Town of Thompson, In the County of Sullivan v. Perrine

• Decision Date: 22 January 1883
• Citation: 106 U.S. 589,1 S.Ct. 564,27 L.Ed. 298
• Parties: TOWN OF THOMPSON, IN THE COUNTY OF SULLIVAN, v. PERRINE
• Court: U.S. Supreme Court

106 U.S. 589

1 S.Ct. 564

27 L.Ed. 298

TOWN OF THOMPSON, IN THE COUNTY OF SULLIVAN, v. PERRINE.

January 22, 1883.

T. F. Bush and F. N. Bangs, for plaintiff in error.

Wm. M. Evarts, for defendant in error.

HARLAN, J.

In Thompson v. Perrine, 103 U. S. 806, we affirmed a judgment of the circuit court of the United States for the southern district of New York, against the town of Thompson, in that state for the amount of certain coupons of bonds, executed in behalf of that town, by virtue of the provisions of an act passed May 4, 1868, and amended April 1, 1869. Those acts, as will be seen from the statement of the former case, authorized the town of Thompson, in aid of the construction of a railroad from Monticello, New York, to Port Jervis, in the same state,—a majority of its tax-payers, appearing upon the last assessment-roll, and representing a majority of the taxable property, not including lands of non-residents, having first consented to the debt being contracted,—to issue bonds, and to invest the proceeds, when disposed of, in the capital stock of the railroad company organized to construct the proposed road. Bonds were issued, and instead of selling them and investing the proceeds in the company's stock, the local authorities exchanged them directly with the railroad company for stock. This, according to certain decisions of the highest court of New York, was in violation of the act giving authority to issue the bonds. But, by an act passed April 28, 1871,—previous to which time the bonds had been issued and delivered,—that exchange for stock was, in express terms, ratified and confirmed. And the controlling question in the former case was as to the constitutional validity of the latter statute. In Horton v. Town of Thompson, 71 N. Y. 513, decided January, 1878, the court of appeals of New York held that as the tax-payers had only consented to an issue of bonds, the proceeds of the sale of which should be invested in stock, it was beyond the power of the legislature to validate bonds, which, in violation of the act under which they were issued, were not sold, but were directly exchanged for stock, of which fact all purchasers had notice from the recitals of the bonds themselves. That adjudication, it was contended, was binding upon this court. But to that proposition we declined to give our assent, and stated, with some fullness, the reasons why this court could not give to the decision in Horton's Case the effect claimed for it by the town.

We held, for reasons which need not be repeated, that it was within the constitutional power of the legislature of New York to pass the curative statute of April 28, 1871, and that from the moment it was enacted (if not before) the bonds, by whomsoever held, whether by the railroad company or others, became binding obligations upon the town, as much so as if they had originally been sold and the proceeds invested in stock of the railroad company, as required by the acts under which they were issued.

That decision controls the present case, for the latter, in its essential features, differs from the former only in the circumstance of the time when Perrine acquired title to the coupons in suit. Those heretofore sued on were purchased by him in 1875, while those now in suit were purchased by him in 1878, when they were overdue, and after the decision in 71 N. Y. was announced. Counsel for the town now insist that this court should follow the ruling in that case, at least as to holders of coupons or bonds who purchased after Horton v. Town of Thompson was decided; and they suppose that this court placed its former decision upon the ground mainly that Perrine purchased the bonds there in suit before the court of appeals declared the act to be unconstitutional. But in this view we do not concur. The reference, in the former case, to the date when Perrine purchased, was to illustrate the injustice which would be done were we, in opposition to our own view of the law, to follow the ruling of the state court made after he purchased,—a decision which, with entire respect for the state court, was held not to be in harmony with its former decisions. What we decided was that the curative statute was within the limits of legislative power, and that, at least from its passage, the bonds, by whomsoever held, whether by the railroad company or others, became enforceable obligations of the town. Mitchell v. Burlington, 4 Wall. 274, 275; Taylor v. Ypsilanti, 105 U. S. 60; Ohio L. & T. Co. v. Debolt, 16 How. 433.

There is, however, one point made in this case, not made in the former one, and which it is our duty to notice. It is that this action is excluded...