Smith v. Cnty. of Clark

• Decision Date: 31 October 1873
• Citation: 54 Mo. 58
• Parties: MARSHAL N. SMITH, et al., Defendants in Error, v. THE COUNTY OF CLARK, Plaintiff in Error.
• Court: Missouri Supreme Court

54 Mo. 58

MARSHAL N. SMITH, et al., Defendants in Error,

v.THE COUNTY OF CLARK, Plaintiff in Error.

Supreme Court of Missouri.

October Term, 1873.

Error to Lewis Circuit Court.

Edward Higbee, for Plaintiff in Error, contended, among other things, that the power vested in the County Courts to subscribe stock in the North Mo., and the Alexandria and Bloomfield Railroad, was not a franchise of the companies, and that the bonds issued in aid of such subscription were void, and cited Aspinwall vs. Davies County, 22 How., 364.

Jas. Hagerman, for Defendants in Error.

I. The Circuit Court had jurisdiction. There are seven counts in the petition. The aggregate amount sued for determines jurisdiction, and not the amount of each coupon. (Langham vs. Boggs, 1 Mo., 477; Barns vs. Holland, 3 Mo., 47; Martin vs. Chauvin, 7 Mo., 277; Judson vs. Macon County, Wes. Dist. Mo., April term, 1873, U. S. C. C.)

II. The coupons sued on are negotiable. They mention no payee, yet have the same legal effect as if expressly made payable to bearer. The bonds are payable to the company or bearer. The plaintiffs purchased the bonds and coupons at the same time. In Johnson vs. County of Stark, 24 Ill., the court holds a coupon, similar in every respect to those sued on, negotiable by delivery only. (McCoy vs. Washington county, Am. Law Reg., February, 1859; 21 How., 539; 2 Abbott, Nat. Dig., 44; Thompson vs. Lee county, 3 Wall., 332.)

III. The plaintiffs are innocent purchasers for value, before maturity, of the bonds and coupons in controversy. The only inquiry therefore, in this case is, “had the County Court of Clark county the power to issue them?” (Steines vs. Franklin county, 48 Mo., 167; State vs. Saline county, 48 Mo., 390.)

IV. The County Court of Clark county had the power to subscribe to the capital stock of the Alexandria and Bloomfield Railroad Company, and to issue bonds of the county, in payment of such subscription without first taking the sense of the voters. Section 14 of the charter of the North Missouri Railroad Company, adopted by the Alexandria and Bloomfield Railroad Company, authorized the County Court to subscribe to its capital stock without first taking a vote.

The general law of 1855, (1 R. C., p. 427, § 30,) and the amendments thereto in 1860, (Acts 1860, p. 88, § 1,) and in 1861, (Acts 1861, p. 60, § 1,) did not repeal these sections. Each of these statutes must be construed to operate prospectively, and not retrospectively, (State vs. Macon county, 41 Mo., 453; State vs. Sullivan county, 51 Mo., 522; State vs. Nodaway county, 47 Mo., 349; 48 Mo., 339.)

The irresistible conclusion, from the reasoning of the court in these cases, is, that the law of 1855, and the amendments of 1860 and 1861, did not repeal similar provisions in special charters.

V. “All the privileges, rights and immunities, of the North Missouri Railroad Company were undoubtedly conferred on the Alexandria and Bloomfield Railroad Company, as fully as if same had been re-enacted” in its charter. (Han. & St. Jo. R. R. Co. vs. Marion county, 36 Mo., 295; State vs. Sullivan county, ante; Binghampton Bridge Case, 3 Wall., 52.)

The record in this cause will warrant the statement, that the bonds in controversy were negotiated and purchased on the faith of that decision. Neither the people in their sovereign capacity, the Legislature, nor the judiciary, can alter this construction so as to effect rights acquired under it. (Gelpcke vs. City of Dubquue, 1 Wall., 175; 3 Wall., 303; State vs. Miller, 50 Mo., 129.)

The power to subscribe was given to the County Courts, but “the right” to receive the subscription attached to the company. Other corporations engaging in their enterprises were compelled to depend upon subscriptions of private individuals. They could have no other stockholders. This company was granted ““the privilege,” not enjoyed by others, of having these political subdivisions of the State, counties, become its stockholders. With section 14 the charter of the North Missouri Railroad Company was valuable from the day it was granted. Without that section it was valueless and would not have been accepted by its incorporators. The power of the counties to subscribe was a “right,” “a privilege,” and an “immunity.” It was a part and parcel of the franchise itself; and by section 10 of its charter the Alexandria and Bloomfield Railroad Company acquired it.

VI. If the County Court had the power to subscribe without an election, the recital on the face of the bonds, that they were issued pursuant to the general law of 1855, did not effect the power. The recital was unnecessary, and was wrong in fact, and should be treated as surplusage. (Crane vs. Lessee of Morris, 6 Pet., 598; Nodaway county case, ante).

