Grand Chute v. Winegar At Law

• Decision Date: 01 December 1872
• Citation: 82 U.S. 355,21 L.Ed. 170,15 Wall. 355
• Parties: GRAND CHUTE v. WINEGAR. AT LAW
• Court: U.S. Supreme Court

82 U.S. 355

21 L.Ed. 170

15 Wall. 355

GRAND CHUTE v. WINEGAR.

AT LAW.

December Term, 1872

ERROR to the Circuit Court for the Eastern District of Wisconsin; the case being thus:

By the first section of an act of the 10th of February, 1854, the legislature of Wisconsin authorized the boards of supervisors of Grand Chute, Greenville, Hortonia, and certain other towns along the course of a contemplated plankroad in Wisconsin, named the Wolf River Branch Plankroad, to subscribe in behalf of said towns or any of them, 'under the restrictions and conditions hereinafter named,' to the capital stock of the said plankroad company, such amounts, not exceeding $10,000, for any one town, as may be declared by the board of directors of said company necessary for the completion of said road at the time of such subscription, and to pay for the same in bonds of the town or towns so subscribing, payable in fifteen years from the date thereof with interest, at a rate not exceeding ten per cent. per annum, payable annually, at such place within or without the boundaries of this State as shall be therein named.

Subsequent sections of the act road thus:

'SECTION 6. No bonds shall be issued by any town in pursuance of this act, unless a majority of the votes cast in said town, at the election hereinafter mentioned, shall be in favor of the same.

'SECTION 7. A special election shall be called and held in each of the towns before named, for the purpose of carrying this act into effect within six months after the passage of this act. At

such election, those voting in favor of the subscription of stock, and the issuing of bonds in accordance with the provisions of this act, shall put in ballots having inscribed on them the words 'FOR THE ROAD,' and those voting against such subscription and issue of such bonds, shall put in ballots inscribed with the words 'AGAINST THE ROAD,' Notice of such election shall be given for two weeks successively next preceding said election, in some newspaper printed in the county where the town so voting is situated. And such elections and the canvass thereof, shall be held at the same place, and conducted by the same persons, and in the same manner in all respects as the annual town meetings of each town.'

On the 12th of March, 1855, certain bonds were issued in form thus:

[No. 5.]

TOWN OF GRAND CHUTE BOND.

Whereas, the legislature of the State of Wisconsin, on the tenth day of February, A.D. 1854, passed an act authorizing and empowering the board of supervisors of the town of Grand Chute to subscribe, for the town of Grand Chute, ten thousand dollars to the capital stock of the Wolf River Branch Plankroad Company, and to pay for the same in the bonds of the town, payable in fifteen years; and whereas the said board of supervisors, at a meeting of their board, did agree, by resolutions of said board, to subscribe the sum of $10,000 to the stock of the Wolf River Branch Plankroad Company, and that the said town issue bonds to the amount of said subscription to the said plankroad company, and that the said bonds be signed by the chairman of said board, under the seal of said town:

Now, therefore, for the purpose of carrying out the provisions of the said act of the legislature, and in accordance with the resolutions of the said board as aforesaid:

Know all men by these presents that the town of Grand Chute, in the county of Outagamie, and State of Wisconsin, is held and firmly bound unto the Wolf River Branch Plankroad Company, or bearer, in the sum of ONE THOUSAND DOLLARS, lawful money of the United States of America, to be paid to said plankroad company, or bearer, or their successors or assigns, for which full payment well and truly to be made, the said town binds itself firmly by these presents, and hereby pledges, irrevocably, the said stock and the proceeds thereof. Dated the 12th day of March, A.D. 1855. Sealed with the seal of said town.

The condition of the above obligation is such, that if the said town of Grand Chute shall pay, or cause to be paid, to the said Wolf River Branch Plankroad Company, or their successors or assigns, or to the bearer hereof, the just and full sum of one thousand dollars in fifteen years from the 12th day of March, A.D. 1855, with interest annually at the rate of 10 per cent. per annum until paid, said principal and interest to be paid at Appleton, in the State of Wisconsin, then the above obligation to be void; otherwise to remain in full force and virtue.

[SEAL.] THEODORE CONKEY, Chairman of Board of Supervisors town of Grand Chute.

To the bond were annexed fifteen coupons, in form thus:

[No. 1.]

