184 U.S. 450 | SCOTUS | 1902
O'BRIEN
v.
WHEELOCK.
Supreme Court of United States.
*480 Mr. Henry M. Duffield for complainants.
Mr. Thomas Worthington and Mr. W.H.H. Miller for certain respondents. Mr. Asa C. Matthews, Mr. Harry Higbee, and Mr. J. Otis Humphrey were on their brief.
MR. CHIEF JUSTICE FULLER delivered the opinion of the court.
The Circuit Court held in substance, among other things, that the decretal order of that court on the bill first filed adjudging the amounts reported by the master to be due the several complainants and giving them liberty to file a supplemental bill against the owners of the lands benefited to compel them to contribute to the payments of the amounts thus reported, was not an adjudication which precluded the land owners from denying *481 their liability; that as it was thirteen years after the act was declared to be unconstitutional and nine years after leave was given to file the supplemental bill, before any step was taken except as against those who were originally commissioners, there had been such laches as precluded complainants from having the relief sought, the conditions of the property and the relations of the parties having in the meantime greatly changed. The Circuit Court of Appeals held that even when exercising an independent judgment a Federal court should give effect to rules of construction previously established by the highest court of a State, and not act upon a different view unless compelled to do so to prevent an absolute denial of justice; that, applying the settled rule of construction of the State to the state constitution relating to the subject, the act of April 24, 1871, was unconstitutional, and assessments made thereunder were not enforceable; that the fact alone that land owners advocated and used their influence to secure the passage of a law under which bonds were issued, to be paid by special assessments against their lands, which law was subsequently declared unconstitutional, and the assessments void, did not afford ground on which a court of equity should declare a lien on such lands in favor of the bondholders, in the absence of fraud, and where both the land owners and the purchasers of the bonds acted in the mistaken belief that the bonds were valid; and that where bonds issued by commissioners in payment for the construction of a levee to protect lands from overflow, were void, a court of equity had no power to determine that certain lands received the benefit of the expenditure, and on that ground to declare a lien thereon in favor of the bondholders. The decree of the Circuit Court was not affirmed on the ground of laches, but the Circuit Court of Appeals nevertheless said (95 Fed. Rep. 110): "The plaintiffs can take nothing, as against the individual land owners, defendants in this cause, by reason of any order made in the suit instituted by Palms in the Circuit Court of the United States against the commissioners designated under the act of 1871; for the present defendant land owners were not parties to that suit, and could not be concluded by any order made in it. It is evident from the orders entered in that case that Judge *482 Drummond did not intend to pass upon the rights of the land owners, but was of opinion that if Palms had any ground of action against them, in respect of the lands attempted to be specially assessed under the act of 1871, he must bring them before the court by supplemental bill. He was given leave to file such a bill by an order entered in 1879. But he died in 1886 without availing himself of the privilege so given, although a large amount of interest was unpaid, and although nearly $100,000 of the bonds of the first issue had fallen due. The present bill was not filed until 1889, about nine years after it could have been filed. If the case depended alone upon the question of laches, there would be strong ground for holding that the plaintiffs and their testator so long delayed the institution of proceedings against the land owners that a court of equity ought to decline giving them any relief. The application of such a principle would be peculiarly appropriate, because it is provided by statute in Illinois that no execution can issue upon a judgment after the expiration of seven years from the time it becomes a lien, except upon the revival of the same by scire facias, and that an action to recover real estate shall be barred by seven years' residence thereon under a title of record, etc.; by seven years' adverse possession under color of title and payment of taxes, or, as to unoccupied land, by seven years' payment of taxes under color of title. 2 Starr & C. Ann. Stat. Ill. p. 1386, c. 77, § 6; Id. pp. 1538, 1539, 1547, c. 83, §§ 4, 6, 7. In this case most of the defendants made proof of adverse possession. Besides, as said in Johnston v. Mining Company, 148 U.S. 360, 370, `the mere institution of a suit does not of itself relieve a person from the charge of laches,' and `if he fail in the diligent prosecution of the action, the consequences are the same as though no action had been begun.'"
