County of Henry v. Nicolay

• Decision Date: 01 October 1877
• Citation: 95 U.S. 619,24 L.Ed. 394
• Parties: COUNTY OF HENRY v. NICOLAY
• Court: U.S. Supreme Court

95 U.S. 619

24 L.Ed. 394

COUNTY OF HENRY v. NICOLAY.

October Term, 1877

ERROR to the Circuit Court of the United States for the Western District of Missouri.

This is an action for the recovery of the amount due upon certain coupons annexed to bonds issued by the county of Henry, Missouri. The following is a copy of one of the bonds:——

'HENRY COUNTY BOND.—STATE OF MISSOURI.

'$1,000.

'Interest ten per cent per annum, payable semiannually on the first days of January and July.

'Know all men by these presents, that the county of Henry, in the State of Missouri, acknowledges itself indebted and firmly bound to the Tebo and Neosho Railroad Company, to the use and in the name of the Clin on and Memphis Branch of the Tebo and Neosho Railroad, in the sum of $1,000, which sum the said county hereby promises to pay to the Tebo and Neosho Railroad Company, or bearer, to aid in building said branch railroad, at the National Park Bank, in the city of New York, on the first day of January, 1881, together with interest thereon at the rate of ten per cent per annum, which interest shall be paid semiannually on the first days of July and January of each year, on the presentation and delivery at said bank of the coupons hereto severally subjoined.

'This bond is issued under and in pursuance of an order of the county court of Henry County in the State of Missouri, and in pursuance of and by authority of an act of the General Assembly of the State of Missouri, entitled 'An Act to incorporate the Tebo and Neosho Railroad Company,' approved Jan. 16, 1860, and of an act of the General Assembly of the State of Missouri, entitled 'An Act to aid in the building of branch railroads in the State of Missouri,' approved March 21, A.D. 1868.'

The bond is duly signed, sealed, and attested, and the coupons attached are in the usual form.

The act of incorporation thus mentioned authorizes the company thereby created to 'survey, mark, locate, construct, maintain, and operate a railroad, commencing at a point on the Pacific Railroad, between the west bank of the Lamine River, and Muddy Creek, in Pettis County, by the most direct and practical route, in a southerly or south-westerly direction, through Henry County; thence to some point on the State line, between the north-west corner of Jasper County and the south-east corner of McDonald County, . . . and to extend branch railroads into and through any counties that the directors may deem advisable.'

It declares as applicable to the company certain sections of the act incorporating the Osage Valley and Southern Kansas Railroad Company, approved Nov. 21, 1857, among which is the fourteenth, providing that 'It shall be lawful for the county court of any county in which any part of the route of said railroad or branch may be, or any county adjacent thereto, to subscribe to the stock of the company; and, for the stock subscribed in behalf of the county, may issue bonds of the county to raise the funds to pay the same, and to take proper steps to protect the interest and credit of the county court.'- The following is an act of the General Assembly of Missouri, approved March 21, 1868:——

'SECTION 1. Any railroad company in this State, authorized by law to build branches, and wishing to avail themselves of the provisions of this act, shall, by its board of directors, pass, and cause to be entered upon its records, a resolution setting forth such desire, and designating the name under which such branch shall be built, its point of intersection with its main line, and general course, a certified copy of which resolution shall be filed with the secretary of state, after which they shall be governed by the provisions of this act.

'SECT. 2. Whenever any such railroad company shall undertake the construction of a branch designated, as provided in the first section of this act, they shall receive donations or subscriptions to stock to aid in its construction in the name of such branch, which shall be expressed in the certificate of stock issued; the cost and expenses of constructing and operating such branch shall be kept separate and distinct from expenses on the main line. They may borrow money and issue bonds secured by mortgage on such branch road to aid in its construction, and, in general, may operate, lease, sell, or consolidate with any connecting road, distinct and separate from their main line, and in any other way may manage or dispose of such branch as by law they may be authorized, with reference to their main line, and separate therefrom.

'SECT. 3. Any branch road so constructed shall not be holden for any debt, lien, or liability of the main line, nor shall the main line be holden for any debt, lien, or liability of such branch. ny dividends of profits arising out of the business of such branch road shall be divided among the stockholders in said branch, and in all respects the interest of the stockholders in the branch shall be kept separate and distinct from the interests of the stockholders in the main line.

'SECT. 4. The holders of stock in any railroad company which was subscribed in aid of the construction of a branch road, according to the provisions of this act, shall have the same rights as other stockholders in the company in the choice of officers; but in all matters directly and specially affecting the interests of such branch road the stockholders in such branch shall control, and for such purposes the directors, under their by-laws, may, or on the petition of parties representing one-tenth of such stock shall, call a meeting of the stockholders in such branch, setting forth the object of such meeting; and at any such meeting such stockholders may instruct the board of directors in all matters relating especially to their interests, and they shall be governed by such instructions, if not inconsistent with the laws of the State and the powers of such company.

'SECT. 5. This act shall be in force and take effect from and after its passage.'

The 'Clinton and Memphis Branch of the Tebo and Neosho Railroad' was organized and undertaken with the consent of the directors of the Tebo and Neosho Railroad Company.

On the 4th of August, 1870, the county court of the county of Henry, on 'the application of the Clinton and Memphis Branch of the Tebo and Neosho Railroad for a subscription to the capital stock of said branch road from the county of Henry, to aid in the construction of said branch road,' ordered and adjudged that the said county 'do subscribe for and agree to take one thousand five hundred shares of the capital stock of the Clinton and Memphis Branch of the Tebo and Neosho Railroad, each share being of the denomination of $100, and amounting, in the aggregate, to the sum of $150,000, under and by virtue of the authority in the charter of the Tebo and Neosho Railroad Company...