County of Ralls v. Douglass

• Decision Date: 01 October 1881
• Citation: 105 U.S. 728,26 L.Ed. 957
• Parties: COUNTY OF RALLS v. DOUGLASS
• Court: U.S. Supreme Court

105 U.S. 728

105 U.S. 728

26 L.Ed. 957

COUNTY OF RALLS v. DOUGLASS.

October Term, 1881

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

This suit was brought by Joseph M. Douglass against the County of Ralls, to recover the amount due upon certain interest coupons detached from bonds issued by the defendant in payment of its subscription to the capital stock of the St. Louis and Keokuk Railroad Company, which was incorporated by an act of the General Assembly of Missouri approved Feb. 16, 1857.

The section of the act under which the county claimed the right to subscribe is set forth in the opinion of this court in the following case, p. 733.

The bonds are sealed with the seal of the county court, tested by the clerk, and countersigned by the agent of the county. Those bearing date Feb. 10, 1870, recite that they are issued under the authority of said act, and in pursuance of an order of the county court of Feb. 8, 1870, to subscribe $200,000 to the capital stock of that company. Those bearing date June 13, 1871, differ in their recitals from the others, in stating that they are issued in pursuance of that order and of an order amendatory thereof dated June 13, 1871.

A demurrer was sustained to several of the defences set up in the answer. Upon the issues of fact the jury rendered a verdict for the plaintiff, and, judgment having been rendered thereon, the county brought this writ of error. The questions arising upon the demurrer and during the trial are stated in the opinion of the court.

Mr. Henry A. Cunningham for the plaintiff in error.

Mr. John H. Overall for the defendant in error.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

If we understand correctly the questions presented in this case, they are——

1. Whether, if county bonds are issued in Missouri by a de facto county court, and are sealed with the seal of the court and signed by the de facto president, they can be impeached in the hands of an innocent holder by showing that the acting president was not de jure one of the justices of the court.

2. Whether it can be shown as a defence to bonds issued by counties in Missouri in payment of subscriptions to the capital stock of a company, and in the hands of innocent holders, that the company to whose stock the subscription was made was not organized within the time limited by its charter.

3. Whether bonds issued by counties in Missouri during the years 1870 and 1871, in payment of subscriptions to the stock of railroad companies, without a vote of the people, are invalid if the subscription was made under authority of charters granted in 1857, which did not require such a vote to be taken.

4. Whether county bonds and coupons issued in the years 1870 and 1871, in payment of subscriptions to railroad companies, were admissible in evidence on the trial of an action against the county for the recovery of the amount due thereon, if not stamped as obligations for the payment of money under the provisions of the internal revenue laws of the United States in force at the time of their issue.

5. Whether in this suit it was necessary to prove the order of the county court authorizing the president of the court to sign and the agent to countersign the bonds, there being no plea or answer sworn to denying the execution of the bonds or coupons sued on.

6. Whether testimony was admissible to prove that the plaintiff was a bona fide holder and owner of the coupons sued on, there being no averment in the petition to that effect.

There are other questions presented by the assignments of error, but they are not alluded to in the argument, and we do not deem them of sufficient importance to require attention.

1. As to the competency of the court.

In no State is it more authoritatively settled than in Missouri that 'the acts of an officer de facto (although his title may be bad) are valid, so far as they concern the public or the rights of third persons who have an interest in the things done.' In State v. Douglass (50 Mo. 593, 596), the Supreme Court of that State said: 'Without this rule the business of a community could not be transacted. The public are necessarily compelled to do business with an officer who is exercising the duties and privileges of an office under color of right, strangers should be void would stranges should be void would be productive of irreparable mischief. It would cause a suspension of business till every officer's right de jure was established.' To the same effect is Harbaugh v. Winsor, 38 id. 327. This is conclusive. The question here is not whether Dimmick was de jure probate judge of Ralls County, but whether he was acting under color of right as a justice and president of the county court. That is averred in the petition and not denied in the answer. His right to the office is one thing; his action while exercising the duties of the office, another.

2. As to the organization of the company.

Both this court and the Supreme Court of Missouri have held over and over again that such a defence as was here set up cannot be maintained. Hale Bank v. Merchants' Bank of Baltimore, 10 id. 123; Kayser v. Trustees of Bremen, 16 id. 88; Smith v. County of Clark, 54 id. 58; City of St. Louis v. Shields, 62 id. 247; County of Macon v. Shores, 97 U.S. 272.

3. As to the vote of the people.

The Supreme Court of Missouri has many times decided, and this court, following such decisions, has always held, that the provision in the State Constitution of 1865, art. 11, sect. 14, prohibiting a county from becoming a stockholder in or loaning its credit to a corporation without a vote of the people, was intended as a limitation on future legislation only, and did not operate to repeal enabling acts in existence when h e Constitution took effect. State v.Macon County Court, 41 Mo. 453; Kansas City, &c. Railroad Co. v. Alderman, 47 id. 349; State v. County Court of Sullivan County, 51 id. 522, dicided in 1873, in which it was said, 'it has always been held that the provision of the Constitution, art. 11, sect. 14, was a limitation upon the future power of the legislature, and was not intended to retroact so as to have any controlling application to laws in existence when the Constitution was adopted;' State v. Greene County, 54 id. 540; County of Callaway v. Foster, 93 U. S. 567; County of Scotland v. Thomas, 94 id. 682; County of Henry v. Nicolay, 95 id. 619; County of Cass v. Gillett, 100 id. 585. When all...