The bill is stated by counsel to be a bill to "enforce severally against the lands of certain defendants the lien of separate assessments for the construction of the levee, with the proceeds of which the levee was built, upon the grounds, 1st, that such assessments were levied in strict conformity with the terms of the statute of 1871, which was a valid law; and, 2d, that even if that statute was unconstitutional, many of the defendants *483 owning such lands are estopped to deny the constitutionality of said act and attack the assessments on that ground. It is not a bill to compel contributions to, or collect proportionate amounts of, a gross sum, but is a bill in the nature of a foreclosure bill to enforce, on the several and separate parcels of land, the liens of several and specific assessments upon the faith of which the moneys which built the levees were advanced."
It is insisted that it is not a bill to collect a tax, or a bill "to hold any municipal corporation or any individual liable, directly or indirectly, at law or in equity."
The bill purports to be an original bill in the nature of a supplemental bill, supplemental to the bill originally filed by Palms, either by way of enforcing the decretal order entered on that bill, treated as a final decree, or, treating that order as interlocutory merely, of obtaining a decree on the whole case as against new parties. Which view is taken is perhaps not material, for "where a party returns to a court of chancery to obtain its aid in executing a former decree, it is at the risk of opening up such decree as respects the relief to be granted on the new bill." Lawrence Manufacturing Company v. Janesville Mills, 138 U.S. 552, 561. And, moreover, the bill is an original bill as to the land owners.
Palms filed that bill, on behalf of himself and others similarly situated, May 4, 1878, against Wheelock, Jones and West-lake, as commissioners appointed under the act of April 24, 1871, praying that the moneys "loaned and advanced" by complainant to those commissioners be ascertained, and a decree entered that complainant was entitled to a lien on the levee, and other works and lands, acquired by the commissioners, and the assessments for benefits to said lands, which had been made; and further that the commissioners be decreed to proceed at once to collect the assessments, or so much thereof from time to time as would be sufficient to pay the interest and principal payable to complainant as the same fell due, or that the court appoint a receiver or receivers with authority to collect said assessments.
The commissioners were not impleaded as representing the land owners in the litigation. Their duties were such as the *484 act of 1871 defined, if that act were valid, and their powers were created and limited thereby, and did not include the power to bind all or any of the land owners of the district in such a suit. The suit was brought to compel the commissioners to discharge the duty, under the act, of enforcing the collection of assessments in the interest of the bondholders, as creditors, and in that sense, they occupied an adverse relation to the land owners who were quasi debtors.
The commissioners had filed in the county court of Pike County their assessment roll in 1872, and objections thereto by certain land owners having been decided adversely to them by the county court, and, on appeal, by the circuit court of the county, they took the case to the Supreme Court of the State, which decided that the act of 1871 was unconstitutional. This judgment was pronounced at January term 1876. It was after this that, interest being overdue on the bonds held by him, Mr. Palms filed his bill. Some other bondholders became parties complainant, and on March 13, 1879, an order was entered permitting complainants to bring the land owners into court and test the question of their liability, and the cause was referred to a master. July 7, 1880, the report of the master was confirmed and the court adjudged and decreed that there was due to Palms $221,228.66, and to various other complainants some thousands of dollars as specified, the whole aggregate sum found due complainants being $304,908.26, it being added: "The above amounts are found due without prejudice." It was further decreed that the sums of money found due were "a lien upon the assessments made under the order of the county court of Pike County, in the State of Illinois, upon the lands described in the bound book Exhibit A" as provided in the twenty-seventh and thirty-seventh sections of the act of April 24, 1871. The order proceeded that it appearing that the commissioners had no moneys in their hands for the payment of the amounts so found due, and that they had taken no steps for the collection of the assessments, it was further ordered by the court "that the complainants have the right and liberty to proceed in this court in the name of the said defendants as complainants and as such commissioners, or in their own names as *485 complainants against the lands described in the said Exhibit A and the owners thereof, or such of such lands and the owners thereof, or other persons, and said commissioners as they may be advised are liable for or bound to pay the sums found to be due to the complainants as aforesaid, jointly or severally, by a bill or bills, original, supplemental or otherwise, as they may be advised, for the recovery of the amounts found due them as aforesaid and also for the costs of this suit." Both these orders show that the Circuit Judge was of opinion that to subject the lands to the assessments in that suit the land owners must be made parties; and even the amounts found due were in terms so found without prejudice to their rights.
