County of Sherman v. Simonds

• Citation: 27 L.Ed. 1093,3 S.Ct. 502,109 U.S. 735
• Parties: COUNTY OF SHERMAN, in the State of Nebraska, v. SIMONDS
• Decision Date: 07 January 1884
• Court: U.S. Supreme Court

109 U.S. 735

3 S.Ct. 502

27 L.Ed. 1093

COUNTY OF SHERMAN, in the State of Nebraska, v. SIMONDS.

January 7, 1884.

This was a suit brought on the coupons of certain bonds issued by the commissioners of Sherman county, in the state of Nebraska, dated January 1, 1876, under an act of the legislature of that state, approved February 18, 1875, entitled 'An act to authorize the commissioners of the counties of Colfax, Platte, Boone, Antelope, Howard, Greeley, and Sherman to issue bonds for the purpose of funding the warrants and orders of said counties.' The act referred to authorizes the commissioners of each of the counties named to issue bonds of the county, and to sell and negotiate the same for money, and declares that the proceeds arising therefrom should be used for the redemption of all warrants and other evidences of indebtedness drawn on the treasurer of the county, which were outstanding at the date of the approval of the act, or might be outstanding prior to the first day of January, 1875. The act contained the following provisos:

'Provided, that no more of the bonds authorized to be issued by virtue of this act shall be issued than is necessary to pay off and redeem such warrants so outstanding; and provided, further, that the said commissioners shall not issue of said bonds to exceed in value the amount of said indebtedness up to January 1, 1875, nor shall said bonds be negotiated at a less price than eighty-five cents on the dollar.'

The bonds recited on their face that they were issued by authority of said act. The answer averred that bonds were issued under said act by the commissioners of said county of Sherman to the amount of $45,000 and that on January 1, 1875, the debts of said county did not exceed the sum of $16,000, and that the said bonds were negotiated for less than 85 cents on the dollar. On this answer the plaintiff below took issue. The parties waived a trial by jury, and submitted the cause to the court, which made findings, from which the following facts appear: On January 1, 1876, the commissioners of Sherman county, in pursuance of the act of February 18, 1875, issued, among others, the bonds and coupons described in the petition, and the same came into the possession of the plaintiff, who was a bona fide purchaser for value, without notice of defects other than appear on the face of the bonds, and was still the holder and owner of said bonds and coupons. The record of the commissioners of Sherman county showed the allowance of $15,000 in claims against the county from the organization of the county to January 1, 1875, for which warrants were drawn on the treasury, and no more, but they also showed that the commissioners at one of their meetings estimated the amount of the county indebtedness which might be funded at the sum of $36,874.95, for which it would be necessary to issue bonds to the amount of $43,400, and that bonds were issued pursuant to such estimate, but it was not shown what the actual indebtedness of the county was at the time the bonds were issued. Upon this finding the circuit court rendered judgment in favor of the plaintiff below for $5,671.60. To reverse that judgment this writ of error is prosecuted.

C. S. Montgomery, for plaintiff in error.

Nathan S. Harwood and John H. Ames, for defendant in error.

WOODS, J.

The plaintiff in error insists that the facts found by the court show an issue of bonds by the county in excess of the amount authorized by the statute, and that they are therefore void. The defendant in error is found by the circuit court to be a bona fide holder for value. According to repeated decisions of this court, being such, he was not bound to go behind the law and the recital of the bonds to inquire into the amount of the county indebtedness. Marcy v. Township of Oswego, 92 U. S. 637; Humboldt Tp. v. Long, Id. 642; Wilson v. Salamanca, 99 U. S. 499. But if it be conceded that a purchaser of the bonds was required to inspect the records of the county to ascertain the amount of its indebtedness, and whether there had its indebtedness, and whether there had been an over-issue of bonds, it appears from the findings of fact that the records of the commissioners contained an estimate of the indebtedness of the county made by them for the express purpose of fixing the amount of bonds to be issued, and in pursuance of which they were issued, which showed that there was no over-issue. This was a decision by the very officers whose duty it was under the law to fix the amount of bonds which could be lawfully issued. A purchaser of bonds was not required to make further inquiry, and if the finding of the commissioners was untrue, he could not be affected by its falsity. See cases above cited; also, Lynde v. The County, 16 Wall. 6; Com'rs v. January, 94 U. S. 202; County of Warren v. Marcy, 97 U. S. 96; Com'rs v. Bolles, 94 U. S. 104; Pana v. Bowler, 107 U. S. 529; [S. C. 2 SUP. CT. REP. 704.]

The next contention of the plaintiffs in error is that the act by which the issue of the bonds in suit was authorized was forbidden by section 1, art. 8, of the constitution of Nebraska, which was in force at the date of the passage of the act. That section declares 'the legislature shall pass no special act conferring corporate powers.'

In the case of Com'rs Jefferson Co. v. People, 5 Neb. 127, decided at the July term, 1876, the supreme court of Nebraska has conclusively settled this point against the plaintiff in error. In that case an act of the legislature, in all material respects similar to the act in question in this case, except that it related to but one county, was brought under consideration. The answer averred that the act was unconstitutional and void. Upon this point the court said:

'That Jefferson county is justly indebted to the relator for the amount of the warrants in question will not be controverted; and when...