304
FEDERAL REPORTER.
question the existence of !t trust thus recognized by her, or to gainsay '. her deliberate act. James McAuley's will was executed more than one calendar month before lle died. Whether the understanding with his devisee was entered into contemporaneously with,the signing of his will, or before or after, is not known. There is, however, nothing to indicate that the arrangement was made within one month before his death, nor is this alleged in the bill. In Manners v. Libmry Ca., 93 Pa. St. 176, it is said that the act of April 26, 1855, being in' derogation of the common-law right of conveyance, the averments of a bill must be so distinct and clear as to bring the case within the terms of the law. Certainly a court of equity will not assume illegality in this trust, but, in furtherance of the beneficent intention of the donor, will rather make every reasonable presumption favorable to its validity. In respect to the second named charity , "The Home for Protestant Destitute Women," there is a misnomer; the true title being, "The Home for Aged Protestant Wo,men;" but this is not material, as it clearly appears that this is the institution intended. Society's Appeal, 30 Pa. St. 425. 2. In awarding the personal estate of the decedent (Mary McAuley) to the first cousins to the exclusion of the second cousins, the master followed the decision of the supreme court of Pennsylvania in Brenneman's Appeal,40 Pa. St. 115. The precise question was involved and directly ruled in that case; and it is conceded that, if we follow that ruling,the master's distribution must be confirmed. That decision has never been qualified or questioned by the supreme court. As it gives a construction to the Pennsylvania statutes of distribution in cases of intestacy, it is binding upon this court here, even were our own judgment diBerent. LeffingweU v. Warren, 2 Black, 599. But, in truth, we entertain no doubt whatever as to the correctness of the decision. In our . opinion it is clearly in accordance with the terms and intent of the statutes
HEDGES
et al. ".
DIXON COUNTY.
«(Jfrcuit Court, D.NelYra8ka. January, 1889.) RAILROAD COMPANIES-MuNICIPAL AID-EXCESSIVE ISSUE-EQUITy-POWEB TO SCALE. .
Where a (Jounty's issue of bonds for donation to a railroad bas been held void in a court of law, as in e·xcess of the constitutional limit of indebtedness, equity bas no power to scale down the issue to the limit, and enforce it against . the county, tbe contract being indivisible, and void in toto, and there being no executed consideration to support an implied promise.
In Equity. Bill by Daniel T. Hedges and others to scale down'an:d enforce an issue of the bonds of defendant coilnty, said issue having been the held void as inexces>l of the constitutional limtt of indebtedness county, Defendant demurs.. J. Jtf. Woolworth, for complainant.
HEDGES II. DIXON COUNTY·
306
.d. J. Pappleton, J. B. Barnes, and J. M. Thurston, for respondent. BREWFlR, J. The facts in this case are these: In 1876, Dixon county, the defendant herein, issued $87,000 of its bonds as a donation to the Covington, Columbus & Black Hills Railroad Company. The amount of such issue exceeded 10 per cent. of the assessed value of the property of the county, by reason whereof it has been finally adjudged by the supreme court that the bonds were void. Dixon Co; v. Field, 111 U. S. 81, 4 Sup; Ct. Rep. 315. This bill is brought by the complainants, who own nearly all of the bonds thus issued, prayillg that they may be scaled down to an amount equal to 10 per cent. of the assessed valuation of the property of the county at the time of the issue, and to that extent held as valid obligations of the_county, and a decree entered against it therefor. The complainants offer to accept such reduced amount in sat.isfaction, and' tender their bonds for cancellation on payment thereof. They also pray that the holders of the other bonds, when known, be brol:1ght before the court and impleaded in this bill, and given the same rights. To this bill the defendant demurs on the ground that it states no ground of action. , .Conceding that the bonds, as they stand, are void, and that no recovery can be had thereon in a court of law, complainants insist that a court of equity has power to scale them down to an amount equal to that that the county might lawfully have issued, and enforce them when thus scaled down. It is said that the vice of this transaction is only in' the matter of excess; that a court of equity may expunge the vice, and enforce the contract thus freed from taint. Counsel for complainants concedes that he has been.unable to find any precedentfor such a proceeding, and his confession of inability is satisfactory evidence that no such precedent exists; so that the question must be determined by reference to the general principles of law; and here it may be remarked that the difference between courts of law and those of equity is ml1.inly one of forms and remedies, rather than in the matter of absolute rights and obligations. If a contract be pronounced" absolutely void in a court of law, it must expect the same denunciation in a court of equity. Courts of equity, like those of law, must accept contracts as they are made, and have no power to make contracts for parties. If the contracts 'which parties attempt to make are void because in defiance of some statute or common law, they are void alike 'in either court, and neither court can change a void into a valid contract. Now, the contract in this case, in its inception, was on the part of the county a single and indivisible obligation; that is, an attempted donation of$87,000 to the railroad company. The bonds are merely evidences of the contract, the contract standing behind them, and, whatever separate and divisible obligations of the county exist after the issue of the bonds, the contract in the first instance was single and entire. Now that was an attempted donation of $87,000 to the railroad company. Such donation the county had no power to make, and, after it had finished its action, which the promisee, the other party to the contract, could do could give validity v.37F.no.7-20
