Stewart v. Henry County

• Decision Date: 11 February 1895
• Citation: Stewart v. Henry County, 66 F. 127 (W.D. Mo. 1895)
• Parties: STEWART v. HENRY COUNTY.
• Court: U.S. District Court — Western District of Missouri

66 F. 127

STEWART v. HENRY COUNTY.

United States Circuit Court, W.D. Missouri, Western Division.

February 11, 1895

Karnes Holmes & Krauthoff, for plaintiff.

Fyke Yates & Fyke and Jos. Parks & Sons, for defendant.

PHILIPSDistrict Judge.

The statute under which the bonds in question were issued does not provide in terms for the redemption at the end of five years, nor prescribe any method therefor; though it does prescribe that no bond under the act shall be issued to run for a longer period than twenty years, nor less than five years.It was, however, competent for the county, in issuing the bonds, to reserve the right to make them payable at the end of five years after their issue, at its option.This it did, and this fact is expressed on the face of the bond, and the purchaser took subject thereto.After such recitation as to the statute under which, and the purpose for which, the bond was issued, it concludes with this provision: 'But this bond is payable at any time after the 1st day of July 1887, at the option of said county. ' The preceding part of the bond recites that the county 'promises to pay bearer, at the National Bank of Commerce in the city of New York and state of New York, on the 1st day of July, 1902 with interest at the rate of six per centum per annum, payable at said bank, upon presentation and delivery of the coupons for said interest hereto attached on the 1st day of July of each year. ' The follows immediately the provision above quoted, respecting the option to pay at any time after July 1, 1887.Clearly enough, then, it appears that the place of payment under either provision is the National Bank of Commerce in the city of New York.This admits not of debate.Unquestionably, upon the maturity of any coupons or the bonds under the first part of the obligation, should the county have on deposit at said bank the money to pay the same, it would have been the duty of the holder of the bond to present it there for payment, and interest would cease thereon from that date, unless the defendant had failed to make its tender good on demand.Ward v. Smith, 7 Wall. 447-453.

The remaining question is, did the county perform its obligation to the holder of any such bond by declaring its option to pay on the 1st day of September, 1887, and publishing notice thereof in the manner in which it did, and having the money in readiness at said bank to meet the payment of any bond and interest that might be presented for payment at said place? or does the contract contemplate that in addition the county should have given personal notice of its election to the holder of said bonds and coupons?It is true, as suggested by plaintiff, the county could have provided in the bond for notice, and how it should be given.On the other hand, it seems to me, the defendant might with equal, if not greater, force reply that the plaintiff took the bond with full knowledge of the fact that the right was reserved to the defendant county, at any time after July 1, 1887, to elect to pay; and, inasmuch as he took the bond when issued without exacting any specification respecting notice, it does not come with grace for him afterwards to demand, without any notice to the county, that he would expect it to notify him, or, without keeping it advised that he was the holder of any such bonds, to claim that he should have his interest until such time as he had actual notice of the election made by the county.In construing a contract regard must be had always to the circumstances under which it was made, to the subject-matter, as well as the reasonable and customary method of its performance.The plaintiff knew when he took the bonds that they were subject to the provision respecting the option.He knew that such bonds possessed all the qualities of commercial paper on their face payable to bearer, and as such passed freely from hand to hand by mere delivery, and entered into all the channels of trade and commerce, like inland bills of exchange.How, then, was it possible for the defendant to know, when it made its election to pay, who held this or that particular bond and the coupons?Personal notice in such case would be practically impossible.The county might possibly have ascertained from the bank, where the payment of coupons was usually made, who presented the same at the last payment.But that would furnish no evidence as to who held the bond, as the coupons might be severed therefrom, or who held the remaining coupons.He who held the bond at the time of the payment of interest might not hold it tomorrow.So that, if notice were served on the holder of the coupon last paid, he could answer that he had parted with the bond and any other coupon held by him; and it would be practically impossible for the county to get at the real facts or the real holder.Under such construction of the contract, the county would absolutely be at the mercy of the commercial winds.Such a construction would be so unreasonable and impractical that the court should hesitate to adopt it, if there is any other more reasonable, natural, and equitable construction to both parties.County courts, under the statestatute, are courts of record.

As such, all their acts and doings are made matters of record.The election made by the county to exercise the option given in this case was made matter of record in the county court.Plaintiff was advised by the bond in his hand that he held subject to such election, liable to be made at any time after the 1st day of July, 1887.It was more feasible and reasonable for him to have kept himself in communication with the clerk of the court, than to exact that the court should seek him out.Again, the place of payment being designated on the face of the bond, the law is that, if the obligor places the funds necessary for payment with a designated bank at the time for payment, it is the duty of the payee to call at the bank and make demand there.Ward v. Smith, 7 Wall. 450, 451.The plaintiff had two plain courses open to him to ascertain whether or not the county exercised the option, and to guard himself against the possiblity of loss of interest by either making direct inquiry of the clerk of the county court or any local correspondent, or by leaving his bonds and coupons at the bank in New York.One or the other was so easy and expenseless to him, while to require that the county should seek out an unknown holder of such commercial paper, not yet due, transferable from hand to hand by mere delivery, and give personal notice of its election to pay, is so extreme and impracticable as to repel the construction insisted upon by the plaintiff.As the evidence in this case shows, at, or shortly after, the...