Pacific Imp. Co. v. City of Clarksdale

• Decision Date: 17 February 1896
• Docket Number: 412.
• Citation: 74 F. 528
• Parties: PACIFIC IMP. CO. v. CITY OF CLARKSDALE.
• Court: U.S. Court of Appeals — Fifth Circuit

74 F. 528

PACIFIC IMP. CO. v. CITY OF CLARKSDALE.

No. 412.

United States Court of Appeals, Fifth Circuit.

February 17, 1896

Holmes Cummins and D. A. Scott, for plaintiff in error.

J. W Cutrer and J. L. Alcorn, for defendant in error.

Before PARDEE and McCORMICK, Circuit Judges, and BOARMAN, District judge.

BOARMAN District Judge.

This suit was instituted in the circuit court for the Northern district of Mississippi by the Pacific Improvement Company against the municipality of the city of Clarksdale, to recover on 43 past-due coupons issued by the defendant corporation, January, 1891, each for the sum of $60. Plaintiff alleges that such coupons were issued to secure the interest to become due on certain 15 (part of an issue of 25 bonds, of $1,000 each) bonds, of $1,000 each, issued by the defendant, under the authority of the act of the state of Mississippi, of February 15, 1882, entitled 'An act to authorize counties, cities and towns to subscribe to the capital stock of railroads,' approved Mary 7, 1882; that the plaintiff purchased the said 15 bonds, numbered from 11 to 25, inclusive, with coupons attached, in due course of trade. The evidence attached to the bills of exception seems to be all the testimony administered by either side on the trial, and it shows substantially that on the 25th day of February, 1882, the legislature of Mississippi passed an act empowering the several cities and corporate towns of the state to subscribe to the capital stock of railroad companies, payable in negotiable coupon bonds of the city or town so subscribing, on the approval of two-thirds of the qualified voters of the corporation. Under the authority of that act the town of Clarksdale on the 30th day of October 1889, adopted an ordinance providing for the subscription by the said town of $25,000 to the stock of the L. & N. Ry. Co. payable in 25 negotiable coupon bonds, of $1,000 each, of the said town, running 20 years, with 6 per cent, interest; and the said ordinance, having been submitted on the 25th of November, 1889, was approved and ratified by the voters of the said town of Clarksdale, the vote thereof being unanimous. By the terms of said ordinance, it was stipulated that no payment was to be made, or the bonds to be issued, until the branch road had been constructed beyond the county line. That there was no stipulation as to any fixed time in which the said railway work was to be completed, and that said railway was completed about September, 1899. That in the meantime, on February 13, 1890, the legislature passed an act repealing the act of February 25, 1882, incorporating the town of Clarksdale, and then, a few days later, passed another act, incorporating the defendant the city of Clarksdale, in which is included, so far as we are advised by the record, substantially, the same territory and people that were included in the old town of Clarksdale. After the completion of the said railroad, some time in the latter part of 1890, the defendant the city of Clarksdale, as successor to the town of Clarksdale, prepared and executed 25 bonds, of $1,000 each, payable at 20 years from date, with coupons attached, with a yearly interest of 6 per cent. And in pursuance of an ordinance passed by the city of Clarksdale the said bonds, etc., were placed in the hands of the Clarksdale Bank & Trust Company, and they were to be delivered to the railway company upon the delivery to the bank of said certificates of stock for the like amount of shares of said railway stock. These deliveries were accomplished on the 13th of May, 1891. The defendant, under its plea of the general issue, set up a number of special matters, an analysis of which seems to show substantially the following grounds of defense: That the act of 1882, under which the election to authorize the issuance of the bonds in controversy purports to have been held, is unconstitutional, in the fact that it provided for and set up unreasonable regulations with reference to the registration of voters in said town; that the act was not uniform and impartial, and directly denied and abridged the constitutional right of the qualified electors of the town; 'that the subscription originally proposed or made, if any such was ever authorized, was conditional only, and the subscription provided for by the Louisville, New Orleans & Texas Railway Company was never accepted;' that in that state of case, before the performance of the condition precedent upon which only could the subscription become binding, the constitution of Mississippi of 1890 was adopted, which deprived all municipalities of the right to subscribe to the capital stock of railway companies, and before that time, also, the charter of the municipality under which the election had been held was repealed, and the bonds, to which were attached the coupons in controversy, were issued by a new municipality, to wit, the city of Clarksdale, subsequently created by the legislature of Mississippi, and which latter municipality had no authority to issue the bonds referred to; that 'conceding the subscription was not conditional, and the obligation to subscribe and pay for the stock attached coincident with the determination of the result of the election held by the town of Clarksdale, the bonds issued by the defendant are void, notwithstanding, for want of legislative authority'; that the original ordinance of the town of Clarksdale required the city secretary to affix the corporate seal to said bonds, while in fact the seal of said corporation was not impressed upon the said bonds by said secretary, nor by any one authorized to do so.

After all the evidence was in, the court below directed the jury to find for the defendant. The several assignments of error presented by defendant in error are all based on the error of the court below in so directing the verdict, and they allege, substantially, that there was error therein because the proof in this case shows that the town of Clarksdale, the immediate predecessor of the defendant corporation, was fully authorized, in law, to enter into the subscription contract with the railway company, and to obligate itself to pay the amount so subscribed, in negotiable bonds, according to said contract; that when the town of Clarksdale was dissolved the debt incurred by such said subscription, and the obligation to issue such bonds therefor, remained undischarged, and that there was, in law, a valid obligation resting on the constituency of the dissolved municipality to discharge the same; that, when the legislature incorporated the said constituency into the said the city of Clarksdale, the law itself imposed such said obligation on the new municipality; that the work of the railway company having been contracted for by the town of Clarksdale during the life of that corporation, and the same having been completed after the creation of its successor, the city of Clarksdale, the defendant, in recognition of its right and duty, under the provisions of the constitution of 1890, to meet and discharge such lawful obligations of the dissolved town of Clarksdale, as were imposed on it by law, issued the said bonds lawfully now sued on.

The act of 1882, under which the election authorizing the said subscription was held, provides for a new registration to be had, on the day of the election, of all the legal voters etc.; that the registration thus made shall be conclusive evidence, in all matters affecting the validity of the vote, in all courts of this state, of the true numbers of legal voters, and no person not so registered shall vote, or be counted in determining the result; that the subscription shall not be made 'unless it appears from the returns made by said inspectors of election and registration books that two-thirds of the legal voters of such county, city or town have voted for the subscription. ' The evidence in the transcript shows that the whole number of voters 'so registered by said inspectors, and of votes cast at said election, was 168; that all of those were cast for, and none against, the said subscription. ' The evidence in the record shows nothing as to the number of persons residing in said town who were qualified, under the law or constitution, to vote at a general election, nor how many voters were, or had been previously, registered in the town. The counsel's argument against the constitutionality act of 1882 seems to be founded on an assumed condition of facts. We can see nothing in the evidence, upon which we think good or conclusive reasoning could be founded, forbidding the...