Ottawa v. National Bank
| Decision Date | 01 October 1881 |
| Citation | 105 U.S. 342,26 L.Ed. 1127 |
| Parties | OTTAWA v. NATIONAL BANK |
| Court | U.S. Supreme Court |
ERROR to the Circuit Court of the United States for the Northern District of Illinois.
The facts are state in the opinion of the court.
Mr. C. B. Lawrence for the plaintiff in error.
Mr. G. S. Eldredge for the defendant in error.
The bonds in suit constitute a portion of the issue of $60,000 referred to in Hackett v. Ottawa, 99 U. S. 86. Like those held by Hackett, they were purchased before maturity, and without notice of any circumstances or facts impeaching their validity.
As in that case, so here, the bonds recite that they are issued in virtue of the power conferred by the charter of the city, upon its council,—the majority of voters, attending at an election for that purpose, assenting,—to borrow money on its credit and to issue bonds, pledging its revenue for the payment thereof; and also, in pursuance of two ordinances of the city council, one, passed June 15, 1869, entitled 'An Ordinance to provide for a loan for municipal purposes,' duly ratified by popular vote, and the other, entitled 'An Ordinance to carry into effect the ordinance of June 15, 1869, entitled, 'An Ordinance to provide for a loan for municipal purposes." The defence in the Hackett case was, that the bonds were not issued to effect a loan for municipal purposes, but were issued and delivered as a donation to one Cushman or to the Ottawa Manufacturing Company, a private corporation, to be used in aid of a merely private enterprise, and not for legitimate municipal purposes. Upon that ground, it was contended that they were void for the want of authority to issue them. Waiving any direct decision of the question, much elaborated by counsel, as to what, under the Constitution of the State, as interpreted by the Supreme Court of Illinois in numerous cases, is to be regarded as a municipal or corporate purpose, for which the city can lawfully exercise the power of borrowing money and issuing bonds, we there adjudged the defence to be insufficient, for these reason: The city council had power, the voters consenting, to issue negotiable securities for certain municipal purposes; if the purchaser, under some circumstances, would have been bound to take notice of the provisions of the ordinances whose titles were recited in the bonds, he was relieved from any responsibility or duty in that regard by reason of the representation, upon the face of the bonds, that the ordinances provided for a loan for municipal purposes; such a representation, by the constituted authorities of the city, would naturally avert suspicion of bad faith upon their part, and induce purchasers to omit an examination of the ordinances themselves; and, consequently, the city was estopped, as against a bona fide holder for value, to say that the bonds were not issued for legitimate or proper municipal or corporate purposes. Upon these grounds, the main defence in this suit must, also, be adjudged insufficient.
There is, however, one question raised in this case which was not made or determined in Hackett v. Ottawa. The bonds in suit are made payable at the St. Nicholas National Bank in the city of New York to W. H. W. Cushman or bearer, and, without his written assignment or indorsement, were taken by the First National Bank of Portsmouth, New Hampshire, the defendant in error. The city paid the interest maturing on the second days of August, 1870 and 1871.
The contention of counsel is that an assignment or indorsement of the bonds by the payee named therein, although they are also made payable to bearer, is, by the laws of Illinois, where the original contract was made, a prerequisite to pass the legal title, and to authorize a suit by the holder in his own name. This precise question arose in Roberts v. Bolles (101 U. S. 119), involving the validity of certain municipal bonds, payable to a railroad company or bearer, and on which there appeared no assignment or indorsement by the company. Upon examination of the decisions of the Supreme Court of Illinois, we there reached the conclusion that, by the repeated adjudications of the learned tribunal, municipal bonds payable to bearer, or to some named person or bearer, were excepted from the rule announced in Hilborn v. Artus (4 Ill. 344) and Roosa v. Crist (17 id. 450), in which it was, in effect, held that notes payable to a person or bearer could not be transferred or assigned by delivery only, so as to authorize the holder to sue in his own name.
Counsel in the present case insist that our ruling in Roberts...
To continue reading
Request your trial
-
Independent School Dist. of Sioux City v. Rew
... ... have done so or not. Lyon Co. v. Keene Five Cent Sav ... Bank, 100 F. 337, 338, 40 C.C.A. 391, 392; Newgass ... v. City of New Orleans (C.C.) 33 F. 196; ... his action upon them in the national courts ... In this ... state of the case, counsel for the plaintiff in error contend ... 26 P. 281; Moran v. Commissioners, 2 Black, 722, 17 ... L.Ed. 342; Hackett v. City of Ottawa, 99 U.S. 86, ... 96, 25 L.Ed. 363; City of Ottawa v. First Nat. Bank of ... Portsmouth, 105 ... ...
-
City of Huron v. Second Ward Sav. Bank, 980.
...60 F. 55, 66; Meyer v. Brown, 65 Cal. 583, 26 P. 281; Moran v. Commissioners, 2 Black, 722; Hackett v. Ottawa, 99 U.S. 86, 96; Ottawa v. Bank, 105 U.S. 342, 343. fact that a municipal corporation has diverted the proceeds of its negotiable securities from the lawful purpose for which they a......
-
National Life Ins. Co. of Montpelier v. Board of Education of City of Huron
... ... dollars, lawful money of the United States, at the office ... of the Chase National Bank, New York City, with interest ... thereon at the rate of six per cent, per annum, payable ... semiannually according to the tenor and effect of the ... money for a school site and school building. Moran v ... Commissioners, 2 Black, 722; Hackett v. Ottawa, ... 99 U.S. 86, 90; Ottawa v. National Bank, 105 U.S ... 342, 345; Zabriskie v. Railroad Co., 23 How. 381; ... Omaha Bridge Cases, 10 ... ...
-
Fairfield v. Rural Independent School Dist. of Allison
... ... answered in the affirmative. National Bank of Commerce v ... Town of Granada, 54 F. 100, 4 C.C.A. 212; Hinkley v ... City of Arkansas ... v. National Life Ins. Co., ... 32 C.C.A. 591, 594, 90 F. 228, 231; Hackett v. City of ... Ottawa, 99 U.S. 86, 95, 25 L.Ed. 363; Town of ... Evansville v. Dennett, 161 U.S. 434, 439, 16 Sup.Ct ... ...
-
The Municipal Bond Cases Revisited.
...loses), with Hackett v. Ottawa, 99 U.S. 86 (1878) (good-faith purchaser wins judgment on bonds from same issuance); Ottawa v. Nat'l Bank, 105 U.S. 342 (1881) (105) See, e.g., Town of S. Ottawa v. Perkins, 94 U.S. 260 (1876) ("There can be no estoppel in the way of ascertaining the existence......