Where the legislature creates a city, carving it out of a region
previously a town only, and enacts that all bonds which had been
previously issued by the town should be paid when the same fell due
by the
city and town in the same proportions as if said
town and city were not dissolved, and that if either at any time
pays more than its proportion, the other shall be liable therefore,
a bill will lie in equity to enforce payment by the two bodies
respectively in the proportion which the assessment rolls
Page 74 U. S. 614
show that the property in one bears to the property in the
other. A bondholder is not confined to
mandamus or other
legal remedies, if such exist.
In 1853, the Legislature of Wisconsin authorized
the
Town of Beloit to subscribe to the stock of a railroad
company, and to pay therefor in bonds of the town. The town
subscribed and issued its bonds, a portion of which came to the
hands of one Morgan, a
bona fide purchaser.
In 1856, the legislature created
the City of Beloit,
this city being carved out of a portion of the territory which had
constituted the Town of Beloit. The charter of the new city thus
provided:
"All principal and interest upon all bonds which have heretofore
been issued by the Town of Beloit, . . .
shall be paid when the
same or any portion thereof shall fall due by the
City and
Town of Beloit in the
same
proportions as if said town and city were not dissolved. And in
case either town or city shall pay more than their just and equal
portion of the same at any time, the other party shall be liable
therefor."
This provision was reenacted in 1857.
After the date of this act, and between it and 1867
inclusive -- the interest on the bonds being unpaid for every year
after 1854 -- Morgan brought several suits in the Circuit Court for
Wisconsin against "the Town of Beloit" for the interest due for the
years respectively, and on the 25th of September, 1867, got
judgment against the
town for it. The judgments being
unpaid, he now filed a bill in the court below against the
Town
and City of Beloit. The bill set forth facts above stated,
alleged that the "amount of said judgments
ought to be
paid by said defendants in the proportions respectively as provided
in the said acts," that the taxable property of the city exceeded
that of the town, and that though the city "ought to pay the
proportion provided in the acts," yet that the complainant was
remediless at law. It then showed by tabular exhibit the amount of
the interest due on the bonds held by him in each year respectively
from 1855
Page 74 U. S. 615
to 1867; then by like exhibit the proportion in value which,
taking the rates of assessment made in each year as a basis, the
taxable property of what was now the town bore to what was now the
city in every year from 1855 to 1867; then showed, by similar
exhibit that, taking these relative exhibits, the town would be
liable on the coupons for each respective year for so much and the
city for so much, the balance -- namely the whole making, with
interest from the date of the judgments obtained (which the bill
alleged "ought to be paid by the said town and city respectively"),
the sum of $60,443 as against the city and $17,986 as against the
town.
After alleging that "the city and town ought respectively to pay
interest" on the respective total amounts, from the day when the
judgments were obtained till the actual payment of them, and "ought
each to pay one-half the costs recovered in the judgments," the
bill concluded thus:
"To the end, therefore, that the said defendants may, if they
can, show why your orator should not have
the relief hereby
prayed, and may upon oath &c. . . . and that your orator
may have such
other and further relief as the nature of
his case may require and as shall be agreeable to equity and good
conscience."
Prayer for subpoena &c.
The defendants (town and city) demurred, and the bill was
dismissed. Appeal accordingly.
Page 74 U. S. 617
MR. JUSTICE SWAYNE delivered the opinion of the Court.
The bill of the appellant presents the following case:
In the year 1853, the Legislature of Wisconsin, by an act duly
passed, authorized the
Town of Beloit to subscribe for
$100,000 of the stock of a railroad company authorized to construct
a railroad from the City of Racine to the Village of Beloit, and to
make payment in its bonds to be issued for that purpose. The bonds
were accordingly issued. A portion of them came into the hands of
the appellant, and he recovered upon them the several judgments at
law described in the bill. These judgments are all in full force
and unsatisfied. By an act of the legislature passed in 1856, the
City of Beloit was created. It embraces a part of the
territory which before constituted the
Town of Beloit.
This act provides:
"That all principal and interest upon all bonds which have
heretofore been issued by
the Town of Beloit for railroad
stock or other purposes, shall be paid, when the same or any
portion thereof shall fall due,
by the City and
Town
of Beloit in the same proportions as if the said city and town
were not dissolved."
This provision was reenacted in 1857.
It is averred that the
city and
town ought
respectively to pay the proportions set forth -- of the judgments
-- with interest from their several dates. The prayer is for
general relief. The appellee demurred. The court sustained the
demurrer and dismissed the bill. This appeal was thereupon
taken.
The two corporations are as separate and distinct as if the
territories they embrace respectively had never been united. It is
obvious that without a legislative provision to that effect,
the city would not be answerable at law for the debts of
the town incurred before the former was created.
Whether,
Page 74 U. S. 618
but for the statute, the city there would have been chargeable
in equity it is not necessary to consider. The statute is
conclusive as to a liability, to be enforced in some form of
procedure. The only question before us is whether there is a remedy
in equity. It may be, as suggested by the counsel for the
appellant, that an action would lie upon the statute. It is also
possible that a proper case for a writ of mandamus might be made.
But these inquiries are only material as bearing upon the question
whether there is an adequate remedy at law. If so, a suit in equity
cannot be maintained. To have this effect, the remedy at law
"must be as plain, adequate, and complete,' and 'as practical
and efficient to the ends of justice, and to its prompt
administration, as the remedy in equity. [
Footnote 1]"
When the remedy at law is of this character, the party seeking
redress must pursue it. In such cases, the adverse party has a
constitutional right to a trial by jury. [
Footnote 2] The objection is regarded as
jurisdictional, and may be enforced by the court
sua
sponte, though not raised by the pleadings nor suggested by
counsel. [
Footnote 3] The
provision upon the subject in the sixteenth section of the
Judiciary Act of 1789 was only declaratory of the preexisting
rule.
In the case before us, the adjustment of the amount to be paid
by the city will depend upon accounts and computations founded upon
the proper assessment rolls. In order to bind the town, it is
necessary that it should be made a party. This cannot be done in
proceedings at law. If the town should be compelled to pay the
entire amount, the right is given by the statute to recover back
the proportion for which the city is liable. This would involve
circuity of litigation. The remedy at law is therefore neither
plain nor adequate.
The question whether a bill in equity will lie is disembarrassed
of this objection.
The authority to tax for the payment of municipal
liabilities
Page 74 U. S. 619
in cases like this is in the nature of a trust. [
Footnote 4] The jurisdiction on a court of
equity to interfere in all cases involving such an ingredient, is
too clear to require any citation of authorities. It rests upon an
elementary principle of equity jurisprudence.
"The power is reserved to a court of equity to act upon a
principle often above-mentioned, namely, that whenever there is a
right it ought to be made effectual. [
Footnote 5]"
Where there is a right which the common law, from any
imperfection, cannot enforce, it is the province and duty of a
court of equity to supply the defect and furnish the remedy.
[
Footnote 6]
The decree is reversed. A mandate will be sent to the
circuit court directing that the demurrer be overruled, and the
cause proceeded in according to the principles of equity and the
rules of equity practice.
[
Footnote 1]
Boyce v.
Grundy, 3 Pet. 215.
[
Footnote 2]
Hipp v.
Babin, 19 How. 278.
[
Footnote 3]
Fowle v.
Lawrason, 5 Pet. 496;
Dade v.
Irwin, 2 How. 383.
[
Footnote 4]
Von Hoffman v. City of
Quincy, 4 Wall. 555.
[
Footnote 5]
1 Kaime's Principles of Equity 3.
[
Footnote 6]
Quick v. Stuyvesant, 2 Paige 92.
