Emigrant Company v. County of Adams

• Decision Date: 01 October 1879
• Parties: EMIGRANT COMPANY v. COUNTY OF ADAMS
• Court: U.S. Supreme Court

100 U.S. 61

100 U.S. 61

25 L.Ed. 563

EMIGRANT COMPANY v. COUNTY OF ADAMS.

October Term, 1879

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

The facts are stated in the opinion of the court.

The case was argued at the last term by Mr. J. A. Harvey and Mr. N. M. Hubbard for the appellant, and by Mr. Frank M. Davis and Mr. R. P. Lowe for the appellee.

The case was reargued at the present term for the appellee by the same counsel, and for the appellant by Mr. Benjamin F. Butler and Mr. O. D. Barrett.

MR. JUSTICE BRADLEY delivered the opinion of the court.

This case arises upon a bill in equity originally filed by the County of Adams, Iowa, against The American Emigrant Company, in the District Court of that county, and afterwards transferred to the Circuit Court of the United States. The object of the bill was to rescind a certain contract between the county and the company, made in September, 1862, whereby the county agreed to convey to the company its swamp lands, and its claim against the government for indemnity on account of swamp lands belonging to it and which had been sold by the public land officers; also to rescind a deed executed on behalf of the county in pursuance of the said contract; and to recover back the moneys and proceeds which the defendant had realized from the property and the said claim. The case is of the same general character as that of Emigrant Company v. County of Wright, 97 U. S. 339. The act of Congress, and the laws of the State of Iowa which bear upon the case, and the character of the general operations of the defendant, are fully set forth in the opinion in that case, and need not be repeated here. Suffice it to say that on the thirtieth day of September, 1862, a written contract, similar to the contract in that case, for the sale of the swamp lands of Adams County, and of all the fund and claim of the county on the general government therefor, was signed by the chairman and clerk of the board of supervisors of said county, and by the American Emigrant Company, by its agent F. C. D. McKay, and was recorded among the proceedings of the board. By this contract the company agreed to take the lands and fund and claim and to make for the county any public work or improvements therefor which the board of supervisors might request, and which were authorized by law, to the amount of $2,000, at any time after Oct. 1, 1863; or to pay the board, if they preferred to do the work themselves, the sum of $2,000 in money by the 1st of January, 1865. It was further agreed that the lands should not be taxed as long as the county held the legal title; and the company agreed to settle all the lands fit for settlement with white settlers and purchasers, by selling farms of the usual size, one-third in three years, another third in five years, and the whole in eight years. It was also declared that the company took the lands subject to the provisions of the act of Congress of Sept. 28, 1850, and expressly released the State of Iowa and the county from all liability in reclaiming said lands, or in the draining thereof; and that any contract existing between the county and any person in relation to said lands or funds was to be respected and fulfilled by the company.

Subsequently a deed was executed in pursuance of this contract by the supervisors of the county, bearing date the 7th of September, 1863, and purporting, for the consideration of $2,000, to convey to certain trustees, in trust for the American Emigrant Company, certain lands particularly described, stated to amount in the aggregate to 3,680 51/100 acres, although the several parcels foot up only 2,235 acres, and the parties concede that, after certain reservations mentioned in the contract, the actual quantity conveyed by the deed was only a trifle over 2,000 acres. The deed contained an agreement on the part of the county that the lands within the county which might at any time be duly selected as swamp or overflowed lands, and all such lands as might not be included in the conveyance, if any, should be conveyed on request, and that any proceeds of the claim on the United States, if any should be received, should, on like request, be assigned and transferred to said American Emigrant Company, its trustees or assigns; and that any lands that should be located under or by any scrip, which might be obtained on said claim, should also be conveyed, on request, to said company, its trustees or assigns.

It appears from the proofs that the American Emigrant Company has sold about 1,500 acres of the land, upon some of which the purchasers have made improvements; and has paid to the county the said sum of $2,000 mentioned in the contract (which was paid in June, 1865), and has also paid certain expenses incurred on behalf of sixteen different counties with whom the company had like contracts (of which Adams County was one), the one-sixteenth part of which, as stated by the defendant, amounts to $4,562; and a further sum of $1,200 paid to one Grinnell as agent of Page, Adams, and Montgomery Counties,—all together, on behalf of Adams County, about $7,000.

On the other hand, the company has received under the contract, from the United States, in cash, the sum of $6,075.11; and in addition to the lands specifically conveyed, patents have been issued to the county for 2,043 acres, to which the defendant is entitled if the contract is carried out; and there is still an unadjusted claim for about 3,000 acres more.

The Circuit Court decreed the contract and deed to be void, and ordered a restitution of all moneys and securities received by either party by virtue thereof, saving the rights of bona fide purchasers, and referred the matter to a master to take the necessary account. From this decree the American Emigrant Company appealed; and the question for us to decide is, whether it is or is not sustained by the pleadings and proofs in the cause.

The grounds laid by the bill of complaint for avoiding the contract are, in substance, as follows: First, that the sale of the county's swamp lands was made at a much less price than the law allowed them to be sold for; that by an act of the legislature of Iowa, then in force, regulating the disposal of such lands, it was made unlawful to sell the same at a less price than $1.25 per acre, whereas by the said contract nearly 8,000 acres were sold for $2,000; secondly, that the sale of the county's claim against the United States for indemnity was void, as being contrary to law; thirdly, that the contract and deed were procured by false and fraudulent representations, both as to the quantity of lands comprised therein and as to the validity and condition of the claim against the United States for indemnity, it being represented that the county was entitled to only about 2,000 acres of land, and that the claim for indemnity had been rejected, and was of no value; that these representations were made by agents of the defendant, who well knew the falsity thereof, to the officers and agents of the county, who were entirely ignorant in the premises, and liable to be easily imposed upon; fourthly, that false representations were made as to the object of buying the lands,—namely, that the defendant desired them only for immediate settlement and improvement, whereas it has never made any effect to drain or cultivate them, and never had any intention of doing so; fifthly, that the delivery of the deed was procured by fraud, the same having been executed as an escrow, and left with the clerk of the board of supervisors to be delivered only upon the execution and delivery of a mortgage upon all the lands to secure a compliance with the terms of the contract; whereas, by a fraudulent combination with said clerk the defendant procured the delivery and recording of said deed without giving any such mortgage. The bill also set up insufficient consideration for said lands and the indemnity claim, and failure of consideration; that the defendant had failed to drain or improve the lands, and to release the county from its obligations in that behalf; that it had refused to pay a certain claim for over $2,000 against said county for services of an agent, in consequence of which the county had been prosecuted and obliged to pay $2,700 for judgment and costs. It was also charged that the defendant had made use of fraudulent misrepresentations and bribery to procure a vote of the people of the county in favor of the sale (which was required by the laws of the State). The bill further stated that, on discovery of the frauds thus charged, the board of supervisors passed a resolution repudiating...