No steps were subsequently taken, and Mr. Palms died November 24, 1886. His executors, on April 22, 1889, filed the present bill against some thousand land owners of the district as well as Wheelock and Jones, two of the alleged levee commissioners, Westlake in the meantime having deceased.
It was an original bill as to these new parties and they were entitled to all the defences which existed when it was filed, and were unaffected by the principle of lis pendens. The Supreme Court of Illinois had held in 1876 that the act of April 24, 1871, was in contravention of the constitution of the State and void. This decision was made after the bonds in question had been issued and purchased by Palms from the contractors, but the judgment was rendered on objections by the land owners to the confirmation of the assessments, the collection of which was relied on for the payment of the principal and interest of the bonds, so that it might well be held to be binding on the Federal courts. But we agree with the Circuit Court of Appeals that even if the Circuit Court was not obliged to accept that decision, yet that there was so little doubt of its correctness as to require the same conclusion. The rulings of the state Supreme Court were that the work of constructing a great levee along the bank of a river subject to overflow, and independent of a system of drainage, was not embraced within the act of 1871; that section 31 of article IV of the constitution of 1870, that "The General Assembly may pass laws permitting the owners or occupants of lands to construct drains and ditches *486 ____ for agricultural and sanitary purposes across the lands of others," did not authorize the construction of a levee independent of drainage; that section 9 of article IX of that constitution was a limitation on the power of the Legislature, which could only vest such power in such municipalities and not in any other bodies, though other municipalities might be vested with jurisdiction to assess and collect taxes for corporate purposes subject to the rule of uniformity as to persons and property; and that the burden of taxation by special assessment could not be imposed on a locality without the consent of the taxpayers to be affected. And the court held, in respect of the act of 1871, "that neither the commissioners or the juries selected, nor the county court, is such a body as, under the constitution, may be given power to make local improvements by special assessments or by special taxation on contiguous property;" and also that "under this law, the people whose property is subject to taxation or assessments have never given any consent to it, if we exclude those who may have signed the petition addressed to the county court."
Section 5 of article IX of the state constitution of 1848 provided: "The corporate authorities of counties, townships, school districts, cities, towns, and villages may be vested with power to assess and collect taxes for corporate purposes; such taxes to be uniform in respect to persons and property within the jurisdiction of the body imposing the same."
Section 9 of article IX of the constitution of 1870 read: "The General Assembly may vest the corporate authorities of cities, towns, and villages with power to make local improvements by special assessment, or by special taxation of contiguous property or otherwise. For all other corporate purposes, all municipal corporations may be vested with authority to assess and collect taxes; but such taxes shall be uniform, in respect to persons and property, within the jurisdiction of the body imposing the same."
These provisions of the two constitutions are substantially identical, and while prior to the act of 1871, the clause of the constitution of 1870 had not been construed by the Supreme Court of the State, the similar provision in the constitution of *487 1848 had been construed in several instances. And it was ruled that the right of taxation could not be granted by the general assembly in any form to private persons, or to private corporations; that the provision limited the power of the general assembly to grant the right to assess and collect taxes to the corporate or local authorities of the municipalities or districts to be taxed; that a local burden of taxation or special assessment could not be imposed upon a locality without the consent of the taxpayers to be affected; and that corporate authorities were municipal officers directly elected by the people of the municipality or appointed in some mode to which they had given their assent. Harward v. St. Clair and Monroe Levee & Drainage Company, 51 Ill. 130; Hessler v. Drainage Commissioners, 53 Ill. 105; Lovingston v. Wider, 53 Ill. 302; Wider v. City of East St. Louis, 55 Ill. 133; People v. Salomon, 51 Ill. 37.
The construction of the state constitution in Harward's case and others has been repeatedly recognized by this court as authoritatively established.
