Coler v. City of Cleburne

• Citation: 9 S.Ct. 720,33 L.Ed. 146,131 U.S. 162
• Parties: COLER v. CITY OF CLEBURNE
• Decision Date: 13 May 1889
• Court: United States Supreme Court

131 U.S. 162

9 S.Ct. 720

33 L.Ed. 146

COLER v. CITY OF CLEBURNE.

May 13, 1889

This is an action at law brought in the circuit court of the United States for the Northern district of Texas, by W. N. Coler, Jr., against the city of Cleburne, a municipal corporation of Texas, to recover on 234 coupons, of $35 each, amounting to $8,190, cut from a series o 51 bonds, of $1,000 each, purporting to have been executed and issued by that corporation. The case was tried by the court, on the written waiver of a jury, and, having heard the evidence, it adjudged that the plaintiff take nothing by his suit, and that the defendant go without day, and recover its costs. The plaintiff has brought a writ of error. There is no special finding of facts, but there is a bill of exceptions, which, after setting forth what was proved, states that the court, on the pleadings and proof, found the law for the defendant, and rendered final judgment for it and against the plaintiff for costs of suit. This is a sufficient special finding of facts to authorize us, under section 700 of the Revised Statutes, to determine whether the facts found are sufficient to support the judgment. The plaintiff, in his petition and four supplemental petitions, alleged that he was the bona fide owner, holder, and bearer, before maturity, of the coupons, for a valuable consideration paid; that the bonds were issued by the city for the purpose of erecting a system of water-works; and that the bonds and coupons were made and issued in pursuance of article 420 of the Revised Statutes of the state of Texas, and of an ordinance adopted by the city council of the defendant, September 13, 1883. The defendant, with other pleas, interposed one, called in the record a plea of non est factum, which says that the bonds and coupons in question are not the obligations of the defendant, and were never executed and delivered by it, because they never had any existence prior to July 3, 1884; that they were never signed by J. M. Odell, (who had, on the the first Tuesday in April, 1884, been duly elected to the office of mayor of said city for a term of two years, and was on the 3d of July, 1884, the legally qualified and acting mayor of the city,) or by his authority, or by any person authorized by law to act as mayor of the city; that said mayor at all times refused to sign the same; that, although said bonds and coupons purport, on their face to have been executed on January 1, 1884, and to be signed by the mayor of the city, they were in fact made on the 3d of July, 1884, and antedated, and signed by one W. N. Hodge, a private citizen, but formerly mayor of the city, whose term of office had expired in April, 1884; that any registration of the bonds in the office of the comptroller of public accounts of the state of Texas was illegal and without authority, because they were never forwarded to the comptroller by the mayor, Odell, or by any person authorized by him to do so, and he never forwarded to the comptroller his certificate showing the values of taxable property, real and personal, in said city for the year 1884, and never authorized any person so to do; and that said bonds and coupons were never delivered by said mayor, or by his authority, or by any person authorized to act as mayor of the city, to the Texas Water & Gas Company, or to any other person or persons. The plaintiff filed a demurrer to the above plea, as insufficient in law. The bill of exceptions states that this demurrer was considered by the court in its general finding.

The bonds and coupons, which were put in evidence, were in the following form:

'1,000. 1,000.

'UNITED STATES OF AMERICA.

'No. 51. $1,000.

'The city of Cleburne, in Johnson county, state of Texas, hereby acknowledges that, for value received, it is indebted and bound, and hereby promises to pay, unto the Texas Water and Gas Company, or bearer, at the _____, in the city of New York, at the expiration of twenty years from the date hereof, the sum of one thousand dollars in lawful money of the United States of America, and also that it is bound and will pay interest on said sum of one thousand dollars, at the rate of seven per centum per annum, on the first days of January and July of each year thereafter, to and including the first day of January, A. D. 1904, to the bearer, according to the rese ctive coupons therefor hereto attached, for thirty-five dollars each, signed by the mayor of the city of Cleburne and attested by the secretary of the city of Cleburne, upon presentation at the fiscal agency in New York. This bond is authorized by article 420 of the Revised Statutes of the state of Texas, and by an ordinance adopted by the board of aldermen of the city of Cleburne, on the 13th day of Sept., 1883, in conformity to said article 420.

