Village of Oquawka v. Graves

• Decision Date: 07 October 1897
• Docket Number: 336.
• Citation: 82 F. 568
• Parties: VILLAGE OF OQUAWKA v. GRAVES.
• Court: U.S. Court of Appeals — Seventh Circuit

82 F. 568

VILLAGE OF OQUAWKA v. GRAVES.

No. 336.

United States Court of Appeals, Seventh Circuit.

October 7, 1897

I. M Kirkpatrick and Raus Cooper, for plaintiff in error.

O. J Bailey and James W. Sedwick, for defendant in error.

Before WOODS, JENKINS, and SHOWALTER, Circuit Judges.

SHOWALTER Circuit Judge.

Plaintiff in error seeks the reversal of a judgment rendered against it and in favor of defendant in error on April 23, 1896, for $25,534.55, the aggregate of principal and interest thereon from July 1, 1891, of certain bonds made by the city of Oquawka. The declaration filed October 6, 1893, contained one special count on all the bonds and the common counts; but with the declaration was a notice in the words following:

'Notice The defendant is hereby notified that the sole causes of the action herein sued on, and of which evidence will be offered, are the twenty-three bonds mentioned in the special count, and that they are fac similes of each other except the amounts and bond numbers, the amounts and bond numbers being as in said special count specified.'

There was also filed with the declaration a copy of one of the bonds in words following: 'No. 1.

'United States of America.

'State of Illinois.

'City of Oquawka.

'Twenty-Year Six per Cent. Bond.

'Issued under an act of the general assembly of the state of Illinois, entitled 'An act relative to county and city debts, and to provide for payment thereof by taxation in such counties and cities,' approved February 13, 1865.

'The city of Oquawka, in the state of Illinois, twenty years after date, will pay the bearer hereof one thousand dollars ($1,000) and six per cent. per annum thereon, payable annually on the first day of July in each year at the agency of the treasurer of the state of Illinois, in the city of New York, on presentation and surrender of the annexed coupons as they severally become due.

'In pursuance of said act, the mayor of said city of Oquawka has hereto set his hand, and caused the seal of said city to be hereto affixed, and this bond to be countersigned by the clerk of said city of Oquawka, Illinois, this first day of July, A.D. 1871.

'City of Oquawka. S. S. Phelps, Mayor.

'(Seal.) E. H. N. Patterson.

'A.D. 18-- . City Clerk.'

On written stipulation, the cause was heard without a jury, and a finding was made in words following:

'(1) Prior to 1871 the defendant was organized as a town, under and by virtue of the laws of the state of Illinois, and contracted a bonded indebtedness of some $60,000.

'(2) That in the fall of 1870 the Merchants' National Bank of St. Louis, holding a portion of said bonds, brought suit against the town upon said bonds held by it.

'(3) In January, 1871, the president and board of trustees of said town were authorized to negotiate a settlement of the bonded indebtedness of the town held by the Merchants' National Bank of St. Louis, on the basis of fifty cents on the dollar. In pursuance of this authority, on or about the 30th of January, 1871, an agreement was entered into between said bank and the agent of the town, to the effect that the town would refund the indebtedness by issuing and delivering to the bank the bonds of said town, 'or of the corporation, if it is thought best that said town should become a city to give validity and value to said bonds,' at the rate of fifty cents on the dollar; such bonds to run for twenty years, with coupons attached for the annual interest at 6 per cent. per annum, the whole to bear date July 1, 1871.

'(4) That on the 30th day of January, 1871, at a meeting of the president and board of trustees of said town, said agreement was ratified and spread upon the records of the town, and at the same meeting an election was ordered to be held on the 21st day of February, 1871, to vote for or against city organization.

'(5) The general laws then in force of the state of Illinois authorized towns having a population of 1,500 inhabitants to incorporate as cities upon an affirmative vote of a majority of its inhabitants at an election to be held therefor.

'(6) That on the 21st day of February, 1871, at a meeting of the president and board of trustees of said town, the election returns were duly canvassed, and the election was declared to have been carried in favor of city organization, and that such city organization composed the same territorial limits as the town of Oquawka.

'(7) That no census or computation of the inhabitants of the town was had, made, or attempted after the taking of the census under the laws of the United States in 1870, and prior to the election to incorporate as a city, and that the census of the United States of 1870, completed September 10th of that year, showed the population to be 1,371.

'(8) After said election, ordinances were passed dividing the city into wards, providing for the election of aldermen, mayor, and other city officers; and on the 14th day of March, 1871, an election for mayor and aldermen was held, and said officers elected.

'(9) At a meeting of the city council held on May 17, 1871, the mayor and city clerk were instructed to issue to the holders of bonds of the town of Oquawka, at the rate of fifty cents on each dollar of such bonds, bonds of the city of Oquawka, to be dated July 1, 1871, due twenty years after date, bearing interest at the rate of six per cent. per annum, payable annually on the first day of July in each year, said bonds to show upon their face that they were issued under an act of the general assembly of the state of Illinois, entitled 'An act relating to county and city debts, and to provide for the payment thereof by taxation in counties and cities, approved February 13, 1865; said bonds and coupons to be signed by the mayor and city clerk, and the bonds to bear the seal of said city, and have printed upon the back thereof the act of the general assembly above referred to. The mayor was also instructed to take up the bonds of the town of Oquawka to the amount of $23,000, held by the Merchants' National Bank of St. Louis, and exchange in lieu thereof bonds of the city of Oquawka in conformity with an existing contract between the town of Oquawka and said bank.

'(10) This action was brought by the plaintiff upon twenty-three bonds of said city of Oquawka, as above stated, and purchased by the plaintiff for value before maturity, which said bonds were signed by the mayor and city clerk of said city of Oquawka, with the seal of the city attached, and had printed on their face that they were issued under an act of the general assembly of the state of Illinois, entitled 'An act relative to county and city debts, and to provide for the payment thereof by taxation in such counties and cities,' approved February 13, 1865, and that said act is also printed upon the backs of said bonds. Said bonds are dated July 1, 1871, payable twenty years thereafter, with interest at the rate of six per cent. per annum, payable annually on the first day of July in each year. Said bonds were duly registered in the auditor's office of the state of Illinois.

'(11) Said city of Oquawka duly performed all the functions of a city, passed ordinances for its government, collected taxes for the payment of interest on said bonds and for other purposes, and paid said interest as it became due, without any protest, until August, 1880, when said city was organized as a village under the general laws of the state of Illinois then in force. Said village comprised the same territorial limits as the said city. Said village continued to collect taxes, and paid the interest on said bonds, up to and until the maturity of said bonds, July 1, 1891, without any protest. At the maturity of the bonds, it refused to pay the principal.

'(12) Bonds of the plaintiff, numbered, respectively, 1, 2, 3, 4, 5, 6, 15, 16, 17, 18, 19, 20, 21, 22, and 24, were delivered by the city of Oquawka to the Merchants' National Bank of St. Louis, in settlement of indebtedness due it; and bonds numbered, respectively, 25, 26, 27, 28, 29, 30, 32, and 33, were delivered to various other parties by said city in settlement of indebtedness due them.'

On February 13, 1865, there was enacted by the Illinois legislature an act entitled 'An act relative to county and city debts, and to provide for the payment thereof by taxation in such counties and cities. ' The first section was as follows:

'Section 1. Be it enacted by the people of the state of Illinois, represented in the general assembly, that in all cases where counties or cities have heretofore, under any law of this state, issued bonds or securities for money on account of any

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