:.B06 to. the obligation of' the coUnty.. Itw&seither good or bad, del\d or alive, when it left the hands of the promisor. Take this illustration: If, in a ,state where 'usury aVQids the entire contract, a usurious note be given, ,that note is void,.and,no willingness.of the payee, no his, can ,transform that jnvalid .into a valid contract. Of course it would be very ,satisfactory if the promisee, by cODS(3nting to a reduction of the interest, . could give validity to. a void promise, vitality toa dead contract. .so company; could reduce the extent of here, if the. promisee, .the promise, it .doubtless would. be satisfactory, but it would be,thereby making a contract, or attempting to make a contract, different from that :which the. promisor proposed. The that 87 bonds were issued, instead of one, in nOJDanner changes the primary obligation attempted to tbe assumed by the county.· ;. Neither is this a case. where there is an. equity to .compel paymeQt.by the county on the.ground that it has received something, for the bon4s were donated, and no implied promise be based upon the matter of 117 value.received. C01,l08el. cites the ca,se,of l)etvies8 Co. y. U. S. :667, 6 Sup. ·. 897 ,in; which the county having authorI ized the issue of bonds to the amount of $250,000, theqountyofficers ·issued $320,000,; ahd tbe c9untywas heklliable for the first $250,000; but the cases not at all ,In that the principal had proPQsed a ,valid contract. It done tbat whicb it had a right to do, a.nd. the wrong or misconduct of ita the county officers, was held not to ,invalidate that.whioh the county bad lawfuliyauthorized. In this there officers. The agents p.ave is no breach of Jiuty Qha1l!;ed not departed from thekinstructions., T.be trouble lies in the llctionof . the principaJdtself. Jtsaction wJis: unal,lthorized, and, being withqut warrant of law, or rather in defianfjle/411f law, created no valid obligation. , It is unnecessary to add more. Thiscqurtcan make no cO,ntract for the parties. It must ,take the. contract which they made. That contract was ona that the county was not authorized to make. The bonds in a courtofla,w,.yoid in whole and in part, and ,they must be.80 adjudgetl in a·court.ofequity; and, the county having r.eoeived nothing of value, no equitable obHgation can be enforcedaga,il1st it" Tbademurrer will be sllstain,ed, and, the defect being one that pannot .be remediedya decree must be: entered dismissing the bill. . <
:.. OJ'
i
BUliPHREYSt:.ST.,LOPIS, 1.')4'.& S. RY. CO. , I. :,
807
HWPIlRiEYS
et al.
'l1·
M. & .8. R\. Co·
$. D. New York. January 24, 1880.) ··
.
A railroad company, a corporation of Ohio, Indiana, Illinois, r.nd Missouri, whichhaid.: equipped its road under an agreement with a car trust, leased the road and equipments to defendant, a rlloi!roadcompany, which, to induce the c,ar trust to leave theequipments on the'road, agreed to pay the balances un· paid by its les'sor atcertaTn times, in cOhsideration of which paym'ents the car trust, agreed to transfer and assign .all i,is interest to defendant. All the states in the company was except Indiana, provided for the lease o'{ one railroad by another. The laws of Missouri provided that the lease snould not be binding until at a meeting of the stockholders. called for "that purpose, a majority lI.ssented thereto in writing, or until the holders of a majorityof.the stock assentljd thereto in writing, and a certificate, siJ!:ned by the president and secretary, was filed with the secretary of state. No meet· ing was called of defendant's stockholders, but a certificate was filed, sighed bythe'l. president, ,who owned nearIY'aU, of the stock, and the secretary, and the road was operated by defendant withQut any objection from its. lllss0l" Held, in an acti'on' by the car trust on 'its agreement Witjl defendant, that,de· fendanHlould,not plead:ult'l'a 'Dire8 as to the lease. F'R.\UDS"S",A,TUTEOF--AGRE&HENT TO PAY DEBT Oll' ANOTImR.
VIRES. , .
'
S.
The defendant havjng/lbtained the use of the equipments by its agreement to pay (he balance unpaid' by its lessor, the consideration was the use of 'the property and the'right to acqUire title by such {layment, and the contract was a dlrect undertaking, and, nota guaranty, withIn the statute of frauda.· .
At LaW.
george John F.
.... . . " .JameJJ B. Townsenc!,for, plaintiffs. Portia,and Ruah Taggart, for defendaqt.
by thecourtupQn written: jury. The plaintiffs trustees of an by of the" New York & Paci.fic Car Trust Association," forothe purpose of .buying, selling, and leasingraih;oad equipmellt and r,olling .st9ck, ,to, be, fiold. or loosed to com panies owning or operating roads. The, articles of. association provide that the capital stock should be issued in series of certificates representing the property, from time to time, to be classified by letters, and based. qpon successive contracts. for equipment and rolling stock and leases thereof, and for authority in the trustees to <;ontmct with the Wabash, St. Louis & Pacific Railway COlnpany, for the lease to the said companY, and their successors, from time to time, of equipment and rolling stock, a separate lease to be macle of. et\ch series of equipment and rolling might be delivered to tlw trustees of association,upon specified terms .and conditions. Purspa!Jt to this authority, the entered into an agreement with tpeWabash, St. Louis & Pacific Railway Company, a cor" poration of Ohio, Indiana, Illinois, and Missouri,which recited'this authority, and witnessed tbatth,etrustees, as well in considerationofthe sum of one dqllar to them. paid by the said Wp.hash. st. Louis & Pacifio Railway OomPlmy, parties Of,t.he secQnd part, atiund before the sealing and delivery,,thereof, thereceipt,of which acknowledged, as
;WUlllJllLER,J. This cause'has been