Thomas v. the County of Morgan A1

• Decision Date: 31 January 1871
• Citation: 59 Ill. 479,1871 WL 8067
• Parties: WILLIAM THOMASv.THE COUNTY OF MORGAN et al.a1
• Court: Illinois Supreme Court

59 Ill. 479

1871 WL 8067 (Ill.)

WILLIAM THOMAS

v.THE COUNTY OF MORGAN et al.a1

Supreme Court of Illinois.

January Term, 1871.

OPINION TEXT STARTS HERE

APPEAL from the Circuit Court of Morgan county.

Mr. WILLIAM THOMAS, pro se.

Mr. ISAAC L. MORRISON, for the county of Morgan.

Mr. JUSTICE BREESE delivered the opinion of the Court:

The prominent facts of this case, as we gather them from the statement and brief of appellant, and not controverted by appellee, are substantially as follows:

A charter had been granted by the general assembly of this State, under which the Illinois River Railroad Company was organized, and commenced the construction of their road. The county of Morgan subscribed $50,000 in county bonds to the stock of this company, payable in instalments, as required by the board of directors of the railroad company. These bonds were printed, signed, and ready to be delivered. They bore date September 10, 1857, and were deposited for safekeeping with Brown & Elliott, bankers, of Jacksonville.

The company contracted with the firm of Allen & McGrady to grub, grade and tie the road, and, for the work to be done in Morgan county, the company agreed to pay, and the contractors to receive, these bonds. The facts in relation to this contract were reported by the president of the company to the county court of Morgan county. Thereupon, the court ordered the delivery of the bonds, as the president understood, unconditionally, but, as the court contended, to be delivered in payment of work done in Morgan county. Acting upon his understanding of the arrangement, the president of the company, on the 2d of April, 1859, gave orders on the bankers, Brown & Elliott, in favor of Allen & McGrady, the contractors, for two bonds of $2000 each, on account of work executed by them, or on account of a tie contract.

These orders were sold and endorsed by Allen & McGrady to William Thomas, the complainant and appellant, who, on presenting them to the bankers, was informed by them that the county judge had notified them not to deliver any bonds except in payment for work on the road in Morgan county. This was the first information appellant had that the county claimed there was any condition imposed upon the company in regard to the delivery or use of the bonds.

To obtain funds to purchase iron for the road, the company issued coupon bonds, and, to secure their payment, executed a deed of trust to parties in the city of New York, bearing date November 1, 1858, upon the road and its appurtenances. The road was completed from Pekin to Virginia, in the county of Cass, and the line surveyed from the last named point to Jacksonville, in Morgan county, but not finally located, in 1860.

In October and November, 1862, certain parties who had executed contracts for ties for the road, obtained judgments against the company in Mason and Peoria counties, upon which executions were issued and returned nulla bona.

While these actions were pending, but before judgments were obtained, the company failing to pay the interest on its bonds secured by this deed of trust, the trustees, in July, 1862, with the consent of the company, took possession of the road, placed their agent in charge, and commenced running and operating it for the use of these bondholders. Everything was surrendered by the company to the trustees except the bonds now in controversy.

The judgment creditors in Peoria and Mason counties commenced proceedings in garnishment against Brown & Elliott, who held the bonds, claiming the right to subject them to the payment of their judgments. The trustees under the deed of trust claiming that the bonds had passed to them under the deed, and this appellant claiming he was entitled to $4000 of them, in kind, and the president of the company, R. S. Thomas, claiming the right to a sufficient number of them to pay an indebtedness to him which the company had formally acknowledged, and the county denying the rights of all these parties as claimed by them, Brown & Elliott, to relieve themselves of all responsibility, filed their bill of interpleader in the Morgan circuit court against all these parties, that their respective claims might be adjudicated, and to obtain a decree directing the manner in which these bonds should be appropriated. All the parties appeared and interpleaded, and it was the judgment of the circuit court that the railroad company had no right to these bonds, except to pay for work done on the road in Morgan county, and the fact being admitted that no work had been done in that county, except surveying one or more lines, dismissed all the bills of interpleader; from which decree the judgment creditors and R. S. Thomas, and the complainant, appealed to this court.

While this bill for interpleader was pending in the circuit court, these bonds were, by order of the circuit court, deposited with the banking house of M. P. Ayres & Co., there to remain subject to the further order of the court.

The directors of the company held no meeting after the road was surrendered to the trustees, nor did they perform any act, or claim to do any, as a corporation, thereafter.

On the 11th of June, 1863, the general assembly of this State passed an act to incorporate the Peoria, Pekin & Jacksonville railroad, providing, among other things, that the corporation thereby created should have, possess, and be vested with, and might use, enjoy and exercise any or all of the corporate powers, privileges, rights, munities and franchises theretofore given or granted to the Illinois River Railroad Company under or by virtue of any act or acts of the general assembly of this State.

This corporation, having possession of the road by the purchasers under the deed of trust, proceeded to and did complete the road from Virginia to Jacksonville.

This court, on the appeal of Thomas and others, 39 Ill. 496, held, on the facts then before it, that Thomas, the appellant in this suit, was not entitled to the bonds, they being issued on the condition that they should be paid out only for work on the road done in Morgan county, and that he took the orders with notice of this condition. As to the judgment creditors, it was held they could pursue the bonds, and remanded the cause, upon which, the circuit court decreed in favor of these creditors. Their claims amounted, in the aggregate, to $7008.10, and by the decree, on the basis that the market value of the bonds was fifty cents on the hundred, appropriated $17,520.20 of the bonds to satisfy the decree--the balance of the bonds to remain with M. P. Ayres & Co.

It is alleged in the bill that, at the time of this decree, these bonds were at par. The amount of bonds remaining with Ayres & Co. was sixty-five, each for $500.

It is alleged in the bill that, in order to secure the passage of this act of June 11, 1863, and while suits were pending in the circuit court to subject these bonds to the claims of creditors then suing, two of the three trustees of the Illinois River Railroad Company, namely, Lucius Hopkins and Alexander Steedwell, entered into and signed this stipulation: “The undersigned, trustees in the first mortgage of the Illinois River Railroad Company, being desirous to obtain a charter for incorporating the purchasers of said railroad, do hereby stipulate that nothing in the act of incorporation which may be passed by the legislature, shall in any way affect the title or right of the trustees or bondholders, or any creditors of said road, or any person having claims or rights to the whole or any part of $50,000 of Morgan county bonds, and now in litigation in the circuit court of Morgan county, but the right and title to said bonds shall be left to be decided in the suit now pending in the Morgan county circuit court.”

This stipulation is dated June 5, 1863. The suit then pending, as we understand, was the case decided in 39 Ill. supra.

It is alleged in the bill that the board of directors of this company never met as a board for the transaction of business after the meeting in July, 1862, and by their action at that time all the property, franchises and rights of the company were transferred and assigned to trustees, and nothing remained either of power or authority on which the board could act; that by the subsequent act of June 11, 1863, incorporating the Peoria, Pekin & Jacksonville Railroad Company, all of the rights, powers and franchises of the Illinois River Railroad Company were vested in the company incorporated by that act; that by the action of the board in July, 1862, taken in connection with the action of the general assembly, the Illinois River Railroad Company was dissolved, and ceased to have any legal existence. The bill alleges that, after the decision of this court, in 39 Ill. 496, in 1866, the general creditors of the Illinois River Railroad Company commenced actions at law on their several claims, to which actions B. S. Prettyman, assuming to be the vice president of that company, entered his appearance, waived service of process, and either...