Supervisors v. Galbraith
| Decision Date | 01 October 1878 |
| Citation | 99 U.S. 214,25 L.Ed. 410 |
| Parties | SUPERVISORS v. GALBRAITH |
| Court | U.S. Supreme Court |
This was an action brought by William B. Galbraith, a citizen of Tennessee, against the board of supervisors of Calhoun County, Mississippi, on certain bonds and coupons thereto attached. The bonds are in the words and figures following, except as to the numbers and amounts, and a copy of one of the coupons is hereto annexed. They differ only as to the time of payment and the reference to the bond to which they are attached.
'Bond No.——.
'Be it known that the county of Calhoun, State of Mississippi, is indebted unto and promises to pay the Grenada, Houston, and Eastern Railroad Company, or bearer, at the agency of said company in the city of New York, two years from the date hereof, five hundred dollars, lawful money of the United States of America, with interest at the rate of eight per cent per annum, payable semiannually on the first day of March and September of each year, on the presentation and surrender of the proper coupon hereto annexed.
'This bond is one of a series of bonds issued and delivered to the Grenada, Houston, and Eastern Railroad Company by Calhoun County, to meet and pay off the amount subscribed by said county to the capital stock of the railroad company aforesaid, in pursuance of an act of the legislature of the State of Mississippi, entitled 'An Act to aid in the construction of the Grenada, Houston, and Eastern Railroad,' approved Feb. 10, 1860, and of an act amendatory thereof, passed March 25, 1871, and in obedience to a vote of the people of said county at an election held in accordance with the provisions of said acts.
'In witness whereof, the board of supervisors of said county have caused the signature of the president of said board to be hereto affixed, countersigned by the clerk, with his official seal affixed, and who have also signed the coupons hereto attached at their office in Pittsboro', this first day of September, 1871.
(Signed) 'JOEL ABNEY,
'Pres't B'd of Supervisors.
'J. S. RYAN, Clerk.'
'The county of Calhoun will pay to the Grenada, Houston, and Eastern Railroad Company, or bearer, four dollars at their agency in the city of New York, on the first day of March, 18__, being six months' interest on bond No. ___.
(Signed) 'JOEL ABNEY,
'Pres't B'd Supervisors.
'J. S. RYAN, Clerk.'
In addition to the plea of nil debet, the defendant filed several special pleas, all of which were demurred to. The demurrers were sustained, and judgment was rendered against the defendants. They then sued out this writ. Their assignment of errors is referred to, and the remaining facts are set forth in the opinion of the court.
Mr. Philip Phillips for the plaintiffs in error.
Mr. Wiley P. Harris, contra.
The question presented for our determination in the case is as to the validity of certain bonds issued and delivered by the board of supervisors of Calhoun County, in the State of Mississippi, in payment for stock of the Grenada, Houston, and Eastern Railroad Company, for which the supervisors subscribed in behalf of the county. In the court below they filed numerous pleas, presenting the points of defence upon which they relied. The pleas were all demurred to, the demurrers were sustained, and judgment was rendered for the plaintiff. Here the assignments of error are not numerous. We shall respond as far as we deem necessary without formally restating them.
The act of Feb. 10, 1860, authorized the subscription, provided a majority of the voters of the county signified their approval. That sanction was given, and the stock was subscribed. The amendatory act of March 25, 1871, declared that when bonds were issued in payment for such stock they should be 'signed by the president of the board of supervisors issuing the same, and be made payable to the president and directors of the Grenada, Houston, and Eastern Railroad Company, and their successors and assigns, and may be assigned, sold, and conveyed with or without guarantee of payment by said president and directors, or may be mortgaged in like manner, at their discretion, as they may deem best for the company.' The bonds here in question bore date Sept. 1, 1871, and were payable to 'the Grenada, Houston, and Eastern Railroad Company, or bearer, at the agency of said company in the city of New York, two years from date.' Each bond was for $500, with interest coupons attached, which matured half-yearly. On their face is this recital:——
'This bond is one of a series of bonds issued and delivered to the Grenada, Houston, and Eastern Railroad Company by Calhoun County, to meet and pay off the amount subscribed by said county to the capital stock of the railroad company aforesaid in pursuance of an act of the legislature of the State of Mississippi, entitled 'An Act to aid in the construction of the Grenada, Houston, and Eastern railroad,' approved Feb. 10, 1860, and of an act amendatory thereof, passed March 25, 1871, and in obedience to a vote of the people of said county at an election held in accordance with the provisions of said acts.'
An objection is made to the form of the bonds. It is said they should have been made payable to the railroad company and 'their successors and assigns,' and not to the company 'or bearer,' and it is insisted that this divergence from the prescribed formula is a fatal defect.
To this there are several answers. The statutory requirement in this particular is only directory. Indianapolis Railroad Co. v. Hurst, 93 U. S. 29; Township of Rock Creek v. Strong, 96 id. 271. The defect is one of form and not of substance. The irregularity was committed by the servants of the county, and the county is estopped to take advantage of it. Bargate v. Shortridge, 5 Clark, H. L. 297. The recital in the bonds of conformity to the statutes is also conclusive. A buyer was not bound to look further. Bigelow, Estoppel, 266; Commissioners of Knox County v. Aspinwall, 21 How. 539; Moran v. The Commissioners, 2 Black, 722. No place of payment of the bonds being designated by the statute, it was competent for the supervisors to make them payable in New York. Meyer v. Muscatine, 1 Wall. 384. The law of the place of performance governed the construction and effect of the contract. Brabston v. Gibson, 9 How. 263; Cook v. Moffat, 5 id. 295. By the law of New York such bonds may be assigned in blank, and any holder can fill the blank with his own name or otherwise. In the mean time, after such assignment in blank, they pass by delivery from hand to hand, and have all the properties of commercial paper. Hubbard v. The New York & Harlem Railroad Co., 36 Barb. (N. Y.) 286. The result is, therefore, the same that it would have been if they had been drawn in literal conformity to the statute.
The requirement of the statute in this particular is evidently the result of inadvertence. It applies to the securities spoken of the language necessary in a deed intended to vest in a corporation a fee-simple title to real estate. They were obviously intended to be made negotiable instruments. Mayor of Vicksburg v. Lombard, 51 Miss. 111.
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