The town of Grand Chute will pay to the holder hereof, eighty-eight and 35/100 dollars on the first day of February, 1856, at Appleton, Wisconsin, on the presentation hereof, being the interest due that day on the bond of said town, No. 5.

THEODORE CONKEY, Chairman.

Nine of these bonds with the coupons being in the control or ownership of one Winegar, he brought suit against the town of Grand Chute in April, 1870, in the court below, describing himself as 'a citizen of the State of New York.' The town of Grand Chute pleaded in abatement, to the effect that the Circuit Court of the United States had no jurisdiction over the action for the reason that at the time of the commencement of the action, a portion of the bonds ($5500) sought to be recovered, were held and owned by one Henry Hewett, and the residue by one Theodore Conkey; that Conkey and Hewett were the real plaintiffs in interest in the action, that they were citizens of the State of Wisconsin, and, therefore, that the court could not take cognizance of the action. The plea in abatement further alleged that the bonds were not issued in good faith or for any valuable consideration, but were procured and issued by the fraudulent contrivance of Hewett, Conkey, and one Reeder Smith, who was the president of the plankroad company for whose benefit the bonds were authorized to be issued, and the substance of the fraud was briefly stated. Issue was joined on this plea, and the deposition of the plaintiff, Winegar, was himself taken by the defendant to prove the affirmative of it. Winegar swore that he purchased the bonds of Goodwin, as the agent of Hewett, at the First National Bank of Union Springs, Cayuga County, N. Y., for $5100, payable $2500 in one year, and $2600 payable in two years, with 7 per cent. interest. That he had negotiated for the bonds a year and a half or two years before he purchased; that he purchased the bonds in January, 1870; purchased them for speculation; that he 'had no reason to believe that they were any other than good and valid bonds;' that he 'so believed at the time he made the purchase; that the purchase was made by him in good faith and without any knowledge or information that they were other than good and valid bonds; that he in equal good faith gave his notes, and that they would be met;' that he lived at Union Springs, Cayuga County, N. Y.; that he was the teller of a bank there, and had lived there for nearly four years before he brought the suit. He testified also that he never had the bonds in his possession, that he had a bill of sale of them, and they were subject to his order, and that the bill of sale was signed by Goodwin as the agent of Hewett, the seller. The court directed the jury on this evidence—the only evidence taken on the issue raised by the plea in abatement—to find the issue for the plaintiff. An exception was taken to the direction.

After this decision of the plea in abatement, the plaintiff asked for final judgment in his favor on the verdict, which the court declined to grant. Thereupon the town of Grand Chute put in nine special pleas, of which certain ones only need be mentioned.

1st. Nil debet.

2d. Non est factum 3d. That the act authorizing the town of Grand Chute to subscribe for plankroad stock and issue bonds in payment, 'was not published pursuant to the constitution and laws of said State of Wisconsin, at or prior to the time of the calling, holding and canvass of the special election prescribed by said act, to wit: on the 20th day of May, 1854.'

4th. That the town of Grand Chute was not authorized to subscribe to the stock of the plankroad in question.

5th. That the board of directors of the plankroad company had not declared, as the 1st section of the act required them to do, what 'amount was necessary for the completion of the road.'

7th. That no special election, such as the act prescribed, had been called or held, previous to the issue of the bonds.

8th. That Hewett owned $5500 of the bonds in suit, that Conkey owned the residue, and that they, and not Winegar, were the real parties in interest in the action. That the bonds were not issued in good faith or for any valid consideration, but were procured by fraud, deception, and by collusion between Hewett, Conkey, and Reeder Smith, president and general agent of the plankroad company, in pursuance of a corrupt agreement, whereby Smith received a contract at an extravagant price and Conkey received the privilege of paying off the workmen from his store at a large profit; that a change in location was made to the injury of the road, but for the benefit of the conspirators; that Hewett signed a writing purporting to bind him, and that the bonds were fraudulently delivered to Hewett before he had performed any part of the work or even commenced it. The plea was a very long plea, covering nearly four pages of twice as much type as one of the ordinary pages of these Reports; it amplified all the above matter; inserted copies of the agreement with Hewett, and specified the mode and manner in which the fraud was alleged to have been effected.

[The reader will observe that this eighth plea resembled the plea in abatement already mentioned.]

9th. That the bonds were not executed and delivered to the plankroad company for the purpose of carrying out the provisions of any...