142 U.S. 355 (1892), Board of Com'rs of Chaffee County v. Potter

Citation:142 U.S. 355, 12 S.Ct. 216, 35 L.Ed. 1040
Party Name:BOARD COUNTY COM'RS OR CHAFFEE COUNTY v. POTTER.
Case Date:January 04, 1892
Court:United States Supreme Court
 
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Page 355

142 U.S. 355 (1892)

12 S.Ct. 216, 35 L.Ed. 1040

BOARD COUNTY COM'RS OR CHAFFEE COUNTY

v.

POTTER.

United States Supreme Court.

January 4, 1892

COUNSEL

[12 S.Ct. 216] Thomas Macon, for plaintiff in error.

Page 356

Willard Teller, for defendant in crror.

OPINION

Mr. Justice LAMAR delivered the opinion of the court.

This was an action by Andrew Potter, a citizen of Massachusetts, against the board of county commissioners of Chaffee county, Colo., on a large number of interest-bearing coupons attached to certain [12 S.Ct. 217] bonds issued by that county, in 1882, for the purpose of funding its floating indebtedness.

The following is a copy of one of the bonds and coupons:

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'No. ---. $1,000. United States of America, County of Chaffee, State of Colorado. Funding Bond. (Series A.) The county of Chaffee, in the state of Colorado, acknowledges itself indebted and promises to pay to ----- or bearer one thousand dollars, lawful money of the United States, for value received, redeemable at the pleasure of said county after ten years, and absolutely due and payable twenty years from the date hereof, at the office of the treasurer of said county, in the town of Buena Vista, with interest thereon at the rate of eight per cent. per annum, payable semi-annually on the first day of March and the first day of September in each year, at the office of the county treasurer aforesaid, or at the banking-house of Kountz Brothers, in the city of New York, at the option of the holder, upon the presentation and surrender of the annexed coupons as they severally become due. This bond is issued by the board of county commissioners of said Chaffee county, in exchange at par for valid floating indebtedness of the said county, outstanding prior to August 31, 1882, under and by virtue of, and in full conformity with, the provisions of an act of the general assembly of the state of Colorado entitled 'An act to enable the several counties of the state to fund their floating indebtedness,' approved February 21, 1881, and it is hereby certified that all the requirements of law have been fully complied with by the proper officers in the issuing of this bond. It is further certified that the total amount of this issue does not exceed the limit prescribed by the constitution of the state of Colorado, and that this issue of bonds has been authorized by a vote of a majority of the dulyqualified electors of the said county of Chaffee voting on the question at a general election duly held in said county on the seventh day of November, A. D. 1882. The bonds of this issue are comprised in three series, designated 'A,' 'B,' and 'C,' respectively; the bonds of series A

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being for the sum of one thousand dollars each, those of series B for the sum of five hundred dollars each, and those of series C for the sum of one hundred dollars each. This bond is one of series A. The faith and credit of the county of Chaffee are hereby pledged for the punctual payment of the principal and interest of this bond. In testimony whereof the board of county commissioners of the said county of Chaffee have caused this bond to be signed by their chairman, countersigned by the county treasurer, and attested by the county clerk under the seal of the county, this first day of December, A. D. 1882. -----, Chairman Board of County Commissioners. Attest: -----, County Clerk, [County Seal.] Countersigned: -----, County Treasurer.'

'$-----. (Coupon.) $-----.

'The county of Chaffee, in the state of Colorado, will pay the bearer ----- dollars at the office of the county treasurer, in the town of Buena Vista, or at the banking-house of Kountz Brothers, in the city of New York, on the first day of ---, being six months' interest on funding bond. No. ---, Series ---. E. B. JONES, County Treasurer.'

The plaintiff, as the holder of a large number of the coupons of each series, alleged in his declaration that all the proceedings required by the statutes of the state to be taken in the matter of the issue and registration of the bonds had been taken before the bonds were put on the market, that the bonds were therefore legal in all respects as valid obligations of the county, and that, as the bona fide holder for value of the interest coupons, he had presented them for payment at the place required, and payment had been refused. Wherefore he prayed judgment for the amount of said coupons, with interest; in all, $9,648.

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The defenses set up in the answer were that the bonds had not been authorized by a vote of the qualified voters of the county, and no bonds had been authorized to be exchanged for the warrants of the county, and the board, therefore, never had any jurisdiction to issue them; that the bonds, and each of them, were issued in violation of section 6, art. 11, of the constitution of the state, and the debt which they assumed to fund was contracted in violation of said provision of the constitution; and that the bonds were issued by the board of county commissioners without any consideration valid in law, as plaintiff well knew when he received the coupons sued on.

A demurrer to the answer, on the ground that it was not a sufficient defense to the action, was sustained by the circuit court, and, the defendants electing...

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