And as this was the settled law of the State when these bonds were issued, and the constitution of 1870 admitted of no other construction, we concur in the opinion that the act of 1871 was repugnant to the constitution of Illinois; the bonds due under it were void; and the lands intended to be benefited could not be specially assessed by any action taken in conformity with the provisions of that act.
The case of Blake v. People, 109 Ill. 504, conducts to no other result. That case arose under the act of May 29, 1879, which was passed after the amendment of the state constitution adopted in 1878. That amendment provided that the general assembly might pass laws permitting the owners of lands to construct drains, ditches and levees across the lands of others, and to organize drainage districts and vest the corporate authorities thereof with power to construct and maintain levees, drains and ditches, "and to keep in repair all drains, ditches and levees heretofore constructed under the laws of this State, by special assessment upon the property benefited thereby." The new levee district was organized under this act to repair *488 the levee which had been built under the invalid law of 1871. The objection was raised by a land owner, on the application of the collector of the county for judgment against his land on an assessment, that the old levee had not been built under a law of the State within the meaning of the act and of the constitution, because the act of 1871 was no law. The court held that the point should have been raised before the confirmation of the assessment roll, and came too late. The court also held that it could not take judicial notice that the purpose for which the corporation was created was not to keep in repair levees theretofore constructed under a law of the State, but assuming the question to be properly before the court, that while the act of 1871 was unconstitutional as affecting those over whose lands the drains, levees, etc., were to be constructed without the owners' consent, and those against whose property it was proposed to assess the cost of constructing such drains and levees without their consent, yet that there might be some person so situated as to be precluded from raising the question of the validity of the law. And while, strictly speaking, there neither was nor could be any levee in Illinois constructed under a law of the State, yet that the legislature plainly meant to authorize the completion and repair of levees that had been constructed under an act purporting to be a law, though it was not. The court said: "There was no law in force authorizing the construction of levees over the lands of others (save the act of April 24, 1871) at the time Updike v. Wright, and Webster v. Levee Commissioners, were decided. To obviate the effect of those decisions allow the construction of levees, as well as drains, upon the lands of others and to authorize the formation of municipal corporations for the purpose of constructing drains and levees, the amendment to section 31, article IV, was submitted to, and adopted by, the people, at the November election, in 1878. The act of May 29, 1879, but repeats, in this respect, the language of that amendment. The levees, therefore, which must have been referred to, because none other could reasonably have been intended, were the levees which had been constructed, but could not be *489 kept in repair because of the decisions in Updike v. Wright, and Webster v. Levee Commissioners."
The act of April 24, 1871, being invalid, the corporate existence of the levee commissioners, and the assessments made at their instance, and the collection of the latter under that act, or under the act of April 9, 1872, entitled "An act to provide for the registration of drainage and levee bonds, and secure the payment of the same," failed with it. But it is contended that while all this may be so as to the general public, yet that appellees, or some of them, have so conducted themselves that they are estopped from asserting such invalidity, and that the Circuit Court should have enforced the assessments exactly as if the law had been a constitutional enactment. The bill sought to collect not only the assessments already made, but asked to have further assessments made to pay the bonds in full, and to maintain and preserve the security; and the court was also asked to declare that the assessments created valid liens upon the lands, and to decree that the bonds sued on were a lien on the assessments and to enforce their collection. In other words, that the court execute the act, either as in itself wholly valid or valid as to these defendants. We are unwilling to assent to the doctrine of legislation by estoppel. The courts cannot, by the execution of an unconstitutional law as a law, supply the want of power in the legislative department.
In South Ottawa v. Perkins, 94 U.S. 267, this court said: "There can be no estoppel in the way of ascertaining the existence of a law. That which purports to be a law of a State is a law, or it is not a law, according as the truth of the fact may be, and not according to the shifting circumstances of parties. It would be an intolerable state of things if a document purporting to be an act of the legislature could thus be a law in one case and for one party, and not a law in another case and for another party; a law to-day, and not a law to-morrow; a law in one place, and not a law in another in the same State. And whether it be a law, or not a law, is a judicial question, to be settled and determined by the courts and judges. The doctrine of estoppel is totally inadmissible in the case."
