due on the bonds to be issued by different railroad companies under the authority of the act; and also to receive semi-annually one-half of 1 per cent of the bonds of each separate line of railroad, and invest the same in certain specified securities. The act provide that all bonds issued under its provisions by any railroad company should be a first mortgage on its road-bed, iron, equipment, workshops, depots, and franchises, and that upon its failure to provide the interest on the bonds issued by it, and the sum of 1 per cent. per annum as a sinking fund, the trustees should take possession of its of its road and property and sell the same, and apply the proceeds to the purchase and cancellation of the outstanding bonds on which default was thus made. The provisions of the act were accepted by various railroad companies, namely, the Florida, Atlantic & Gulf Central Railroad Company, the Tallahassee Railroad Company, and the Florida Railroad Company, each of which was, prior to 1860, a corporation created under the laws of the state, and had issued its bonds, and prior to the year 1867 had made default in the payment of the interest on thim and of the 1 per cent. required for the sinking fund. These bonds, or at least the interest thereon in default, and the 1 per cent., were a first lien upon all the swamp lands granted to the state. The amount of the bonds, interest, and percentage in default reached nearly three millions of dollars. In 1868 and 1869 the trustees seized each of these roads and sold them to various purchasers for sums which in the aggregate were less by one million and a half of dollars then the amount in default, leaving the internal improvement fund and the lands liable for the deficiency. Among the holders of railroad bonds issued was one Francis Vose, a citizen of New York, who held bonds of the Florida Railroad Company, and he brought a suit in equity in the United States circuit court for the Northern district of Florida against the trustees of the improvement fund, praying that the amount due him might be collected and enforced out of the lands conveyed to the trustees. On December 6, 1870, an injunction was issued in that suit, restraining the trustees from selling or disposing of the lands otherwise than in accordance with the provisions of the act of 1855. At this time the improvement fund and the lands were incumbered for a very large amount; and the trustees, being desirous to arrange for the payment of the debts, including the claim of Vose, and to aid in the construction of a certain railroad, on May 31, 1871, entered into an agreement with the Jacksonville, Pensacola & Mobile Railroad Company, by which they were...