Wilson v. Mitchell

• Decision Date: 30 April 1901
• Citation: 43 Fla. 107,30 So. 703
• Parties: WILSON v. MITCHELL, Governor, et al.
• Court: Florida Supreme Court

30 So. 703

43 Fla. 107

WILSON v. MITCHELL, Governor, et al.

Florida Supreme Court

April 30, 1901

Appeal from circuit court, Leon county; John W. Malone, Judge.

Bill by Samuel B. O. Wilson against Henry judgment dismissing the bill, plaintiff appeals. Judgment dismissing the bill plaintiff appeals. Reversed in part, and affirmed in part.

Syllabus by the Court

SYLLABUS

1. Circuit courts have power in their discretion to permit to be filed and appended to pleas in equity the affidavit and certificate required by equity rule No. 48 at any time before a decree pro confesso for want of a plea is entered, where the omission to do so was caused by inadvertence or oversight on the part of the pleader, and the application is promptly or seasonably made.

2. The internal improvement fund designated in section 1 and vested in the trustees by section 2 of the internal improvement act (chapter 610, Laws, approved January 6, 1855), is in no manner made, or intended to be made, responsible to the holders of bonds issued by railroad companies under authority of that act, further than for interest accruing on the bonds up to their maturity; nor can such fund be held liable for the neglect of the trustess to collect semiannually the installments due to the special sinking funds provided by that act for the payment of the principal of such bonds, nor for the ailure of the trustees to account for moneys paid into such sinking funds, and misappropriated by them.

3. The trustees had power, under action 3 of the internal improvement act (chapter 610, Laws, approved January 6 1855), to apply money derived from the sale of railroad property made under the authority of that section to the purchase and canceling of outstanding bonds of the railroad company, or to incorporate it with the sinking fund provided by that act; and they were not required to hold the bonds so purchased as an investment on account of the sinking fund upon which interest was to continue for the benefit of that fund; and upon the cancellation of such bonds so purchased interest would cease to run thereon unless the interest coupon had been previously detached and negotiated.

4. Under section 3 of the internal improvement act (chapter 610 Laws, approved January 6, 1855), the trustees were invested with a discretion either to purchase and cancel bonds issued by a railroad company with the purchase money derived from the sale of such road by them under authority conferred by that section, or to incorporate it with the sinking fund provided by that act; and, if they exercised the discretion to purchase and cancel bonds, they were not required to purchase all bonds then outstanding, but only as many as they deemed advisable.

5. Ordinarily, where a plea in equity is set down for argument, its truth is admitted only for the purpose of testing its legal sufficiency. The judgment to be entered upon the allowance of such a plea upon argument is not definitive, for its truth may be denied by the plaintiff by replication, and the parties may then proceed to examine witnesses, the one to prove, the other to disprove, the facts stated in the plea; and no order of the court merely passing upon the legal sufficiency of the plea should preclude the plaintiff the right thus to controvert the truth of the facts alleged.

COUNSEL W. B. Young and W. H. Baker, for appellant.

Geo. P. Raney, for appellees.

OPINION

CARTER J.

