Provident Life Trust Co of Philadelphia v. Mercer County, Ky
Decision Date | 23 May 1898 |
Docket Number | No. 243,243 |
Citation | 18 S.Ct. 788,42 L.Ed. 1156,170 U.S. 593 |
Parties | PROVIDENT LIFE & TRUST CO. OF PHILADELPHIA v. MERCER COUNTY, KY |
Court | U.S. Supreme Court |
On May 15, 1886, the general assembly of the commonwealth of Kentucky passed an act entitled 'An act to authorize the county of Mercer to subscribe aid to the Louisville Southern Railroad Company,' the first section of which is as follows:
The second and third sections contain provisions in detail in respect to a vote of the people of the county, the subscription to the stock of the company, and the execution of the bonds. The fourth section reads:
In pursuance of this act an election was held in the county, resulting in favor of making the subscription and issuing the bonds. The subscription was made, and the bonds executed. The bonds were, omitting a provision for repayment, in the following form:
'United States of America.
'$1,000. No. 105.
'Louisville Southern Railroad Aid Bonds.
'County of Mercer, State of Kentucky.
'The county of Mercer, in the state of Kentucky, hereby acknowledges itself indebted and promises to pay to the Louisville Southern Railroad Company, or bearer, the sum of $1,000 on or before the tenth day of January, A. D. 1917, at the Louisville Banking Company in the city of Louisville, Kentucky, with interest thereon at the rate of five per cent. per annum, payable semiannually at said bank on the tenth days of July and January after date, respectively, in each year, on presentation and surrender of the annexed coupons representing such interest. This bond is one of a series of one hundred and twenty-five bonds of even date herewith, all of the same denomination and tenor, and numbered consecutively from one to one hundred and twenty-five, the same having been issued pursuant to the authority conferred upon the said county by an act of the legislature of Kentucky entitled 'An act to authorize the county of Mercer to subscribe aid to the Louisville Southern Railroad Company,' approved May 15, 1886, and pursuant to an order entered by the county judge of said county in conformity with said act subscribing in behalf of said county for the capital stock of the Louisville Southern Railroad Company in the sum of $125,000, which order was entered of record in said court on January 10, A. D. 1887.
* * *
'In witness whereof, the county of Mercer, by John W. Hughes, county judge thereof, has, in the name and on behalf of said county, subscribed and executed this bond, and the same has been attested by the county clerk of said county, with his official seal affixed hereto, and the interest coupons attached thereto have been signed by the said clerk.
'Done on the tenth day of January, A. D. 1887.
'The County of Mercer, [Seal.]
'
'Attest: Ben C. Allin, Clerk.'
On February 7, 1887, the county court appointed D. L. Moore trustee, as prescribed by section 4 of the act. Moore accepted the trust, and gave bond with good surety, as required, and on March 3, 1887,t he bonds were deposited with him.
Prior to June 1, 1888, the railroad was completed from Louisville, in Jefferson county, via Shelbyville, in Shelby county, and Lawrenceburg, in Anderson county, south through Mercer county to the depot of the Southwestern Railroad in Harrodsburg, the county seat. There it connected with a short line of road constructed by the South-western Railroad Company, and extending from Harrodsburg to Burgin, on the Cincinnati Southern Railroad. The Southern Company owned all the stock of the South-western Company, had possession of its road, and subsequently the two companies were consolidated, and the latter merged in the former company. On said 1st day of June, 1888, a train of cars, moved by an engine, passed over the road from Louisville through Harrodsburg to Burgin, and then returned to Louisville, and from that time the railroad from Louisville to Burgin has been continually operated as the Louisville Southern Railroad. The distance from the northern line of Mercer county to Harrodsburg is 15 miles; from Harrodsburg to Burgin, 4.72 miles. Burgin is 3 miles from the south line of Mercer county and 4.74 miles from the east line. The nearest point that the road runs to the south line of Mercer county is 2 miles.
On July 3, 1888, Moore resigned his position as trustee, and Isaac Pearson was appointed in his place. He gave security to the county, as required by the act, and received from the prior trustee all the bonds and coupons in his hands. About the 1st of June, 1888,—the time of the passage of a train of cars from Louisville to Burgin and back, as hereinbefore stated,—there arose a question whether the condition precedent to the delivery of the bonds had been complied with by the railroad company, and it was in view of this difference of opinion and the doubts of the trustee, Moore, that he resigned his position. This question was publicly and generally discussed; and while the discussion was going on, and before Pearson, the trustee, had determined that the condition precedent had been per- formed, and that he would deliver the bonds, the railroad company prepared to extend its road towards and to the town of Danville, in Boyle county, which was 7.47 miles distant from Harrodsburg, and, with one exception, acquired all the rights of way to the southern line of Mercer county. A movement was made in the county to have the court of claims of the county instruct the trustee as to his duty in the premises, and that court, consisting of the county judge and the justices of the peace of his county, met on June 26, 1888, and the question was fully discussed before them. After argument, they declined to instruct the trustee as to his action, but, upon motion of one of the justices, passed and spread upon the records this resolution:
'At a county court of claims for Mercer county, at the court house in Harrodsburg, on Tuesday, the 26th day of June, 1888.
'Present: John W. Hughes, J. P. M. C. C., and M. Cummins, C. B. Connor, James Yeast, Sr., A. S. Hendrew, John W. Reed, E. R. Norton, R. L. Mullins, E. I. Massie, N. Harris, G. J. Johnson, B. O. Jones, A. Johnson, J. C. McIntire, and John T. Pankey, justices of the peace of Mercer county.
'G. J. Johnson, as justice of the peace of this county, offered into court the following motion, which is ordered to be noted of record, and is as follows:
"The members of this court do not believe that they have any right to enter an order directing the trustee to deliver the bonds of this county to the Louisville Southern Railroad, but as individuals they are of the opinion that such delivery should be made, and the construction of the railroad not forced to the Boyle county line.'
'And, said motion being seconded, the ayes and nays were taken, and resulted as follows:
'Ayes, 12, as follows: M. Cummins, C. B. Connor, James Yeast, Sr., A. S. Hendrew, John W. Reed, E. R. Norton, R. L. Mullins, n. Harris, G. J. Johnson, B. O. Jones, J. C. McIntire, and John T. Pankey.
After this, Pearson, the trustee, decided that the conditions had been performed, and on the _____ day of August, 1888, in the presence of the county judge of the county, delivered the bonds, first cutting off and burning the past-due coupons. At the same time the Louisville Southern Railroad Company delivered to the county its certificate for an equal amount of its capital stock. The stock was accepted by the county, and voted by the county judge at a stockholders' meeting on at least two occasions,—one on December 18, 1888, and another on May 26, 1890,—and the stock certificate is still held by the county of Mercer, and has never been tendered to the railroad company, or any one representing it. At these two meetings Mercer county voted its shares in support of certain resolutions materially affecting the business affairs of the railroad company, and also accpeting a legislative amendment to its charter, as well as in the election of directors. The county regularly levied an annual tax to meet the semiannual interest on the bonds, and paid such interest for the years 1889, 1890, 1891, and January 1, 1892. Since then it has paid no interest. The Provident Life & Trust Company is a bona fide purchaser of $100,000 of the bonds, and on default in payment of the coupons it commenced this action on November 3, 1892, in the circuit court of the United States for the district of Kentucky. The pleadings having...
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