County of Moultrie v. Fairfield

• Decision Date: 01 October 1881
• Parties: COUNTY OF MOULTRIE v. FAIRFIELD
• Court: U.S. Supreme Court

105 U.S. 370

105 U.S. 370

26 L.Ed. 945

COUNTY OF MOULTRIE v. FAIRFIELD.

October Term, 1881

ERROR to the Circuit Court of the United States for the Southern District of Illinois.

This action was brought by Fairfield against the county of Moultrie, upon the common counts, for money lent, money had and received, and money due on account stated, with notice that he would give in evidence coupons detached from certain bonds of the county issued in satisfaction of its respective donations in aid of the Bloomington and Ohio River Railroad Company, and the Decatur, Sullivan, and Mattoon Railroad Company. Plea, non assumpsit, under which, by agreement, the county was allowed to offer any evidence and make any defence that would be competent under any special plea well pleaded. The parties submitted the issues of fact as well as of law to the court; and a special finding of facts was made, upon which judgment in his favor was rendered, to reverse which the county brought this writ of error. The material facts are set forth in the opinion of this court.

Mr. John R. Eden for the plaintiff in error.

Mr. Shelby M. Cullom and Mr. E. S. Bailey for the defendant in error.

MR. JUSTICE WOODS delivered the opinion of the court.

We shall first consider the objections raised by the plaintiff in error to the recovery upon the bonds of the county of Moultrie issued to the Decatur, Sullivan, and Mattoon Railroad Company. The charter of this company took effect March 26, 1869. The ninth section provides as follows: 'The several incorporated towns, cities, counties, and towns organized under the township organization law, along or near the route of said road, or that are in any way interested therein, may, in their corporate capacities, subscribe to the stock of said company or make donations thereto to aid in constructing or equipping said railroad.' Then follows a proviso making subscriptions to the stock and donations conditional upon a vote of the people and prescribing the mode of holding elections, &c.

Section 10 declares: 'The board of supervisors of Moultrie County are hereby authorized to subscribe to the capital stock of said company to an amount not exceeding eighty thousand dollars, and to issue the bonds of the county therefor, bearing interest at a rate not exceeding ten per cent per annum, said bonds to be issued in such denominations and to mature at such time as said board of supervisors may determine: Provided that the same shall not be issued until said road shall be opened for traffic between the city of Decatur and the town of Sullivan aforesaid.'

It appears from the records of the board of supervisors, as stated in the findings of the court, that on Nov. 2, 1869, an election was held according to law in the county, at which a majority of the votes cast was in favor of a proposition to donate to the company the sum of $75,000, to be paid in the bonds of the county when the road should be completed and in running order through it; and that, in pursuance of the vote, the board, Dec. 19, 1869, passed an order that there be donated by the county to the company the sum of $75,000 and that when the road should be completed through the county there be issued and delivered to the company the bonds to that amount payable in ten years, in satisfaction of such donation; and that on Nov. 1, 1871, the chairman of the board of supervisors and the clerk of the county issued and delivered to the company seventy-five bonds of $1,000 each in satisfaction of the donation. These bonds recite on their face that they are 'issued by said county of Moultrie by virtue of a vote of a majority of the legal voters of said county voting at an election held in said county of Moultrie on the second day of November, 1869, which election was authorized by, and conditioned according to the provisions of, an act of the General Assembly of the State of Illinois, approved March 26, 1869, entitled an act to incorporate the Decatur, Sullivan, and Mattoon Railroad Company.'

The court further found that Fairfield was a bona fide purchaser for value before maturity of the bonds issued to the company, from which the coupons offered in evidence were detached.

The facts above stated as found by the court, and the authority conferred by the charter of the company to issue the bonds, establish prima facie their validity and the right of Fairfield to recover.

The county insists, however, that there are other facts set forth in the findings which show the invalidity of the bonds. These are that, at the December special term, 1869, of the board of supervisors of Moultrie County, an order was passed that the county subscribe to the capital stock of the company, by authority of sect. 10 of its charter, above recited, the sum of $80,000; that said subscription was then and there made; and that on Dec. 31, 1872, the road being then open for traffic between Decatur and Sullivan, the bonds of the county were issued and delivered to the company in payment of its subscription of stock.

The contention of counsel for the county is that the board of supervisors having, in December, 1869, subscribed to the capital stock of the company the sum of $80,000, by authority of sect. 10 of the charter of the company, it had given all the aid to the railroad company which the law authorized. In other words, it is insisted that the county could not subscribe the full amount of stock authorized by sect. 10, and also make a donation under sect. 9; that it could only do one of these two things. The inference which is drawn from this position is that the bonds issued in satisfaction of the donation, voted for by the people of the county and subscribed by the board of supervisors, were issued without authority, and are, therefore, void.

We cannot, for several reasons, concur in his views. First, it is conceded that the board could either subscribe any sum not exceeding $80,000 to the stock of the company, under sect. 10 of its charter, and issue the bonds of the county in payment thereof, or it could make a donation, under sect. 9 of the charter, of any amount which had been voted for by the voters of the county, and issue the bonds of the county in satisfaction thereof. As the county sets up as matter of defence against the donation bonds issued to the company, the fact that a subscription of stock had also been made, in payment of which the county had issued its bonds, it stands it in hand to show that the obligation of the county to issue bonds in payment of its subscription antedated its obligation to issue bonds to satisfy its donation. This the findings fail to show. They do not show which was first voted by the board, the donation or the subscription. They do show, however, that before any action was taken by the board in reference to either, to wit, on Nov. 2, 1869, the electors of the county had voted in favor of the donation. They further show that the county agreed to issue its bonds in satisfaction of its donation when the company had completed its road through the county, and to issue its bonds in payment of its stock when the railroad should be open for traffic between the city of Decatur and the town of Sullivan; that the road was completed through the county as early as Oct. 20, 1871, and that the donation bonds were issued and bore date Nov. 1, 1871; that the road was not open for traffic between Decatur and Sullivan until Dec. 31, 1872; and that on that day, fourteen months after the issue of the donation bonds, the subscription bonds were executed and issued. If either class of bonds, therefore, has any advantage over the other on the question of authority for their issue, it would seem to be the donation bonds. Secondly, as there was authority for the issue of the donation bonds, which is recited on their face by reference to the law from which it was derived, the purchaser before maturity was not bound to look further. The county having authority to issue bonds like those purchased by him, he was under no obligation to inquire whether the county had issued more bonds than the law authorized. Lynde v. The County, 16 Wall. 6; City of Lexington v. Bulter, 14 id. 282; Marcy v. Township of Oswego, 92 U. S. 637; Humboldt Township v. Long, id. 642. Thirdly, we are clearly of opinion that under sect. 10 of the charter of the company the county might subscribe for stock to an amount not exceeding $80,000 and issue, its bonds in payment thereof, and under sect. 9 of the same charter make a donation to the same company, and issue its bonds in satisfaction thereof.

It is clear, and it is conceded in the brief of plaintiff in error, that the county is included within the terms of sect. 9, which applies to counties along or near the route of the road, or that are in any way interested therein. It is also clear that, independently of the provisions of sect. 10, the county might, upon a vote of the people authorizing it, make a donation of any amount of the company.

Section 10, which authorizes a subscription to the stock within certain limits, and without any vote of the people, does not preclude a donation under sect. 9. The obvious construction of the two sections, taken together, is that any county along the line of the railroad, upon a vote of the...