This bond is one of a series of fifty-one of like tenor and effect, issued for the erection of a complete system of waterworks, and is secured by an ordinance of the city of Cleburne under the general laws of the state, and setting apart all the net revenues of said water-works to pay the interest and sinking fund upon the same, and requiring the council to annually levy and collect a tax of thirty-five cents on the one hundred dollars' worth of property, if so much shall be required, to pay the interest and two per cent. sinking fund. It is understood that the city of Cleburne shall have the right to call in any or all the bonds of this series, numbered from one to fifty-one, respectively, at any time after ten years from the date of said bonds, upon first giving public notice thereof in the city organ of the city of Cleburne, for three months before the first days of January or July in any year, and interest shall cease from the time they are so called in, respectively. In witness whereof the mayor of the city of Cleburne hereto signs his name, and the city secretary of the city of Cleburne attests with the seal of the said city of Cleburne, hereto affixed, this the first day of January, A. D. 1884.

[L. S.]

'W. N. HODGE, Mayor.

'Attest: W. H. GRAVES, Secretary.

'1,000.'

The bond is indorsed as follows:

'51. $1,000 city of Cleburne water-works bond. Interest seven per cent., payable July 1st and January 1st of each year. Twenty years' bond. Registered July 12th, 1884. WM. J. SWAIN, Comptroller.

'$35.00. $35.00.

'On the first day of July, 1886, the city of Cleburne, state of Texas, will pay to bearer, in the city of New York, thirty-five dollars, being six months' interest on water-works bond No. 51.

'W. N. HODGE, Mayor.

'W. H. GRAVES, Secretary.'

The plaintiff proved that the Texas Water & Gas Company, a corporation, through its proper officers, made a written contract with the city, through its proper officers, on September 13, 1883, to erect for it a complete system of water-works, the material used and the manner of building being fully shown in specifications and plains, on or before June 1, 1884, in consideration for which the city agreed to pay the builder $51,000, in bonds of $1,000 each, payable to bearer 20 years after January 1, 1884, bearing interest at 7 per cent., represented by semi-annual coupons for $35 each attached thereto, the same to be engraved, signed by its mayor and secretary, and delivered to the Texas Water & Gas Company upon the completion of said system of water-works according to plans and specifications, and the acceptance thereof by the city after the same had been duly tested. It was further proved that said contract provided that, upon the works having been tested and the same reported and received by the city, the builder should be discharged from all further obligations on account of the works. It was further proved that the system of water-works was built within the time agreed upon, and accepted by the city; and that, on the 13th of September, 1883, the city council adopted an ordinance fully authorizing the contract above mentioned, a copy of which ordinance is given in the margin.¹ It was also proved that, after the defendant accepted the water-works, and on July 3, 1884, the 51 bonds for $51,000 were delivered to the Texas Water & Gas Company, and registered by the comptroller of the state; that the defendant, before the delivery of said bonds, cut off and canceled the first coupon thero n, maturing July 1, 1884; that it took charge of the works and contracted a sale of them to another corporation, which corporation operated them for a time; that afterwards the defendant resumed the control of them, and still has possession of them and uses them for fire protection and other uses; that the Texas Water & Gas Company sold all of the bonds and coupons, and delivered them to third parties soon after they were received; that the defendant, by its city council, on July 3, 1884, adopted a resolution authorizing and requesting Ex-Mayor W. N. Hodge, whose name had been engraved on the coupons attached to the 51 bonds, to sign the bonds as and upon the date January 1, 1884, when he was actually the mayor of the city, and that said bonds be signed by W. H. Graves, who was the secretary of the defendant on January 1, 1884, as well as on July 3, 1884. The defendant proved that W. N. Hodge, who signed the bonds, ceased to be mayor in April, 1884; that Odell became then the mayor; that the bonds were signed July 3, 1884; and that the city council authorized Hodge, who was then a private citizen, to sign the bonds on that day. It was also proved that Mayor Odell did not furnish a statement of the valuation of property to the comptroller, nor forward to him the 51 bonds for registration, and refused to sign more than 40 of said bonds; and that the defendant was using and operating the water-works, and had been for over 20 months.

Articles 420 to 424 of the Revised Statutes of Texas, in

force at the time of the issue of these bonds, (Rev. St. 1879, tit. 17, c. 4, p. 72,) were as follows: 'Art. 420.' The city council shall have power 'to appropriate so...