A bill in equity was filed September 14, 1895, in the circuit court of Leon county by Samuel B. O. Wilson, suing in behalf of himself and other holders of certain bonds who might come in, prove their claims, and share in the costs of litigation, against Henry L. Mitchell, Governor of the state of Florida, William B. Lamar, attorney general of said state, W. D. Bloxham, comptroller of said state, C. B. Collins, treasurer of said state, and L. B. Wombwell, 'who,' the bill alleges, 'are sued as the trustees of the internal improvement fund of the state of Florida, a body corporate, created and existing under the laws of Florida.' The bill alleges that complainant is the owner of two bonds for $1,000 each, issued by the Florida, Atlantic & Gulf Central Railroad Company on April 26, 1859, in accordance with the provisions of the internal improvement act, and that said bonds were part of an issue of like tenor and date, limited to $10,000 per mile of said road, and that the internal improvement fund was especially charged with the payment of the interest coupons attached to the bonds; that the railroad company paid to the trustees of the internal improvement fund for several years after said issue of bonds large sums as a sinking fund for the redemption thereof, the precise amount being unknown to complainant; that in 1868, said railroad company having made default in the payments to said trustees as required by the terms of said internal improvement act, they caused the roadbed, iron, equipments, workshops, depots, and franchises of said company to be seized, and sold for payment of the arrears then due to the sinking fund, said sale being made in accordance with the provisions of section 3 of said act; that they received the sum of $111,000 from said sale, $83,200 of which they invested in the purchase of bonds of said company of the issue before mentioned, with coupons attached; that said trustees then purchased all of said bonds except 29, and that 21 or 22 are still outstanding, 7 having been subsequently purchased by the trustees; that after said sale the railroad company ceased to have any organization or corporate existence, and its property and franchises passed into the hands of another corporation, and was operated by said last-named corporation and its successors down to October, 1885, when it went into the hands of a receiver of the United States court; that for five or six years last past said railroad property has been owned and operated by the Florida Central & Peninsular Railroad Company; that from the Cate of the sale of said road in March, 1868, down to its seizure by a receiver of the United States court on the 1st day of October, 1885, no attempt was made by the trustees to enforce on the part of the owners of said road the payment of one-half of 1 per cent. semiannually to the sinking fund, as required by section 3 of said act, nor have they ever attempted to annul said contract of purchase, as it was their duty to do in case of failure to make said payments; that by the terms of section 2 of said act the individual property of each of the directors of the Florida, Atlantic & Gulf Central Railroad Company was made liable in an action of debt to said trustees for the amount due and unpaid, with 20 per cent. interest until paid, but said trustees have never sought to hold the individual property of said directors liable; that the only effort ever made by said trustees, since the sale in 1868, to discharge the duties imposed upon them by the law under which said bonds were issued, and which said duties were prescribed for the protection of the holders of said bonds, was the commencement of a suit in chancery in the circuit court of Duval county on February 19, 1889, against the Florida Central & Peninsular Railroad Company, the present owners of the road, and said suit has been permitted to drag along ever since, and never has been brought to a hearing; that said bonds were due and payable on September 1, 1892, and, if the trustees had discharged their duties, in accordance with the provisions of said act, from the time of their issue until the time they became due and payable, they would have been in possession of ample funds to have paid all of said outstanding bonds when the same became due; that appellant demanded payment from said trustees of his said bonds, and on July 16, 1895, they paid him $319.17 upon each, but refused to pay the balance, and that the balance of the principal, with interest from September 1, 1892, still remains unpaid.

The bill prays that an account be taken as to what is due appellant and such other holders of the same issue of bonds as may come in, make themselves parties, and prove their claims; and that an account be taken of the sinking fund in the hands of the trustees, or which should be in their hands if the trustees had discharged their duties in accordance with the provisions of said act; and that the trustees be required to pay the balance of the principal and overdue interest upon the bonds of appellants and all other bonds of that issue outstanding whose owners should come in, prove their claims, and share in the costs of the suit; and for general relief. A copy of one of appellant's bonds was attached, and made a part of the bill.

On December 2, 1895, a paper purporting to be the plea of Henry L. Mitchell, governor, William D. Bloxham, comptroller, C. B Collins, treasurer, Lucius B. Wombwell, commissioner of agriculture, and William B. Lamar, attorney general, of the state of Florida, as trustees of the internal improvement fund of said state, to the whole bill was filed, which alleges that the parties named were the trustees of the internal improvement fund, each being such trustee in and by virtue of the said several offices held by them, respectively, and not otherwise; that the said Bloxham has been comptroller since May 1, 1890, Wombwell commissioner of agriculture and Lamar attorney general since the first Tuesday after the first Monday in January, 1889, and Mitchell governor and Collins treasurer since the first Tuesday after the first Monday in January, 1893,--Bloxham, Wombwell, and Lamar having each begun a second term of their respective offices on the day last mentioned; that all of the Florida, Atlantic & Gulf Central Railroad bonds purchased by the trustess of the internal improvement fund...