VII. Under the law, as expounded by the Supreme Court of this State at the time these bonds were issued, they were valid in the hands of innocent purchasers, although the power of the County Court to issue them existed only under the general law then in force, which required an election. (Flagg vs. City of Palmyra, 33 Mo., 440; Han. & St. Jo. R. R. Co. vs. Marion county, 36 Mo., 294; Platte county case, 42. Mo., 171; Barret vs. Schuyler county, 44 Mo., 197; Steines vs. Franklin county, 48 Mo., 167.)

VIII. If the Legislature authorized the County Court to subscribe after an election, and the bonds were issued without an election, the innocent purchaser can recover. This is the settled doctrine of the Supreme Court of the United States. (Pendleton county vs. Amy, 13 Wall., 298; Commissioners Knox county vs. Aspinwall, 21 How., 539; Bissell vs. City of Jeffersonville, 24 How., 287; Moran vs. Commissioners of Miami county, 2 Black., 722; Meyer vs. Muscatine, 1 Wall., 384; Van Hortrup vs. Madison City, 1 Wall., 291; Supervisors vs. Schenck, 5 Wall., 772; Lexington vs. Butler, 14 Wall., 283; Grand Chute vs. Winegar, 15 Wall., 355.)

NAPTON, Judge, delivered the opinion of the court.

This suit was brought in August, 1867, on seven coupons, detached from bonds, dated January 1, 1865, due in twenty years, and payable to the Alexandria and Bloomfield Railroad Company or bearer. The bonds are in these words:

“$500. United States of America. No. 51. Alexandria and Bloomfield Railroad Company, county of Clark, State of Missouri; bond due in twenty years from date. Know all men by these presents, that there is due from the county of Clark to the Alexandria and Bloomfield Railroad Company, or bearer, five hundred dollars, lawful money of the United States, with interest at the rate of seven per cent. per annum, payable annually on the first day of each year, at the treasury of said county of Clark, on the presentation and surrender of the annexed coupons; the principal to be due and payable twenty years after the date hereof; for the performance of all which the faith of the said county of Clark is irrev. ocably pledged, as also the property, revenue and resources of the said county of Clark. This bond being issued and pursuant to orders of the county court of Clark county, as authorized by an act of the legislature of the State of Missouri, entitled “An act to authorize the formation of railroad associations and regulate the same,” approved December 13, 1855. In testimony whereof the said county of Clark has executed this bond by the presiding justice of the county court of Clark county, under the order of said court, signing his name hereto, and by the clerk of said court, under the order thereof, attesting the same and affixing the seal of said court. This done in the town of Waterloo, county of Clark aforesaid, this, the first day of January, 1865.

HARVEY SEYMOUR,

Presiding Justice of County Court of Clark County.

Attest: G. M. OCHILTREE,

Clerk of the County Court of Clark County.”

Coupons are as follows:

“State of Missouri. Bond No. 51. $35. The county of Clark will pay thirty-five dollars on this coupon on the first day of January, 1867, at the treasury of said county.

G. M. OCHILTREE,

Clerk of the Clark County Court.”

The petition states, that the coupons due in 1866 were paid, but that the coupons sued on, due in January, 1867, were not paid, although duly presented. There were separate counts on the seven coupons sued on. The answer denies that said bonds were issued in conformity to the law of December 13, 1855, asserts that no vote of the qualified voters of the county authorized the issue of the bonds for $50,000.

After a trial and a multiplicity of pleadings and a change of venue, the case was finally determined in the circuit court upon an agreed state of facts, which were substantially these:

1. That the A. & B. R. R. Co. was incorporated by the act of February 9, 1857, and subsequently, to-wit, on the 17th of September, 1864, duly and legally organized.

2. It is admitted that sections 8, 9, 10, 11, 14, and 19 of the act incorporating the N. M. R. R. Co. (approved March 13, 1851,) were on the 17th of September, 1864, specially adopted by said A. & B. R. R. Company.

3. That after the organization of said company, to-wit: On the ____ day of ____ 1864, the following entry was made on the books of said company: “We, the undersigned judges of Clark county, do subscribe $200,000 to the A. & B. R. R. Co., payable in county bonds, due in twenty years, at seven per cent. per annum, for said county of Clark, State of Missouri.

Harvey Seymour, B. P. Hannan, Jacob Tinsman: Number of shares, $20,000: amount, $200,000.”

That said H. Seymour and B. P. Hannan signed the same at Luray in said county, and Tinsman at his residence during the vacation of the county court.

4. That afterwards, to-wit: On the ____ day of ____, by an order of said county court, duly entered of record, the question, as to whether said county should subscribe 200,000 dollars to the capital stock of the A. & B. R. R. Co., was submitted to the resident qualified voters of said county, to be voted upon at the general election for State and county officers, held on the first Tuesday of ...