Morgan v. Beloit City and Town

APPEAL from the Circuit Court for Wisconsin.

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 bon a 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 re-enacted 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 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.

Mr. Carpenter, for the appellant:

The complainant was clearly entitled to some remedy against the city for its proportion of the debt, and the question is, what was the appropriate remedy?

On bonds given by the town, a joint action at law could not be maintained against the town and city. To an action at law against the city alone, the plea of non est factum would be true in fact and fatal in law. If any action at law could be maintained against the city, it would be debt founded on the statute. But there would be the difficulty of settling, as between the city and the town, the proportion which each ought to pay, in an action where the town was not a party. This consideration alone gives a court of equity jurisdiction. If the town were compelled to pay the whole debt, it would be entitled, by the express provisions of the statute, to an action against the city for its proportion. Circuity of actions-that which courts desire to prevent-is therefore avoided by maintaining a suit in equity against both. A court of equity is the only tribunal that can render complete justice between all the parties.