Wilson v. Oswego Tp

• Decision Date: 03 January 1894
• Docket Number: No. 175,175
• Citation: 151 U.S. 56,14 S.Ct. 259,38 L.Ed. 70
• Parties: WILSON v. OSWEGO TP. et al
• Court: U.S. Supreme Court

151 U.S. 56

14 S.Ct. 259

38 L.Ed. 70

WILSON

v OSWEGO TP. et al.

No. 175.

January 3, 1894.

F. H. Bacon, for appellant.

John O'Day, for appellees.

Mr. Justice JACKSON delivered the opinion of the court.

The appellant, as the assignee of Edward Burgess, on August 10, 1886, filed his petition in the circuit court of the city of St. Louis, Mo., against the Union Savings Association, of that city; the Memphis, Carthage & Northwestern Railroad Company, a corporation organized under the laws of the state of Missouri; C. Montague, a nonresident of the state of Missouri; and certain unknown persons,—to recover possession of 22 bonds of Oswego township, state of Kansas, of the value of $500 each, held by the Union Savings Association as bailee or trustee.

The petition alleged that the Memphis, Carthage & Northwestern Railroad Company was empowered to construct, maintain, and operate a railroad in the states of Missouri and Kansas, through the township of Oswego, a political subdivision of the county of Labette, in the state of Kansas; that said township was authorized and empowered to vote, grant, and issue to the railroad company its bonds to aid in the construction of the railroad through the county of Labette; that after due proceedings had been had the township of Oswego voted, issued, executed, and delivered to the railroad company 22 of its bonds, of the value of $500 each, with interest coupons attached, bearing date September 2, 1872, numbered from 27 to 48, both inclusive; that the railroad corporation had previously entered into a contract with Edward Burgess to construct a portion of its road, and that Burgess, under this contract, engaged in the execution of a large amount of such construction work on the railroad; that the railroad company, under its contract with Burgess, was to pay for the work and labor performed and to be performed with the bonds of the township, including the bonds in question; that on September 17, 1873, the company was indebted to Burgess in a large sum of money for work and labor performed on the railroad under his contract, which Burgess was still engaged in carrying out; that the railroad company, at the request of Burgess, and in consideration of the work performed and to be performed by him, delivered to him and to the defendant C. Montague, trustee, jointly, said 22 bonds, upon the agreement and understanding between the railroad company, Burgess, and Montague that on the completion of the work then in progress on the railroad, up to the amount of the value of the 22 bonds, Montague would relinquish, for himself and for all others, these bonds to Burgess, which would then become the absolute property of the latter; and that, to carry out this agreement, the bonds, with all the coupons thereto attached, were placed by Burgess and Montague, jointly, in the custody of the defendant the Union Savings Association as trustee or bailee, where they were to remain until the completion of the work on the railroad by Burgess, when they were to be delivered by the Union Savings Association to him or his assigns on the demand of himself and Montague.

It was further set out in the petition that Burgess duly performed his work upon the railroad, under and in accordance with his contract, and became thereby entitled to the bonds, and that Montague ceased to have any right, interest, or claim thereto, either for himself of for any other person, and that the bonds became the absolute property of Burgess, who thereafter, for a valuable consideration, sold and assigned the bonds in controversy, with all his right, title, and interest therein and claim thereto, to the plaintiff.

The plaintiff also stated that, after the asle and assignment of the bonds to himself, he notified the defendant the Union Savings Association of his ownership thereof, and demanded them, which the defendatn refused to deliver without the assent of Montague.

The petitioner further alleged that he was informed and believed that certain persons, to him unknown, claimed an interest in these bonds and coupons, but that he could not state the nature of their interest, not the residence of the claimants.

The prayer of the petition was that the defendant the Union Savings Association be ordered to deliver the bonds and coupons in controversy to the plaintiff; that said unknown persons claiming an interest therein be duly notified by publication of the pendency of the suit, and be required to answer the same; and that the plaintiff have all such further relief as might be proper.

