Nugent v. the Supervisors
Decision Date | 01 October 1873 |
Citation | 86 U.S. 241,19 Wall. 241,22 L.Ed. 83 |
Parties | NUGENT v. THE SUPERVISORS |
Court | U.S. Supreme Court |
ERROR to the Circuit Court for the Northern District of Illinois; in which court, in December, 1872, Nugent sued the supervisors of Putnam County, Illinois, on coupons for the interest of certain bonds issued by the said county.
The case, as appearing on demurrer to a replication by the plaintiff to several pleas of the defendant, and by admitted statutes, was thus:
A general statute of the State of Illinois, entitled 'An act to enable railroad companies . . . to consolidate their stock,' passed February 28th, 1854, thus enacts:
A similar general statute exists in Indiana.1
This public statute being in force, the State of Illinois, on the 15th of April, 1869, by special act, incorporated the Kankakee and Illinois River Railroad Company. The company was authorized to make and maintain a railroad from the eastern line of the State to a place called Bureau Junction; and had liberty to increase its stock to such an amount as might be necessary to complete its road. The eleventh section of its charter ran thus:
At the same time the county of Putnam was empowered, by a general law of the State, to subscribe for the stock of the company, and to issue its bonds in payment of its subscription. In attempted exercise of the power thus conferred, the board of supervisors of the county, on the 4th day of June, 1869, ordered an election to be held, to determine whether the county should subscribe for stock of the railroad company, to the amount of $75,000, to be paid for with the bonds of the county, provided the railroad should be so located and constructed through, or within one-half mile of, the town of Hennepin. The election was held, and it resulted in favor of the subscription. On the 4th day of January, 1870, another election was ordered, to determine whether the county would subscribe for $25,000 more of the stock, to be paid in the same manner, and with a similar provision respecting the location of the road. This subscription was also sanctioned by the popular vote. On the 24th day of September, 1869, the railroad company accepted the $75,000 subscription, and on the 27th of October next following, gave notice of the acceptance to the board of supervisors of the county. This was put upon record, and on the same day the board of supervisors adopted a resolution that the subscription was thereby made for the building of the railroad, and directed the clerk of the county court to execute and deliver the bonds on behalf of the county. The resolution also declared that the bonds should be issued on the written order of a committee appointed to protect the interests of the county; that they should not be issued until the railroad company should have made a bon a fide contract with responsible parties for all necessary iron for their road, nor until the company should have made a bon a fide contract with responsible parties for laying the iron and operating the road through the county, as specified in a previous order of the board. On the 15th day of March, 1870, the second subscription for $25,000 was made in a similar manner, and with like directions.
The bonds, with the proper number of coupons attached, were executed in proper form by the proper county officers. The bounds were made payable to the Kankakee and Illinois River Railroad Company 'or bearer;' the coupons to the bearer simply.
On the 12th of January, 1870, and before the instruments were delivered to the said railroad company, a company had been organized under the laws of Indiana, for the purpose of building a railroad from Plymouth, Indiana, to the east line of the State of Illinois, at some point to be selected in the direction of Momence and Kankakee, with a view to connection with some railroad leading westward. Its corporate name was the Plymouth, Kankakee, and Pacific Railroad Company. With this corporation, on the 21st day of October, 1870, the Kankakee and Illinois River Railroad Company became consolidated, taking the name of the former. This consolidation was made at the instance of the board of supervisors of Putnam County. It was not asserted that it had not been legally effected. The consolidation being completed, and the conditions precedent to the delivery of the bonds having been complied with to the satisfaction of the officers of the county, the bonds and coupons were delivered to the railroad company, and certificates for a corresponding amount of stock in the consolidated company delivered to and received by the county. The county voted as a stockholder of the railroad company, and proceeded to levy a tax to pay the interest on the bonds.
Certain of the coupons passed into the hands of the plaintiff, Nugent, bon a fide; he having paid value for them, in the market, without notice of any defence.
On these coupons it was that the present suit was brought.
The court below, disregarding an argument made in the case, that the county had made no actual subscription, and that what it had otherwise done wanted such completeness of action as would amount to a 'subscription' in law to anything—sustained nevertheless the demurrer on other grounds. It said:
'I feel compelled to say that I cannot find any line of distinction between this case and Marsh v. Fulton County,2 but it seems to me that that case must control the decision of the court in this.
'Now, the principle of these authorities, it seems to me, is that the corporate existence of the Kankakee and Illinois River Railroad Company ceased on the 21st of October, 1871, and from that time forward whatever franchises it had were merged in the Plymouth, Kankakee and Pacific Railroad Company, the consolidated corporation, and after this event had taken place, after what we may call the legal demise of the Kankakee and Illinois River Railroad Company, the board of supervisors of Putnam County authorized the issue to the consolidated corporation of the bonds in question.
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