In that case the invalidity of the law grew out of the fact *490 that the journals of the Senate and House did not show the passage of the bill as the constitution required it to be shown. Bonds had been issued, bought innocently, and the town had paid one installment of interest, but it was held that the bonds could not be sustained on the doctrine of estoppel. In this case the bonds were signed, issued and sold by the commissioners, and the interest which was paid was paid by the commissioners. The land owners had no control of the question whether bonds should be issued, and were not in privity of contract with the purchasers of the bonds. As the act, the assessments, and the bonds were void, the land owners, when it was sought to subject their property to those assessments for the payment of the void bonds, could not be estopped on the ground that the law itself, though void, was valid as to them.
Even in the instance of contracts of a corporation beyond the scope of its corporate powers, the law is well settled in this court that nothing which has been done under them or the action of the courts can infuse any vitality into them. Central Transportation Company v. Pullman Company, 139 U.S. 24.
Daniels v. Tearney, 102 U.S. 415, though not precisely in point, is illustrative of the distinction between enforcing an invalid law in an executory way, and awarding relief in respect of things accomplished under it. In that case, the secession convention of the State of Virginia had passed an ordinance providing that any person whose property had been taken on execution, might, by giving a bond for the payment of the judgment, have his goods released so long as the law should remain in force. Porter recovered a judgment against Daniels in the Circuit Court of Jefferson County, and Daniels availed himself of the ordinance by filing the required bond. To a suit brought on the bond by Tearney et al., executors of Porter, after the close of the civil war, the defence was made that the law under which the bond was given was unconstitutional, and so that the bond was void. There was a difference of opinion in the court as to whether the bond was good as a voluntary bond or not, but it was held that conceding the bond to have been wholly void, the judgment upon it ought not to be reversed, on the principle that where a party has availed himself for his benefit *491 of an unconstitutional law he is estopped as between himself and others not occupying that position from setting up its unconstitutionality as a defence. The obligee of the bond sued on had not availed himself of the void ordinance, but was deprived of his rights by it. He had not in any way, expressly or impliedly, made himself a party to the illegal proceeding, or affirmatively agreed to take any advantage from it, while the consideration of the bond had been fully received by the obligor, who could not, under such circumstances, be permitted to deny a liability put upon the obligee in invitum.
It follows that this bill cannot be maintained on the theory of the validity of the act of 1871, even though some other equity might have been asserted if in the exercise of reasonable diligence. The result is not inconsistent with the cases that hold that although a law is found to be unconstitutional, a party who has received the full benefit under it, may be compelled to pay for that benefit according to the terms of the law. This is upon the theory of an implied contract, the terms of which may be sought in the invalid law, and which arises when the full consideration has been received by the party against whom the contract is sought to be enforced.
In the case before us, the land owners did not and could not receive the benefits which it was contemplated would accrue to them from the proceedings if they had been valid. As the Circuit Court of Appeals pointed out what the land owners, who promoted the passage of and proceeded under the act of 1871, had in view "was not simply to have a levee constructed, but to have a sufficient levee, which could be repaired from time to time and permanently maintained under legal authority." The scheme embraced not only the construction but the maintenance of the levee and must be looked at in its entirety. "If it be said that the plaintiffs' testator would never have purchased the bonds except in the belief that the act of 1871 was valid, with equal truth it may be said the land owners would never have sought nor desired such legislation except in the belief that the levee would be maintained by the same authority that constructed it." When the law fell, the method of maintaining it by compulsory process also failed, and if it be said that there *492 was only a partial failure of consideration, it is plain that the consideration was indivisible and not susceptible of apportionment, while the evidence demonstrates that the losses suffered by the land owners by reason of the breaking of the levee exceeded the amount of the bonds in question.