Upon the filing of this petition a summons was issued to the sheriff of the city of St. Louis, whose return thereon shows that the same was duly served upon the Union Savings Association in August, 1886, and upon the Memphis, Carthage & Northwestern Railroad Company on October 1, 1886. It further appears that publication was duly made for the defendant C. Montague, and the unknown parties having an interest in the bonds in controversy.

On October 11, 1886, the Oswego township, on its own motion, intervened in the cause, and was made a party defendant thereto.

At the October term, 1886, the Union Savings Association filed its answer to the petition, in which, after stating its want of knowledge or information as to the incorporation of the Memphis, Carthage & Northwestern Railroad Company, and the delivery to that company of the bonds in question, and other general allegations of the petition, denied that the bonds described, or any bonds, were placed by Burgess and Montague, jointly, in its custody, there to remain until Burgess had completed the work on the railroad, when they were to be delivered to him or his assigns on demand, but admitted that on December 17, 1873, Edward Burgess and C. Montague, trustee, deposited with it bonds which it believed to be the same referred to in the plaintiff's petition, and that it issued and delivered a receipt therefor to Burgess and Montague at their request, which was, in words and figures, as follows:

'Received, St. Louis, Dec'r 17th, 1873, of Edward Burgess and C. Montague, trustees, ten thousand five hundred dollars of Oswego township, Labette Co., Kansas bonds, issued to the Memphis, Carthage & Northwestern Railroad Company, the numbers being twenty-eight to forty-eight, inclusive, (also bond No. 27, 3-5 of which—$300 Worth—is to be held for same parties under same terms, in all $10,800 bonds;) each bond for $500, due 20 years after date, dated Sept. 2nd, 1872, annual interest at ten per cent., represented by the nineteen coupons attached to each bond; all of such ten thousand eight hundred dollars of bonds subject to the joint order of said C. Montague, trustee, or his successors or successor in office, and the said Edward Burgess, upon the return of this receipt duly indorsed. [Signed] James B. Love, Cashier.'

The defendant further answered that it had no knowledge that Burgess had completed the work on the railroad, nor of his having become the owner of the bonds, nor of his assignment to the plaintiff, and further, that, before the commencement of the suit, Montague, trustee, acting in the premises on behalf of the Oswego township, had notified defendant that Burgess was not entitled to the bonds.

The defendant also stated that it was ready and willing to surrender the bonds to the party or parties legally entitled thereto whenever it was settled in such manner as to protect defendant from further responsibility, and prayed that all claimants and the parties in interest might be brought into court and interplead for the bonds, and that it might be allowed a reasonable compensation for the custody thereof since the year 1873, and also a reasonable allowance for attorney's fees.

Montague and the Oswego township filed separate answers, in which they denied that the bonds in question had ever been delivered to the Memphis, Carthage & Northwestern Railroad Company under any legal authority; alleged that the bonds were void because they were never lawfully issued under any authorized election and vote of the people of the township to the railroad company; that they were never in fact delivered to that railroad company, but that they were delivered to the Union Savings Association to secure the payment by Burgess of all debts, liabilities, and obligations which might be contracted by him in the prosecution of the work upon the railroad through the township and county; that he had never performed this work, according to his contract with the railroad company, and, if the bonds had ever been regularly issued, he had never acquired a title thereto. The Oswego township therefore claimed that the bonds should be surrendered to it for cancellation.

The Memphis, Carthage & Northwestern Railroad Company failed to answer the petition, and made default thereto.

On December 4, 1886, Montague and the Oswego township filed their petition to have the cause removed to the circuit court of the United States on the ground that at the commencement of the suit, and at the time of the motion, they were citizens of the state of Kansas, while the plaintiff was a citizen of the state of Missouri; that the Union Savings Association, though a citizen of the state of Missouri, was only trustee of the bonds, and had no interest in the result of the controversy; and that the Memphis, Carthage & Northwestern Railroad Company, named as a party defendant, had never been served with process of entered its...