Packard v. City of Mobile , 151 Ala. 159 ( 1907 )

McCLELLAN, C. j.

The overruling of complainant’s exceptions to the answer and plea Of the respondents are the errors assigned. The assignments rested - upon the court’s action on exceptions to- the answer cannot.be considered: — Cleveland v. Insurance Co., 151. Ala. 44 South. 37.

The bond,'the collection of which is sought by the bill, is of an issue authorized,-as announced on its face, by act- of the General Assembly approved December 8, 1880. Acts 1880-81, p. 329. The amendment thereof at that session does not appear to have altered section 9 of the act, the1 section important for this occasion. The section is set forth -in paragraph 2 of the answer, and is also adopted-as a-paft'of-the-plea in bar .to- a recovery above the-sum' stated in the incorporated plea. After providing the method for drawing the bonds to- be satisfied out of the -surplus accumulated as stated, section ■ 9 declares : a* *- * And said drawn bonds, with one month’s interest thereon, at the then -current rate of interest on such bonds, sfiall become due and payable on the first day of February next following after such drawing, and said. bonds' with said interest for one month shall be paid in full by'said bank of depository upon their presentation, with all their future coupons attached, and upon delivery of the same at the place designated in such advertisement. After said first day of February said drawn bonds shall cease to bear interest, and the coupons thereon shall become void.” The bond in question was so drawn in January, 1901, but was not, Avith the “future coupons attached,” presented for payment. The “future coupons” were detached, and. periodically presented and paid. It is the aggregate sum of such payments that the city and trustee, by their answer and plea, seek to have deducted from the amount recoverable on this bond, as Avell as exoneration from payment of interest since Feb-. ruary 1, 1901. The exceptions go to the point that the payments were voluntary, with knoAvledge of the fact, and, under the general rule, are not recoverable nor the subject of set-off.

The purchaser of municipal bonds takes them, univer sally, subject to the conditions and limitations set down in the enabling act. — Simonton on Municipal Bonds, § 150; Town, of Brewton v. Spira, 106 Ala. 229, 17 South. 606; Mayor, etc. of Wetumpka v. Wharf Co., 63 Ala. 611. Of course, these conditions and limitations are not those the non-observance of which are but irregularities in the issuance of the bonds. The purchaser of this bond took the same subject to the statute-imposed right to. mature it on the February 1st succeeding its drawal, and subject to the provision that the “future coupons” representing interest thereon, should be absolutely void — that that bond should not bear interest after the time stipulated. These provisions are a part of the bond, and, as such, limit the liability of the city as well as forbade a con-, trary right in the bondholder. Any other construction would, in effect, annul the statute — the law — in that respect ; and such a result cannot he sanctioned. So this alleged bondholder, in the reception of the payments induced by the presentation of the condemned “future coupons,” occupies the attitude of one who has been the recipient of misappropriated funds, in plain violation of the law in the premises. Can he, then, urge that such payments were so voluntary as not to be recoverable? We are clearly of opinion that he cannot. To so conclude w'ould, by direct announcement, approve the violation of a statutory provision, to say nothing of the equity involved, to which we will later advert. It would commit the instruments of the law itself — the courts — to an indorsement of acts plainly inhibited by a statute. This would be, and is, against public policy. Hence we hold that such payments were not voluntary, regardless of whether the agents in the transaction knew the facts or that the payments made were illegal.

The complainant, as a pure matter of equity, cannot be heard to dispute the right of the respondents to have the benefit of the set-off sought in diminution of the amount to be recovered. The payments were, as above stated, illegally made and illegally received by the holder. ITe must be, and is, held to the same legal consciousness of illegality as the city’s agents. Hence he is without the pale of those who- may, on occasion, assert their innocence of wrong in the premises; and, under these conditions, to sustain, his contention against the reduction of his recovery on the bond would deny proper application to the two maxims of equity. He who seeks equity must do equity, and he who invokes equity must be of clean hands. If he were justified in a denial of the set-off, he would be the beneficiary of funds for which no consideration had been furnished, and, therefore, in all good conscience, to which he is not entitled.

The appellant urges the loss of interest from Janaury 1,1906, if the set-off is upheld. The section quoted above requires the presentation for payment of the drawn and advertised bonds. His negligence, his want of diligence, in respect of the presentation requisite, is a sfifficient answer to this complaint. Rut a greater reason in denial of this contention is found in the act itself, which declares that after the February 1st succeeding the drawal of the bonds they shall not bear interest.

The averment relative to tender is sufficient. The refusal to accept the money, if actually tendered, rendered unnecessary the production of the sum offered to be paid The general rule has been announced in these adjudications: Insurance Co. v. Lesser, 126 Ala. 568, 28 South. 646; Root v. Johnson, 99 Ala. 90, 10 South. 293.

The decree is without error, and is therefore affirmed.

Affirmed.

Tyson, S. J., and Dowdell and Anderson, concur.