The grounds of estoppel claimed in this case seem to be, that one or more of the defendants secured the passage of the act of 1871; that others actively participated as petitioners and otherwise in the organization of the levee district before the bonds were issued; that others who took no part whatever in any of the proceedings, after the bonds were issued and the law was held to be unconstitutional, united in an attempt to maintain and repair the levee by voluntary contributions; that others, who neither said nor did anything, knowing that the proceedings were pending and that the levee was in course of construction, remained quiescent; that others paid interest on their assessments for the years 1873 and 1874; that others participated in the organization of the new and legal levee district after the constitution of Illinois had been amended and a law passed authorizing the formation of levee districts; and that others purchased lands after the Webster case was decided, and their deeds contained certain references to the act of 1871.
We think that the evidence fails to show that Palms relied, or had the right to rely, on the acts, or assurances, or silence, of any of these different classes of land owners, and was thereby misled. He purchased the bonds, not of the land owners, or any of them, nor from the levee commissioners, but in the open market, and on the advice of counsel as to the legality of the proceedings. The land owners who participated in any way in the creation of the drainage district were as vitally interested in the matter as any purchaser of bonds could be, and they acted equally in the mistaken belief that the law was valid. "It is a novel idea," as the Supreme Court of Illinois remarked in Holcomb v. Boynton, 151 Ill. 300, "in the law of estoppel that the doctrine should be applied to a person who has been guilty of no fraud, simply because, under a misapprehension of the law, he has treated as legal and valid an act void and open to the inspection of all." But we need not pursue the discussion, *493 for, in view of the invalidity of the proceedings, if complainants had a cause of action, that cause of action arose before May 4, 1878, when Palms filed his bill, yet the land owners were not proceeded against until the 22d of April, 1889.
The statute of limitations of Illinois provided that actions on unwritten contracts, express or implied, and all civil actions not otherwise provided for, should be commenced within five years next after the cause of action accrued. Courts of equity usually consider themselves bound by the statutes of limitation which govern courts of law in like cases. In the second aspect of their bill appellants did not rely on their bonds as legal instruments, but they sought the aid of a court of equity for the enforcement of a lien in payment of the bonds by reason of an estoppel in pais, and the cause of action so created would seem to have been barred by that statute. But courts of equity go farther in the promotion of justice, and where laches exist, deny the relief sought, even though the statutory period may not have run under the applicable statute.
The doctrine of courts of equity to withhold relief from those who have delayed the assertion of their claims for an unreasonable length of time is thoroughly settled. Its application depends on the circumstances of the particular case. It is not a mere matter of lapse of time, but of change of situation during neglectful repose, rendering it inequitable to afford relief.
Palms purchased these bonds of the contractors to whom they had been delivered by the commissioners, who assumed a right to issue and make that disposition of them by virtue of the power to borrow money granted by the act of 1871. The enterprise of erecting such a barrier to the incursions of the river was, in its nature, hazardous, and the levee required not only the utmost skill in construction, but the utmost effort and vigilance in its repair and maintenance. The transaction was in its nature speculative as the value of the reclaimed lands depended on the permanency of the structure.
The enforcement of the assessments for benefits on which the payment of the cost of the work depended was resisted from the first by certain land owners, who had opposed the scheme as attempted to be authorized, and their legality was brought *494 to the test as soon as in the orderly progress of judicial proceedings it could be done. The result was that in 1876 the act of 1871 was held void and the assessments illegal. In that same year the levee broke and the lands were devastated. In 1877 some of the land owners raised some thousands of dollars, giving trust deeds as security, for the repair of the levee, the money to be devoted to that purpose exclusively, and repairs were made.
May 4, 1878, Mr. Palms filed his bill, to which the land owners were not made parties. The principal of the first and largest assessment was payable one tenth annually beginning with 1882, but the interest, at the rate of ten per cent per annum from October 1, 1872, was collectible annually, and the interest on the bonds was also payable yearly. The instalments of interest for 1875, 1876 and 1877 had not been paid, and those succeeding remained unpaid.
In 1880 the Circuit Court entered the order permitting Palms to bring in the land owners by filing a supplemental or an original bill; and in that same year there were numerous breaks in the levee.
During the same year a new drainage district was organized under the provisions of the act of 1879, which had been passed in accordance with the constitutional amendment of 1878. Large assessments were levied upon the lands, aggregating hundreds of thousands of dollars, and the money was put into the property. In 1881 the levee broke again, but the new drainage corporation went on with its work. The levee broke again in 1888, and additional assessments were levied.
Palms did not avail himself of the order, in the original cause, of July 7, 1880. He took no further steps, and died November 24, 1886. His executors filed this bill April 22, 1889. The record affords no explanation of the delay, and it seems to us that this was such laches as forbid relief. To enforce these bonds against those by whose courage, energy and expenditure the lands have attained whatever value they now possess, would in our judgment be too inequitable to be permitted.
Mr. Palms knew of the decisions of the Supreme Court of Illinois in the Webster and Updike cases; of the breaks in the *495 levee; of the efforts of the land owners to rebuild and maintain it by large expenditures of money; and he could not lie by until after such expenditures, and with the condition of the district and the personnel of its people constantly changing, and then insist that during all this time the parties were under a liability to him which, in equity, they were estopped to deny.
So far as part of the old levee became part of the new levee, the new drainage corporation used it because they could not do otherwise, and besides Palms, as a purchaser of bonds in the open market, was a stranger to the work. Even if the contractors could have claimed an equitable lien on the structure itself, Palms could not, and, indeed, any resort to subrogation is disclaimed by appellants' counsel. Such a claim could not have been successfully maintained under our decision in AEtna Insurance Co. v. Middleport; 124 U.S. 534. There the town of Middleport had issued certain bonds to aid in the construction of a railroad; the road was constructed and the bonds delivered to the railroad company in payment of the work, and were afterwards sold to the complainant. The Supreme Court of the State of Illinois held the bonds void, and a bill was filed in the Circuit Court of the United States to enforce their collection on the theory of subrogation to the right of the railroad company to enforce the contract evidenced by a vote of the town appropriating the amount involved to pay for the railroad, and the acceptance and fulfillment of the contract by the railroad company. But it was decided that complainant having bought the bonds as negotiable securities from the railroad company, could not be substituted to any rights which it might have had against the defendants; that no right of subrogation existed; that subrogation was applicable only in cases where a junior incumbrancer was forced to pay off a superior lien for the protection of his rights, or in some similar case; and that a mere volunteer was not entitled to claim the right.
It is worthy of remark that the decree of the Circuit Court in that case was placed on the ground that the right of action of the railroad company, resting only in parol, was barred by the statute applicable to contracts not in writing. Blodgett, J., 31 Fed. Rep. 874.
*496 Here no bonds were ever sold by the commissioners to Palms or any one representing him. They were delivered to the contractors and were taken in payment at ninety cents on the dollar of their face value. If the acts of any of the land owners created any equities against them it was in favor of the contractors, and these equities could not be asserted by Mr. Palms, unless by subrogation, which could not be availed of. And if it could be held that the money of Mr. Palms did enter into the construction of the levee, yet it was inextricably intermingled with that furnished by private individuals, by the new levee and drainage district, by three railroad companies, and by the United States government, the total aggregating half a million dollars, from 1877 to 1893.
In Litchfield v. Ballou, 114 U.S. 190, it was held that a creditor who had loaned to a municipal corporation, in excess of the amount of the indebtedness authorized by the constitution, money which had been used in part for the construction of public works, was not entitled to a decree in equity for the return of his money, because the municipality had parted with the specific money and it could not be identified; that a bill in equity praying for the return of specific and identical moneys borrowed by a municipal corporation from complainant in violation of law would not support a general decree that there was due from the municipality to him a sum named, which was equal to the amount borrowed; and further, that a constitutional provision forbidding the municipality from borrowing money operated equally to prevent moneys loaned to it in violation of this provision and used in the construction of a public work, from becoming a lien upon the works constructed with it.
And if in this case any ground of relief on the theory of implied contract ever existed, the want of diligence presented an insuperable bar to its assertion.
Decree affirmed.
MR. JUSTICE BROWN did not hear the argument and took no part in the decision of this case.
